Smart Toys Market

Rising expanding power among individuals

The increase in disposable incomes among individuals ly especially in consumers in developing economies such as India, Canada, Mexico, Middle East countries, and others are driving the adoption of advanced technologies such as smart home devices and technologies like IoT, AI, etc. For instance, according to the Internet Society, the peak traffic increased to 47% from 28% forecasted earlier owing to the increased demand from a large workforce operating from their homes, online learning for children, rise in demand for entertainment & media, among others.

Rapid innovations in technology

Technological advancement is a continuous process giving birth to newer emerging technologies that enable us to carry out our day-to-day activities with ease. In terms of the smart toys industry, it is reporting several innovations providing children develop and explore their creative minds. For instance, Innokind, Inc. (US) was the winner in the inaugural smart toy awards organized by World Economic Forum for Intelino Smart Train that promotes creative play as well as enables children to develop coding skills through programmable tiles and/or an application.

Additionally, The LEGO Group (Denmark) was another winner, awarded for an augmented reality (AR) tool that helps kids make their music in addition to the music videos through LEGO characters and ‘BeatBits’ with different sound effects. Further, the adoption of technology in the education industry is rapidly surging with time are expected to keep up the demand for smart toys in near future.

There is a notable increase in parental awareness regarding the benefits of educational play, which is driving the Global Smart Toys Market Industry. Parents are increasingly seeking toys that not only entertain but also promote cognitive development and learning. This shift in consumer behavior is reflected in the rising sales of smart toys that offer interactive features and educational content. As a result, the market is projected to reach 75 USD Billion by 2035, indicating a robust growth trajectory. This trend suggests that parents are willing to invest in products that contribute positively to their children's development, thereby fueling market expansion.

The Global Smart Toys Market Industry is experiencing a surge in demand due to rapid technological advancements. Innovations in artificial intelligence, augmented reality, and the Internet of Things are transforming traditional toys into interactive learning tools. For instance, smart dolls that can engage in conversation and respond to children's emotions are becoming increasingly popular. This trend is expected to contribute to the market's growth, with projections indicating a market size of 30 USD Billion in 2024. As technology continues to evolve, the potential for smart toys to enhance educational experiences and foster creativity among children appears promising.

The integration of STEM (Science, Technology, Engineering, and Mathematics) education into the Global Smart Toys Market Industry is a significant driver of growth. Smart toys that incorporate STEM principles are designed to engage children in hands-on learning experiences, fostering critical thinking and problem-solving skills. For example, coding robots and construction kits that promote engineering concepts are gaining traction among consumers. This focus on educational value is likely to attract a broader audience, contributing to a compound annual growth rate of 8.69% from 2025 to 2035. As educational institutions emphasize STEM learning, the demand for related smart toys is expected to rise.

Safety and regulatory standards play a crucial role in shaping the Global Smart Toys Market Industry. As the demand for smart toys increases, manufacturers are compelled to adhere to stringent safety regulations to ensure product quality and child safety. This focus on compliance not only builds consumer trust but also enhances the overall reputation of the industry. Regulatory bodies are actively working to establish guidelines that govern the use of technology in toys, which may impact product development and marketing strategies. Consequently, companies that prioritize safety and transparency are likely to gain a competitive edge in this evolving market.

The rise of digital connectivity is reshaping the Global Smart Toys Market Industry, as more households gain access to the internet and smart devices. This connectivity allows smart toys to offer enhanced interactive experiences, such as remote play and online learning modules. For instance, toys that connect to mobile apps can provide personalized learning experiences tailored to individual children's needs. The growing prevalence of smart homes and connected devices is likely to further drive the adoption of smart toys, as families seek products that integrate seamlessly into their digital lifestyles. This trend may significantly influence market dynamics in the coming years.

By region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. North America is expected to register the largest market share owing to the surging demand for smart toys in the region. The US is expected to lead the country-level market in the North American region owing to the benefits offered by smart toys in STEM (Science, Technology, Engineering, and Math) and the emerging need for programming and embedding technologies including AI.

Further, the major countries studied in the market report are The U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil

Figure 3: SMART TOYS MARKET SHARE BY REGION 2021 (%)

Source: Secondary Research, Primary Research, Market Research Future Database, and Analyst Review

Moreover, the Europe region is expected to stay in the second position following North America during the review period due to the higher adoption of smart toys. On the other hand, the smart toys manufacturers operating in the region are now required to comply with the newly proposed regulation on artificial intelligence on April 21st under the name- AI Act aka the AIA which sets a scene for a radical overhaul of the regulation of the digital world to put on children’s rights and design a digital world people can trust.

Asia-Pacific is anticipated to be the fastest-growing market in the smart toys market during the forecast period mainly due to the rapid digital transformation, increasing internet penetration, rising adoption of 5G & 4G LTE services, and others. Additionally, the region is also one of the largest consumers of telecommunication and consumer devices that include smartphones, tablets, laptops, and others which enhance the expectations for the emerging smart toys industry. Also, the deployment of 5G services, increasing awareness and demand for STEM-oriented learning & entertainment systems is expected to boost the demand for smart toys soon.

Major market players are spending a lot of money on R&D to increase their product lines, which will help the market grow even more. Market participants are also taking various strategic initiatives to grow their worldwide footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the Smart Toys industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.

Manufacturing locally to cut operating costs is one of the main business tactics manufacturers use in the Smart Toys industry to benefit customers and expand the market sector. Major market players, including Mattel, The LEGO Group, Smartivity Labs, Smart Kids Toys, and others, are attempting to increase market demand by funding R&D initiatives.

Mattel is a toy and consumer product design and manufacturing firm that focuses on children's entertainment. Fisher-Price, Barbie, Monster High, Ever After High, Polly Pocket, Enchantimals, Hot Wheels, Matchbox, Masters of the Universe, American Girl, and Thomas & Friends are among the items and brands it manufactures. In addition, the firm offers film and television material, gaming, music, and live events.

LEGO is a firm that creates, manufactures, promotes, and sells toys. It is dedicated to the growth of children's creativity via play and learning. It sells toys in the areas of automobiles, airplanes, trains, trucks, boats, construction, building, home, space, and robots.