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MX23_IN_FAMOSA_Ignacio

MEXICO - Industry

Ignacio Romero

Managing Director, Famosa

Bio

With a 35-year successful professional career in the consumer, financial services, and entertainment industries, Ignacio Romero has been leading the business of Famosa-GP in the Americas for the last seven years. Prior to Famosa, he worked for almost 20 years in the entertainment industry at some of the most important and powerful Hollywood firms in Mexico, such as Fox, Paramount, and Warner Bros. Romero holds a bachelor’s degree in business administration and a marketing diploma from ITAM, an MBA from La Salle, and a master’s degree in digital business from Universitat Barcelona.

"With the pandemic, consumer behavior and consumer trends changed dramatically as people began to buy online."
Famosa in Mexico is among the top five toy companies in the highly competitive industry and is now targeting expansion across Latam and the US.
What are the main trends in consumer behavior within the Mexican toy industry?

With the pandemic, consumer behavior and consumer trends changed dramatically as people began to buy online. Yet this did not compensate for sales lost in physical retail. We lagged behind economies as Brazil, the US, and Europe where online sales were much higher. Yet there have been clear changes in how consumers are buying and learning about products, whether it for toys or anything else. It is important for retailers to be omnichannel and to have what was previously seen online physically in store. Our trend in FAMOSA Mexico, specifically, a key market for the toy industry, has been important and impactful. We have grown from 10th position in 2015 to fifth in Mexico, just behind big global toy companies like Mattel, Hasbro, Lego, and Spin. Over the past eight years, we have grown to a solid position. We are the biggest company out of the smallest distributors and manufacturers. Getting to this point has not been simple. The core factor is that we are developing brands rather than merely selling products. We set a three- to five-year plan to position our brands firmly within the market. We made considerable marketing investment and worked heavily on pricing and points of sales. Those are our key commercial strategies that have led us to a solid position of growth. Today, we have the number-one brand leader in the nurturing category, Nenuco. Nenuco is now a generic name like Kleenex. With the same strategy, we are working to continue growing across our different categories. We also have a deep analysis of the product that we will distribute from third parties every year and prefer to have brands that involve a three- to five-year plan, which takes a great deal of patience.

How did Famosa become one of the first companies in Mexico to develop digital marketing strategies?

We were one of the first companies to develop digital marketing strategies in Mexico. In 2015, we developed different highly-structured strategies. We are also working to develop our e-commerce, which is a longer process. We are not experts in managing stores, but rather in developing and selling toys, especially dolls. We sell on Amazon for example and all the various online retailers. Instead of investing in managing them, we prefer to offer competitive prices and effective marketing and advertising that supports our brands. Meanwhile, in terms of globalization, it is difficult to penetrate the US market. Now we are working through distributors and pursuing a direct operation model through distributors that are helping us work with Amazon and online businesses. Latin America is a complicated market because its sheer size has prevented us from opening an operation on the ground, which is why we operate through distributors. Mexico is number one and is positioned either at the same level or even above Brazil. Mainly, our growth strategy is to identify more distributors and partners to distribute our toys in Latin American key territories. This is how many other toy companies, including the larger ones, reach these markets.

What are the main growth opportunities in the toy industry in Latam?

There is a significant opportunity in terms of manufacturing for Mexico right now. In the mid to long term, I do not see the cost of selling returning to what were before the pandemic. One of the key variables in the logistics supply chain is sea freight prices for shipping products from places like China, for example. All of the toy manufacturers in Mexico are trying to develop toys in Mexico and we have already had a head start on this with our plant in Monterrey. This will in turn make the US market a more viable proposition.

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