Last Updated on May 10, 2021 by Danielle
Spin Master announced expansion plans and what’s next for Hatchimals.
Spin Master, the maker of the hit toy Hatchimals, announced ambitious plans to expand into the $11.5 billion Chinese toy market. Spin Master is also best known for Paw Patrol, Air Hogs, and its Meccano toy lines but none can match the blockbuster success of the Hatchimals.
Surprisingly, Spin Master outperformed analysts’ sales and earnings per share forecasts for its second quarter performance. As a result, Spin Master has increased its 2017 revenue forecast accordingly.
Hatchimals helped to grow Spin Master’s second quarter sales by more than 300 percent. The mini Hatchimals CollEGGtibles have been a tremendous hit toy for Spin Master. It’s a new collectible line that hatches from an egg just like the bigger Hatchimals. These Hatchimals CollEGGtibles have been selling out worldwide.
Ben Gadbois, COO of Spin Master, stated that CollEGGtibles have been selling out faster than expected. Certainly, since they don’t have the product in stock they are missing out on revenue opportunities and dissatisfying fans of the new collectibles. Clearly, they have a hit on their hands. In response to demand, Spin Master has boosted capacity and the company is collaborating with retailers to meet their needs and satisfy customers.
As Spin Master expands into China’s toy market, having ample inventory of Hatchimals CollEGGtibles will be important to their success. Spin Master entered the Chinese toy market as of the second quarter, and it has established a partnership with Alibaba Group to distribute its toys in China.
The challenge for Spin Master is that even though China’s toy market is huge, most of it is served by local toy companies with very competitive low prices. However, Spin Master recognizes that it’s still an important market to pursue as they expect it to grow and they expect consumers to demand new brands, making it an important medium to long-term strategic investment.
Spin Master will hatch its latest Hatchimals, called Hatchimals Glitter, in October and it will additionally seek to grow its business through strategic acquisitions. Spin Master previously had acquired Swimways and recently it acquired Aerobie. It has added at least seven companies into its portfolio since its public IPO.
Will the next generation of Hatchimals be another hit toy for Spin Master? If it wants to win Christmas it has to tackle stiff competition from Lego Boost, Teddy Ruxpin, Tickle Me Elmo, Circuit Cubes, fidget spinners, Hatchimals CollEGGtibles, Luvabella, and BeatMoovz. All of these toys have made our annual top Christmas toys 2021 list. It will be interesting to see whether it becomes the must-have toy for Christmas.