TODPOD is all about bringing fresh ideas to modern families. It is the first innovative solution to allow kids to stay purposely occupied and mentally alert, all the while encouraging play-based learning concepts and giving them a sense of pride. The TODPOD is beneficial for the parent to help experience their child’s most pivotal a-ha moments during the developmental stage while the child is learning to develop. Simultaneously TODPOD is providing the perfect platform to aid children's developmental skills, inspire creativity and spark big imaginations! The TODPOD provides children in need with a mobile, steady, and stable table and chair enabling an immediate, lasting, and positive impact on the beneficiary child’s literacy development and overall academic performance. The TodPod is a useful 3-in-one fun and engaging multi-functional product that quickly, easily, and effortlessly converts to a table and chair in that it serves to promote a love of learning and independence in the mind of an infant. For all intents and purposes, it can carry little one’s essentials and playtime items such as toys, books, crayons, snacks, play dough, and much more, and quickly, easily, and conveniently converts into a table & chair. The Table/desk is held in place in the lid of the bag with its legs tucked in under the Tabletop when not in use, so it does not interfere with the function and storage capability of the bag. When you open the bag, it is easy to unclip the table from inside the lid and clip on the legs, and the table is ready for use on its own. Close the bag, pop out the feet under the bag, and there you have the perfect seat for the child to sit on at the TODPOD table and learn critical skills and develop as they play. The TODPOD is undeniably the Toddler’s personal favorite play station and activity center because it can be taken anywhere, anytime, for use indoors and outdoors, and can be used practically on the go for a variety of multi-functional purposes such as playing, eating, writing, sitting, drawing, edutaining or just relaxing. With a truly innovative design, favorable sturdy construction, and adherence to the most unstinting quality and safety standards, not only does it offer immense value, but it is also safe and easy to use! Additionally, and in conjunction with the TODPOD, we have combined a whole ready-made range of accompanying Educational Toys, Games, Puzzles, Science Projects, Mathematics and Literacy activities to stimulate and keep Kids motivated and to continue learning, to play without limits, to satisfy their thirst for knowledge and to spark those big imaginations!

1. Review of Children’s Goods
Market in Russia
2011-2015 Development Trends
Speaker: Michael Safran,
Head of Strategy and Marketing, Detsky Mir
05.02.2011

2. • Market leader Detsky Mir
is Russia’s largest toy and
children’s products retail chain
Executive Summary – Detsky Mir

3. • The children’s products market
in Russia is expected to grow
2.5 times (up to $25.5 Billion)
over the next 5 years – a result
of the increasing birth rate,
economic growth and the
development of the retail sector
Executive Summary – Detsky Mir

4. • The toy market will reach
$6.5 Billion
in 2015
(vs $2.5 Billion in 2009)
Executive Summary – Detsky Mir

5. • Children’s one-stop shops and
hyper/supermarkets are fast
becoming the main retail
channels for children’s products
• The market share of the non-
organized retail sector will drop
by more than 2 times to less
than 15% of sales in 2015
Executive Summary – Detsky Mir

6. • Currently Moscow leads
in the purchase of children’s
products, however – the
regional areas are fast
developing in terms of retail
structure and consumption
Executive Summary – Detsky Mir

7. • Detsky Mir is leveraging its
market leadership by vigorously
expanding its distribution
channels, as well as adding
franchise and internet. It is also
optimizing its current network
of existing stores by increasing
its offerings and services to its
loyal customer base
Executive Summary – Detsky Mir

8. • Detsky Mir is developing its
own trademarks and looking
for value-adding opportunities
in the purchase and
delivery of goods
Executive Summary – Detsky Mir

9. BRIC countries have the highest
potential for toy market expansion
due to their huge populations and
relatively low current expenditure
on toys per child
Toys Market Worldwide

10. The children’s products market in Russia
will grow by 15-17% each year.
The toy market is expected to grow 2.5
times, to reach $6.5 Billion in sales in 2015
Children’s Products Market in Russia 2011-2015

11. • The number of potential parents
in 2007-2015 is growing rapidly
as a result of the baby boom
of 1980-1987. Therefore birth
rates are set to increase
significantly in 2011-2013
Market drivers for years 2011-2015

12. Market drivers for years 2011-2015
• Annual expenses for toys per
child in Europe are circa $280
(April 2010, The NPD Group, Inc.),
in Russia it was $95 in 2009.
Russia is fast catching up with
European expenditure patterns

13. Market drivers for years 2011-2015
• Market share of non-organized
retail (selling low-quality cheap
toys) is decreasing. Branded toys
are gaining market share
• The “Toys” category is evolving
faster than any other category,
e.g. new characters, images,
technologies

14. Market drivers for years 2011-2015
• Clothes and footwear are often
reused by the 2nd and 3rd child
(especially in the regions)
• The consumption of goods and
services is reaching pre-crisis
levels in most retail industries.
Russia’s GDP is also reaching
pre-crisis levels

15. Market drivers for years 2011-2015
• Inflation in 2009 was 8,8%.
Analysts estimate inflation
to be 7.5% in 2010;
7% in 2011-2015

16. Supermarkets and hypermarkets
will be the key competitors
to one-stop shops in the future
Children’s Products Market in Russia in 2011-2015

17. Non-organized retail will lose its market share dramatically
in the coming years.
Children’s Products Market in Russia in 2011-2015
Conclusions for Detsky Mir
One-stop shops (mainly belonging to retail chains) already
stand at 50%-60% of today’s market share in big cities.
Their market share will grow mainly in the regional areas.
Internet purchases will amount to 13% of the children’s
products market in 2015.
Supermarkets and hypermarkets will be the key competition
to one-stop shops.
Supermarkets and hypermarkets
will be the key competitors
to one-stop shops in the future

18. Children’s Products Market – 2009
One-stop shops
There is a trend of regional expansion
and merging, involving third-party
investors among the one-stop shop
market players

19. Key events of 2010:
• “Sberbank” (the biggest bank in Russia)
purchased 25% shares of Detsky Mir
• Detsky Mir launched internet retailing.
By the end of 2011 it will have the largest
internet retailing site for children’s products
• “Zdorovy Malysh” completed the
acquisition of “Deti”
• “Uralsib” bank purchased 25% shares
of “Akademiya”
Children’s Products Market – 2009
One-stop shops
Detsky Mir is the undisputed leader
in the children’s products category

20. The average annual expenditure per child
in Russia today is $403. In Moscow it is much
higher than in the regional areas. The greatest
potential lies in developing the retailing sector
in the regional areas of Russia
Children’s Products Market – Regional Breakdown

21. Russian parents spend more
than half the budget for their
children on clothes and footwear.
Increases in family income
directly results in dramatic
increases in the expenditure
on toys. With economic growth
in Russia expendable income
is increasing
Purchase Breakdown for Children’s Products

22. Biggest issue is availability
and quality of goods. Price
is second, and service is third
Factors in Consumer Selection of Store

23. Recommendations by relatives and
friends and the ‘suggestions’ of shop
assistant’s are the main factors that
influence the customer’s buying decision
Creditability of the Sources of Information

24. Detsky Mir holds almost 10%
of the total toys market in Russia
Detsky Mir – Market-share of the
Children’s Products Market in Russia

25. Detsky Mir Group at a glance
• Active organic growth (CAGR about 30%)
financed by debt
• 5 Billion equity injection from “Sistema” and
“Sberbank” in 2010 to finance further growth
and refinance debt
• Focus on operating efficiency and further expansion

26. Detsky Mir Group at a glance

27. Detsky Mir strategy for 2011-2015

28. Detsky Mir aims to increase
the volume of direct
shipments and expand its
own trademarked goods
Detsky Mir Future Sourcing Strategy

29. • Best value toys with the
widest selection on offer
• Positioning as industry leader;
to customers, partners,
industry, government and
social organizations
Detsky Mir is the best and largest
toy retailer In Russia

30. • Niche market toys:
for children with limited
abilities, educational toys
• The first retailer to introduce
global novelties to Russian
customers
Detsky Mir is the best and largest
toy retailer In Russia

31. • Own trademarks development
• Social responsibility and
charity projects programs
connected with toys
and children
Detsky Mir is the best and largest
toy retailer In Russia

32. • Support for government
and legislative initiatives
and industry development
• In-store playgrounds
Detsky Mir is the best and largest
toy retailer In Russia

33. Thank you!
Michael Safran
Msafran@detmir.ru