Mattel expects china business to grow three folds through digital toys

American multinational toy manufacturing company, 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.

The company said 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.

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

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

Margo Georgiadis, CEO, Mattel, said, "In China, there is a lot of recognition on linear learning and development. There is a real need for development of EQ, primary motor skills and social-emotional skills."

Mattel also said it would launch a network of play clubs with retail spaces to sell its toys in a joint venture with investment company Fosun Group adding to a slew of major tie-ups in China.

Georgiadis told Reuters, "As we think about the opportunity in China ... it is driven by the basic fact that there are 210 million kids in China, while there are 55 million in the US."

He added, "Just the sheer size of the market ... it's an enormous market opportunity."