The children's product sector in Catalonia has a turnover of over €4.4 billion

The children's product sector in Catalonia is made up of 488 companies that generate an annual turnover of €4.424 billion, equivalent to 1.7% of the GDP. This is the main takeaway from the update of the Children's Product Sector in Catalonia study (.PDF document), which has been elaborated by ACCIÓ-Catalonia Trade & Investment -the agency for business competitiveness belonging to the Ministry of Business and Labour - with the collaboration of the Kid's Cluster.

This sector comprises all the companies that offer products and services aimed specifically at the children and families segment, including children and adolescents, which can be purchased by their families or via other entities outside the home, such as schools or playgrounds. According to the report, 21,638 people work in this area, more than 91% of companies are SMEs, and three out of four are more than ten years old.

The study shows that of all the companies analyzed, half (50%) work in the leisure, entertainment, and culture segment, i.e., those that manufacture games, retailers and distributors specializing in leisure products, tourism and leisure spaces and experiences, publishing, audiovisuals, digital content and video games, museums, theaters and other cultural spaces. These generate 28% of the sector's total turnover and also account for 29% of the workforce. 

According to ACCIÓ-Catalonia Trade & Investment's calculations, companies offering food products for the under-age final consumer stand out, accounting for 4% of the total number of companies and 23% of the employees, with a turnover of 36% of the total business volume. In the education segment, educational learning and reading services, school materials, tech education, and publishing companies account for 22% of the companies, 24% of the total number of employees, and 12% of the aggregate turnover.

On the other hand, 6% of the companies are dedicated to the health, hygiene, and cosmetics segment, concentrating 11% of the employees and 14% of the business volume. Another 10% of the companies work in the field of fashion and habitat.

Market trends: adapting to new family dynamics

The report analyzes the main developments and innovations in the sector. It highlights the growing adaptation to the constant reduction in the demographic significance of the child population, where the proportion of people under 15 years of age globally has fallen from 25% to 16% in Europe. This is one of the reasons why child product companies are adapting their business models towards adolescents.

At the same time, the sector is also evolving to focus on products for parents who want to offer better quality free time and education outside school to their children. In fact, according to the study, 23% of parents buy books with guidance on how to educate and raise children, and 31% use mobile applications to monitor their children. In this sense, the study's data show that more than 60% of parents are willing to lose out financially in exchange for spending more quality time at home. For this reason, the tendency to create board games or experiences based on family togetherness and cooperation is gaining ground in the sector.

At the same time, the report reflects the significance of the adult user in the purchase of games. According to data collected by ACCIÓ-Catalonia Trade & Investment, 25% of total sales in this segment are aimed at over 18-year-olds. These are usually products such as card or board games or games that have been on the market for years and are inspired by television series.

Challenges and business opportunities for companies in Catalonia

In the short, medium, and long term, five main opportunities for companies in Catalonia in the children's product sector have been identified. One of them is that of attracting young talent to develop and create new product models that adapt and even move ahead of market trends.

In the section on products and services, the report points to the need to focus on sustainable businesses, decarbonizing and promoting circular economy elements (second-hand purchases, eco-sustainable products...). According to the study, new products must be focused on two innovative fields: the first, the search for new family experiences and opening the door for consumers to create entertainment methods; the second, offering better connectivity, security, and privacy.

In this sense, the fourth challenge is to adopt digitalization, big data, and Artificial Intelligence in the sector. All of this will serve to develop and open up new market segments in terms of clients and also geographically.