Toys R Us used to be a wonderland for many kids. Unfortunately, it went bankrupt. Since the 2008 financial crisis, we have seen failures in top retail stores: Circuit City, Linens-N-Things, A&P (the Great Atlantic & Pacific Tea Company), Sports Authority, and Radio Shack.
Most people think Toys R Us was hammered by the new business modality: online shopping on Amazon. However, one missing point is demographics. The population in the U.S. is no longer as young as three decades ago. Households purchase toys when kids are between the ages of 2 and 10. Once children are beyond age 10, they start to learn new skills, which are heavily based on consumer electronics, such as computers, phones, and video games.
Demographics can easily explain this economic trend. While the developed countries are aging, investors should eye on “young” countries, such as India, some Southeast Asian Countries, and some African countries.