Digital products to triple China business by 2020: Mattel

Mattel Inc expects to grow three to four times in the more than $ 31 billion toys and games market in China by 2020 through digitally connected toys, as it intensifies its efforts to take on LEGO Group and Hasbro Inc in the country, Reuters reported Thursday.

Mattel – which cut its dividend by more than half to fund the new efforts – said that its emphasis on e- commerce and repackaging its core brands as educational toys and connecting them to the Internet would propel its position in the fragmented market.

The toymaker has about a 2 percent market share in China, lagging behind construction toymaker LEGO which has 2.8 percent.

Hasbro has about 1 percent, according to Euromonitor International.

Mattel has been revamping its toys, developing AI Barbie Holograms, smart sensors- enabled Hot Wheels cars and virtual reality- powered ViewMasters to make them relevant to millennial parents.

The new, digitally connected toys will be launched globally in fall 2018, the company said on Wednesday.

“In China, there is a lot of recognition of linear learning and development. There is a real need for development of ... primary motor skills and social- emotional skills,” Mattel’s Chief Executive Margo Georgiadis said.

Georgiadis, a former Google executive, took over the reins of the toy com- pany in February and was hired for her technology expertise and e- commerce know- how.

Mattel also said that it would launch a network of play clubs with retail spaces to sell its toys in a joint venture with investment company Fosun Group.

The joint venture is the third major partnership after those involving Alibaba and Baby Tree, aimed at promoting the company’s educational products.

One such product is Mattel’s Hotwheels Speedometry, play- based lessons that teach children about subjects such as measurement, distance, potential and kinetic energy, through building miniature race tracks.