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Germany's toy industry looks to latest trends

Nuremberg - It's all about the latest trends, well-established classics and the biggest earners at the largest toy fair in the world, but the sheer volume of choice is overwhelming: among the 1 million products, toyshop owners have to find the right ones for their customers.

Some owners will be searching among the dolls and pedal cars for the next big earner for their toy store.

Others have to fill their order books with robots, puzzles and cuddly toys.

The international toy industry is about to gather for its biggest event of the year, the world's largest toy fair, which opens on Wednesday in the southern German city of Nuremberg. Competition in the industry is fierce and only those with the right instincts are able to succeed.

German traders can't complain, as they have seen revenues rise since 2008, despite the international economic crisis and the falling birth rate. The only year to show a slight decrease was 2013.

Final results for 2014 are not yet available, but thanks to an unexpectedly good Christmas sales period, analysts expect the industry to achieve growth of 4% this year, with sales of €2.7bn. Market researchers Euromonitor have even predicted a figure of €3bn based on their own data.

Professional bodies say the estimates are overly ambitious, but accept that there is growth.

"The sector is growing," said Willy Fischel of the Federation of German Toy Retailers. "We had a special development with a very good sales spurt at the end of Christmas, but we had brands and trends that drove the market."

But the picture was not rosy everywhere, Fischel said.

"There is a broad spectrum of business activity hidden behind the growth figures," he said, adding that, while shop owners had had sales results ranging from losses to growth of 3%, online retailers had seen revenues rise between 5% and 20%.

"But sales are not profit, not by a long shot," Fischel said. "That affects online traders above all. We don't know anyone who is earning money online," he said.

Euromonitor reports that 28% of toy sales in Germany are now online.

"Online trade is growing disproportionately, but not as quickly as it was a couple of years ago," Fischel said. Meanwhile shop owners are increasingly using the internet to increase sales and to inform customers of new products and offers.

The business is fast-moving, with only a half of products surviving on the market for more than two years and about a half of the business depending on catchy new products.

"It's best if they (the shop owners) know today what they are going to be selling tomorrow," Fischel said, reflecting the great dilemma of the toy business. An average toy seller has some 25 000 products on offer. At the Nuremberg fair there are 1 million products on offer.

There has been no identifiable big trend for 2015 yet, according to Ulrich Brobeil of the German Toy Industry Federation.

One to watch is the creative sector, with growing demand for loom bands, rubberbands that can be woven together. They are not expensive, but they will be sold in mass quantities, Brobeil said. Classics such as dolls and cuddly toys are also seeing an increase in sales, he added.

At the same time, more and more technology is taking up residence in children's bedrooms. The fair organizers have identified "beyond reality" as a trend, with computer gaming shifting more towards virtual reality and three-dimensional imaging.

"Suddenly two-dimensional images on the screen come alive and turn into three-dimensional objects, while clothes and accessories can fulfil digital functions using technical components," experts said.

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