The Rise and Fall of a Hot Toy

Why do trendy toys often fizzle out quickly? We traced the story of one toy to find out.

One evening in August 2010, Cheong Choon Ng came home to find his daughters, ages 9 and 12, making bracelets out of rubber bands. He decided to join the fun.

But his big fingers made it difficult to weave the tiny bands together. To solve the problem, Ng, an engineer, created a loom by arranging pushpins in rows on a wooden board. He and his daughters began looping the bands around the pins to make complicated bracelet designs. The girls took their bracelets to school, and their classmates were hooked.

Ng searched online, but nothing like his loom existed. So he and his wife invested $10,000 of their savings to turn the toy into a product they could sell. Their investment paid for the manufacture of looms and rubber bands in China. Ng printed the instruction manuals himself. Rainbow Loom was born.

A Big Break

For a year, Ng tried to sell the toy to stores. Most declined. They thought the loom would be too hard for kids to use.

Ng’s daughters saved the day. They made videos of themselves weaving bracelets. The videos went viral. Small online orders rolled in, then a few from local toy stores. In July 2012, a store in Alpharetta, Georgia, placed a $10,000 order. Ng asked neighborhood kids to help him assemble the order. He paid them in ice cream.

That was the break Rainbow Loom needed. The Georgia store offered bracelet-making lessons. The classes filled up right away. Other stores soon followed suit.

Sales grew by 50% each month for about two years, says Ng. In 2013, more than $124 million worth of Rainbow Looms were sold, according to the NPD Group, a consumer tracking service. By the middle of 2014, the loom had been shipped to more than 75 countries.

Why did Rainbow Loom spike in popularity? Several factors can produce a hot toy. Rainbow Loom had all the right ingredients: online buzz, great word-of-mouth, and the right combination of supply and demand.

When the demand for a toy skyrockets and the supply doesn’t keep up, the price can double or even triple. The initial price for Rainbow Loom was around $15. As demand increased, Ng remembers prices rising to $20 in some stores and as high as $60 on Amazon. But if supply increases or demand decreases, prices can fall just as quickly. (So think twice about begging your parents to pay a lot for a hot toy! Be patient. It might not be worth that much, and the hefty price tag might not last long.)

Fall of a Fad

Supply of the looms increased as copycats entered the market. Competing companies sold cheaper rubber bands. By the end of 2014, the craze started to fade. By 2016, annual sales were $13.5 million, about a 10th of what they had been at the toy’s peak. Today, you can buy a Rainbow Loom for just $9.95.

Knowing the trend wouldn’t last, Ng kept his eye on the future. Now he’s inventing toys that teach girls how to code. “We knew [the fad] would go away,” he says. “We were prepared for that.” —By Hayden Field