Toys City (Gorod Igrushek): Reliable Partner for All Toys Market Players in Russia
How and when a business becomes successful? What becomes a springboard launching a company to the leading positions? Every team has its own secret. However, there’s one common thing: entrepreneurs need to be able to give a flexible response to the market requirements and to restructure their business models. These were the topics we talked about with Alexander Yelkin, Purchasing and Marketing Department Head of Toys City (Gorod Igrushek), a loyal and regular exhibitor of Mir Detstva.
Our company has been driving its own retail projects and active distribution since 1991. We have a large experience. To understand what helped us to survive and grow, we have to remember how it all started. It all started when Yakov Shpigelman, a head of one of the computing departments of the Ministry of Forestry and Wood Processing Industry of the USSR, at that time already a partner of IBM in Russia, brought from his business trip to the USA several Barbie dolls for his daughter and found out that this market niche was completely empty in the Russian market. And he suddenly discovered what a great big world was behind that simple doll. It was the time his company was named Barbie World.
Soon a Barbie brand shop appeared in the Central Detskiy Mir at Lubyanka Street, and toy departments were opened in the largest stores. Those first shops couldn’t imagine their work without supplies from Barbie World Company. The company became a dealer of Eliksir, the first distributor of Mattel in Russia. After that it became a direct importer specializing in the import of the original collectors’ dolls.
When Eliksir Company left the market after the 1998 financial meltdown, it was Barbie World that prevented Mattel’s sales in Russia from a crash by buying out the stocks of the warehouses of Eliksir. Barbie World was restoring the market for a long time following the crush of the ruble exchange rate. After that the company got a status of one of Mattel’s distributors in Russia.
After that the first branded shops of Barbie World were opened, one of which (in Zvezdochka Commercial Center) still works at the same place and pleases new generations of toy buyers.
In the 2000s the company was actively growing. More than 50 brands were included into the distribution portfolio of Barbie World. Many of them were the world’s famous ones such as Melissa and Doug, Tonner, Adora, Goldberger, Bullyland, Schmidt, Yat Ming, Anna Geddes, Unimax, Force of Valor, Edushape , and others. The company launched Gosha the Teddy bear to the CIS market, an educating toy, probably the first successful interactive Russian-speaking toy. For the collectors we created (under a license from GAZ) a series of Soviet old-timers 1/24. The company signed a license contract with Disney and presented in Russia (exclusively) the dolls from Maleficenta and Alice in the Wonderland cartoons. The company signed direct contracts with the Russian representative offices of Mattel, Hasbro, and Tommy. The accent has always been made on the original (unusual, collectors’) toys and not on the mass market!
At the same time we were rebranding of our retail chain. The Barbie World, Hasbro Corner, Lego shop-in-shop, Disney displays and practically all the top toys found their places in our shops which was named Gorod Igrushek (Toys City). The renewed shops increased their floor space and got a new design and new customers. The company’s wholesale department was turned into a separate wholesale company named Best Toys. This company is working in the market at present too. The company has business partners not only in the countries of the Customs Union but also in the Baltic states and Eastern Europe.
Unfortunately, the fall of the ruble exchange rate in 2014 was a strong hit to the whole Russian business, especially to the toys market, which is the most difficult markets. Resulting from that, a number of companies left the market. Many random players appeared, and the share of counterfeit goods increased. Unfortunately, an unfair competition grows when a number of market players try to increase their turnover explicitly dumping the goods. Also, a number of careless companies in pursuit of expanding their retail chain of fulfilling the overstated purchasing budgets of the manufacturers are forgetting such words as financial discipline, timely payments, recommended retail price, and fair competition. All this leads to a nervous market situation. As our national and foreign experience demonstrates, the crash of companies of the level of Banana-Mama and Deti (Russia) or Toys ”R” Us (USA) really rocks the boat.
Under these circumstances, Gorod Igrushek (Toys City) had to introduce strict limits to the purchasing procedures which helped to stop the sales decrease at the first and start a new growth after that. I can’t open all our secrets. However our mathematical model counts many factors such as the margin, turnover, marketing activity of the brand, people’s mentality, shopper traffic, etc. Thus, our ability to make a precise sales and stocks forecast, financial discipline management and strict following of the recommended retail margin now makes Gorod Igrushek (Toys City) a reliable and appealing partner for both distributors and manufacturers of toys.
There is no doubt that our original products of our own exclusive distribution which are not available from other sources are a real catch. Our company has no regrets when it stops doing business with people whose mentality is still in the past. Vice versa, we are prepared to open new shops with reasonable property management companies of shopping and entertainment centers.
The introduction of modern mathematical methods of data processing allowed Gorod Igrushek (Toys City) to keep its place in the market. It makes the company an appealing partner for all players of the toy market.