Gifts / Sports & Toys

A few days ago, the General Administration of Customs released the toy export data for 2022: According to the customs data, the total export volume of toys in the whole year was 48.356 billion US dollars, an increase of 5.6% year on year, lower than the growth rate of 10.5% of China's goods trade export in 2022. Compare this growth rate with 37.7% in 2021, and the growth rate will fall sharply.

Looking back on the whole year, China's toy exports performed fairly well in the first half of the year, but the overall growth rate was no longer soaring. The growth rate of the whole year slowed down, and negative growth occurred in the second half of the year and even for several consecutive months. However, the epidemic, geopolitical conflicts, inflation and other factors that affected manufacturers' export orders last year may continue to exist in 2023.

In the first year of the outbreak of the epidemic, China's toy exports experienced several months of downturn, and the year-on-year growth from negative to positive since July 2020. Since then, China's toy industry has entered an upward and positive development stage with positive year-on-year growth for 26 consecutive months. This momentum ended abruptly in September 2022. Customs data showed that in September last year, China's toy exports amounted to US $5.195 billion, down 9.4% year on year, showing negative growth again and maintaining negative growth in the next three months.

The negative growth occurred in September last year, and before that, China's toy export has no longer continued the high growth trend. According to customs data, in 2022, the highest growth rate of China's toy export appeared in June, and then the growth rate began to fall back, especially in August and November, the growth rate dropped precipitously and fell to negative growth. By December, although the export volume had rebounded, it still fell by more than 10% compared with the same period in 2021. For this situation, the industry believes that on the one hand, it is caused by the overseas customers' request for the factory to ship goods in advance, and on the other hand, it really reflects the current situation of insufficient orders of enterprises.

According to customs data, in the first quarter of 2022, the order volume of most enterprises was good, and many enterprises achieved year-on-year growth. However, in the second quarter, especially in the second half of the year, enterprises reported that the order volume was not enough. However, from the actual situation of specific enterprises, some enterprises operate fairly well, and the annual sales can be at the same level or slightly lower than that of 2021, but the growth rate of order volume in the fourth quarter decreased significantly; There are enterprises with good performance growth, but they are also faced with customers transferring orders to Southeast Asia and other regions; There is also a serious decline in the number of enterprises' orders, and even some factories can not open for a long time.

Last year, China's toy exports faced a more severe objective situation. First, the conflict between Russia-Ukraine conflict broke out in late February, causing many players to lose orders from Ukraine and its neighboring countries. It is a relatively good situation to be asked by customers to suspend production and deliver goods. What is more serious is that the orders have been cancelled, especially for the manufacturers that have already delivered goods, and they may not receive the final payment, which is really worthless.

Secondly, the Russia-Ukraine conflict impacted the global supply chain, commodity prices soared, the euro, sterling, ruble and other currencies fell against the dollar, and global inflation became more serious. At present, developed countries including the United States, Germany, the United Kingdom and emerging market countries are in a state of high inflation. Such factors have greatly increased the cost of living of consumers in various countries, and the expenditure on non-necessities such as toys has been compressed; The increase in the import cost of the purchaser and the decrease in the purchase volume will ultimately reflect the decrease in the order volume at the upstream suppliers.

Third, the rules of cross-border e-commerce platforms are changeable and have a great impact on Chinese sellers. Although Amazon is not the only cross-border e-commerce platform, its popularity and traffic are far ahead of other platforms, especially in the major toy consumption markets of the United States and Europe. However, since the year before last, the operation of Chinese sellers in Amazon has been on thin ice - I don't know when their stores will be closed for any reason. Therefore, they are more cautious in operation and dare not store too much goods in Amazon warehouses, which has also greatly reduced the orders of cross-border customers of manufacturers. In addition, Amazon's rising distribution fees, fuel and inflation surcharges have also increased the operating pressure of small and medium-sized sellers.

These objective factors still exist this year. By the time of press release, the Russia-Ukraine conflict had not stopped, and the "high fever" of global inflation had not subsided. Several economic institutions believe that the global economy will continue to grow at a low rate in 2023, and predict that the annual growth rate will not exceed 3%, or even less than 2%. According to the heads of many manufacturers, they have not received many overseas orders at present, but the resumption of overseas exhibitions such as Hong Kong Toy Fair is good news. We look forward to expanding new customers through these exhibitions.

If 2022 is favorable for toy export, it must be the decline of shipping charges. It is understood that the sea freight began to decline slowly in the second half of the previous year, and fell sharply after 2022. The reporter of the China and Foreign Toys All Media Center checked the data and found that at the beginning of July last year, the container price from Shenzhen port to Los Angeles, New York and Europe was still more than 5000 dollars per container, and the popular routes were nearly 10000 dollars, but by the end of October, it quickly dropped to less than 5000 dollars. In the middle of January this year, container prices from Shenzhen to Los Angeles and New York fell slightly, while those from Europe fell more.

In 2021, when the sea freight rate skyrocketed, the unit price of containers on popular routes would reach as high as 15000 to 20000 dollars, and the express ship would even cost 20000 to 50000 dollars. Even in this case, it is still "hard to find a cabinet". However, in 2022, not only the sea freight dropped sharply, but also the empty containers piled up.

According to relevant data, in the fourth quarter of last year, all major coastal ports in eastern China experienced the phenomenon of empty container stacking in varying degrees. For example, by the end of last year, the volume of empty container stacking in Shenzhen Yantian Port has reached a new high since March 2020; Nansha Port once faced a 90% stacking rate. According to the data released by the Port Association, in 2022, China's foreign trade container volume fell by 9.7% year-on-year, while the number of empty containers increased by 23.73% in the same period. Some logistics enterprises said that in 2022, they would "kneel down", that is, they would have to ask customers to rent containers.

As a result of the decline in sea freight, on the one hand, the demand of importing countries decreased, and on the other hand, the number of containers surged. According to the data, after the sharp rise in shipping costs, container manufacturers accelerated production, resulting in the global number of new containers reaching 7 million TEU in a year, and the global number of containers reached saturation.

According to customs data, compared with December 30 last year, China's export container freight composite index fell by 2%. Among all routes, except the South American route, which rose slightly by 0.2%, the rest routes fell across the whole line. One week later, on January 13, the data showed that the composite index of China's export container freight rate fell by 4.3% again, with South Korea, Europe, and East and West Africa being the three routes with the largest decline. The industry believes that according to the current demand for sea transportation, the sea freight this year is likely to continue to fall, or even return to the level before the epidemic.