3 / 76
2
Source: NPD Group, Retail Tracking Service
3
Source: NPD Group, Retail Tracking Service. Ranking based on total retail sales in
the combined toy categories of infant electronic learning, other infant toys and
preschool electronic learning for the 12 months ending December 2014
4
Source: MZA Ltd, 2015
5
Source: Manufacturing Market Insider, March 2015
The Group’s proven strategy focuses
on four main areas: product innovation,
market share gains, geographic
expansion and operational excellence.
In contrast to children’s educational tablets, standalone
products recorded growth in sales, with the Go! Go! Smart
family of infant vehicles and playsets performing particularly
well. In the calendar year 2014, VTech strengthened its
position as the number one infant toy manufacturer in
France, the UK and Germany, while becoming the largest
infant toy manufacturer in Spain
2
. In the US, VTech became
the number one manufacturer in Infant and Preschool
Electronic Learning toys
3
. In the financial year 2015, standalone
products accounted for approximately 77% of total ELPs
revenue, while platform products accounted for about 23%,
as compared to approximately 68% and 32% respectively in the
financial year 2014. This decline in the share of revenue from
platform products was mainly due to lower sales of children’s
educational tablets.
TEL products revenue returned to a growth path in the financial
year 2015. All regions recorded increased sales, which were
driven by market share gains in residential phones and higher
sales of commercial phones and other telecommunication
products. In residential phones, VTech strengthened its position
as the number one cordless phone manufacturer globally,
gaining market share in North America, Asia Pacific and Other
Regions, while market share in Europe held steady
4
.
In commercial phones and other telecommunication products,
baby monitors saw a particularly strong performance. This
came as the Group expanded its distribution channels to
increase market presence, while major retailers in the US
moved to replace the older analogue models on the market
with VTech digital baby monitors. Within this category, video
baby monitors sold especially well. In commercial phones,
shipment of ErisStation™, the Group’s first conference phone
with wireless microphones, and ErisTerminal™, its SIP (Session
Initiation Protocol) phone systems, generated incremental
sales. In the financial year 2015, commercial phones and other
telecommunication products grew to approximately 19% of
total TEL products revenue, compared to around 14% in the
previous financial year.
CMS marked its 13th consecutive year of growth in the
financial year 2015, once again outperforming the global EMS
market
5
. Growth in wireless products was robust, while there
were good sales increases in switching mode power supplies,
home appliances and solid-state lighting. A strong reputation,
expertise in certain product categories and excellent customer
service have enabled VTech consistently to grow with existing
customers while adding new ones. This in turn has allowed
the Group to expand into new product categories such as
wearable and smart hearable devices. In the financial year 2015,
professional audio equipment, wireless products, switching
mode power supplies and solid-state lighting remained the top
four product categories for CMS.
Our Strategy
The Group’s proven strategy focuses on four main areas:
product innovation, market share gains, geographic expansion
and operational excellence.
Product Innovation
Product innovation is the key to VTech staying ahead of the
competition in fast-changing markets.
With regard to ELPs, the Group has a strong pipeline of
products. In standalone products, the successful Go! Go! Smart
family is being expanded through the introduction of different
themes, more vehicles and more playsets. In the US, Go! Go!
Smart Friends®, which was launched exclusively with Toys“R”Us
last year, will be introduced nationwide in the calendar year
2015. VTech will also enter new aisles by launching new
categories of product. The global launch of Flipsies™, a range
of transformable dolls and playsets, will enable the Group to
penetrate into the girl aisle. VTech is also successfully breaking
into the dolls aisle with a range of interactive dolls, branded
Little Love® in Europe and Baby Amaze™ in the US, which was
first launched in the European markets in June 2014. Kidizoom
Action Cam, the latest addition to VTech’s range of cameras
for children, will also be launched globally in the calendar
year 2015. For core learning products, VTech will continue to
broaden and refresh its product portfolio, adding over 100 new
models worldwide.
3
VTech Holdings Limited
Annual Report 2015