Gifts / Sports & Toys

Affected by factors such as high international oil prices, multinational toy companies Mattel, Hasbro, and Lego have recently adjusted prices for their products, with individual varieties increasing by more than 20%. China is the world's largest toy producer and exporter and the second largest toy consumer market. What is the current situation of China's toy industry? Will the price of Chinese domestic toys follow the rise? With regard to these consumer concerns, while the 34th Shenzhen International Toy Fair will be held from August 18th to 20th at the Shenzhen International Convention and Exhibition Center Bao'an New Hall, the author has a deep understanding of Li Zhuoming, the chairman of Guangdong Toys Association, the largest toy production base in China. Did an interview.

The market is severe and complex

Li Zhuoming said that the operation of China's toy industry in 2022 will be complicated and severe.

In terms of product exports, from January to June, China's traditional toy exports reached US$21.399 billion, a year-on-year increase of 24.7%. Although the results seem to be good, due to the high price of raw materials and the continuous rise in production costs, the profits of many enterprises are not satisfactory. , the business is struggling. What is even more serious is that, affected by the repeated global new crown pneumonia epidemic, the demand in the international trade market is showing a weakening trend. The growth rate of product exports increased by 28.6% year-on-year in January, and fell to less than 20% in May.

In the domestic market, the difficulties are also not small. Due to the frequent occurrence of the epidemic, wholesale markets, shopping malls, supermarkets, off-campus stores, boutique gift shops, amusement parks and other major toy distribution places across the country are closed from time to time; toy sales on e-commerce platforms have also suffered from poor logistics and delivery. The problem of slow delivery and poor consumer experience.

In terms of price, the current competition in the same industry is still relatively fierce, so although the price of raw materials has soared, the overall price of products tends to rise, but the magnitude is not large, and the market retail price of some products such as electric strollers has even dropped year-on-year.

Consolidate the industrial chain

Chinese toys are an export-oriented industry. With the official entry into force of the Regional Comprehensive Economic Partnership (RCEP) in January and the lifting of epidemic isolation measures in Vietnam and other countries, the production costs of toy companies in Southeast Asia are much lower than those in China. , some people worry that the foreign trade orders of Chinese enterprises will gradually lose.

In this regard, Li Zhuoming believes that China's toy industry has developed in the market competition. Taking Guangdong as an example, Guangdong produces about 70% of the toys exported to China, accounting for about 50% of the global market. Facing the rising competitive pressure at home and abroad, the company strives to create its own brand and develop products to enhance the added value. By the first quarter of this year, the proportion of "general trade" in Guangdong toy's own brand exports rose to 43.9%, while "processing trade" dropped to 27.2%, which also reflects the achievements of the transformation and upgrading of China's toy industry from one side. In fact, Chinese toy companies now attach great importance to technological innovation. With the help of the industrial Internet, the cultivation and incubation of "specialized, special and innovative" and "little giant" companies is also very effective.

Since the production technology of toys leads the world level, it is difficult for international competitors to replace the advantages of Chinese toy companies. After the Sino-US trade friction occurred, some multinational toy companies tried to transfer orders to other countries, but due to the difficulty in guaranteeing product quality, construction period and service, the orders returned to Chinese manufacturers. Based on the technology and industrial chain advantages of toy companies and the good atmosphere of the overall business environment, China's toy industry continues to maintain its competitiveness in the international trade market.

"Professional, special and innovative" seek breakthroughs

It is another trend that attracts attention in the operation of China's toy industry.

According to Li Zhuoming, although the per capita toy consumption level of Chinese children is not high, but the population base is large, it is the second largest toy consumer market in the world after the United States. In 2021, the consumption of traditional Chinese toys is estimated to reach 77.28 billion yuan. Market consumption exceeds 100 billion yuan. Such a big cake has attracted world-renowned toy companies to enter the Chinese market. For example, the "Toys R Us" in the United States has continued to expand its stores to over 200, and the "Lego" brand retail stores in Denmark have sunk to third- and fourth-tier cities.

In the face of strong competition from international big brands, Chinese toy brands not only compete with high cost performance, but also take a new approach with "specialization, specialization and innovation". For example, building block toy companies have developed products with local characteristics such as "Liaoning", "Forbidden City" and "Anhui Residential Houses" by leveraging the current strong domestic trend of "national tide economy". At present, many enterprises in Guangdong Province, such as Senbao Building Blocks, Qunlong, Xiongcheng Plastics, and Gaodes, have been recognized by government departments at all levels as "specialized, special, and new" small and medium-sized enterprises.

Diversified development of toy consumption

Li Zhuoming said that despite the complicated and severe operation of the toy industry this year, there have been some gratifying changes in the market thanks to the efforts of enterprises. At the beginning of the year, the Olympic mascot "Bing Dun Dun" was hard to find. Recently, consumers have been rushing to buy the Duck Duck toys that go with the KFC package. Behind this is the trend that toy consumption has successfully expanded to the youth group, which will provide more opportunities for the industry. Broad areas of expansion. At present, some companies have tried to launch NFT toys (digital toy collections) while the Metaverse is hot, and they have also gained something.