Gifts / Sports & Toys

According to Huacheng Import and Export Data Watch, Jay Foreman, CEO of Basic Fun, a US toy manufacturer, said that about 20 factories it has partnered with in China have told employees not to return to work immediately after the Lunar New Year, as US inflation continues to rise and retailers' huge inventory in the first half of last year has yet to be digested. The company's main products are Care Bears Rainbow Toy Bears and Tonka Toy Cars.

Foreman said that every factory he asked said it had fewer employees this year than last year. However, he predicts that US demand will pick up in the second half of the year.

In the just past Christmas season, poor sales of Christmas toys have slowed the performance of several major toy listed companies around the world. According to Huacheng Import and Export Data Observation, in the fourth quarter of 2022, Mattel's net sales amounted to 1.402 billion US dollars, a year-on-year decrease of 22%; Operating revenue was $79 million, a year-on-year decrease of $178 million; Net income was $16 million, a year-on-year decrease of $210 million. Import and export data show that Hasbro's revenue in the fourth quarter was $1.68 billion, down 17% year on year. The consumer goods department (i.e., toy consumer goods) revenue was about $1 billion, down 26% year on year, making it the largest decline among the three major business segments. Due to poor performance, Hasbro even decided to lay off 1000 employees globally.

According to the Huacheng Import and Export Data Observation Report, China's toy, game and sports goods sold to the United States account for about 6% of the total import volume, with a slight decrease in the proportion of toys.

"Almost all people's necessities have been severely hit, which is a combination of high inventory and declining demand, and the situation for consumer electronics is similar," said Johan Annell, a partner at Asia Pacific Consulting. However, there are also some industries that are relatively good and are still busy shipping to make up for the things that must be delivered last year.

The United States is China's largest single trading partner, and retail sales in the United States have significantly cooled in recent months. China's exports to the United States grew almost zero last year, and this year, due to the downturn in the United States, the outlook is even less promising. This has not taken into account factors such as tariffs and tensions between the United States and China.

The Chinese Customs Administration stated in January that China's exports are facing pressure from declining external demand and increasing risks of global economic recession.

According to Huacheng Import and Export Data Observation, the high inflation in the United States in 2022 caused serious damage to the middle class in the United States, with 80% of middle class families having to use their savings to make a living, and nearly 75% of families being forced to curb unnecessary spending.

The United States experienced high inflation in 2022, with inflation once reaching a 40 year high of 9.1%, which severely hit middle-income households in the United States. A survey released recently by a financial services company in the United States shows that 82% of middle-class American households have to stop saving or withdraw their previous savings to make up for the difference between the high cost of living and their income in the last three months of 2022. "The middle class in the United States is spending their savings to make a living," the company said.

In order to cope with inflation, respondents have indicated that they will reduce or stop spending in the coming months. 39% of middle-income households said they had already taken such measures in the fourth quarter of 2022 to prepare for 2023. Nearly 75% of households say they are curbing unnecessary spending. Another 47% of households said they were delaying maintenance of their cars or homes.