CBME China 2024

17-19 July 2024 | National Exhibition and Convention Center (NECC), Shanghai, China

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Market Analysis of China Toy Industry

Market Analysis of China Toy Industry

It is indicated that there are more than 6,000 toy enterprises in China. About 75% toys all over the world are produced in China, and China has become the actual large country for toy production. However, China is not a toy consumption country. The national market capability is even less than the sales volume of one foreign toy enterprise. However, insiders think highly of this potential consumption market. Chen Lvmei, Director of Baby & Children Sector of Guangdong Alpha Animation and Culture Co., Ltd., expressed her sufficient confidence in China’s becoming a large toy consumption country in the future, “when toys become the necessity of Chinese children, there could be a turning point of toy market in China, which could be realized within 5-10 years.” The insiders also point out that foreign enterprises have put more focus on Chinese market, and more and more foreign-oriented Chinese toy enterprises have begun to sell in domestic market. The competition of Chinese toy market would certainly be fierce.

Domestic and Foreign Enterprises Speeding up Occupancy of China Market

It is said that due to the current zero-tariff system for toy import, foreign brands advantageous in both cost and reputation have always been playing a crucial role in the China market. Data indicates that foreign brands and Sino-foreign joint venture brands have occupied nearly 80% of the market. Ms. Liang, a toy designer, indicates that world top 10 toy companies including Mattel Group, Hasbro Group, SEGA and LEGO, etc. have already entered the Chinese market. “In previous time, they entered the Chinese market with the aid of sales agency; while currently, they have adopted the form of opening branches or offices, which has showed their more attention to the Chinese market.” In addition, some cross-country toy leaders have transferred their toy production to China, and established close association with many domestic suppliers. They have begun to speed up the planning of second and third level market when occupying the high-end market.

When foreign enterprises have begun to speed up the planning of Chinese market, a large batch of once foreign-oriented Chinese toy manufacturers have also turned their eyes to the domestic sales and started the planning, which makes the Chinese toy market unprecedentedly prosperous. Ms. Chen told the reporter that during Shanghai Toy Expo in October, 2009, one exhibition hall was especially set up for enterprises transforming their target customers from foreign countries to China, which shows the great need of those enterprises.
Ms. Zheng, the principal of a manufacturer previously engaged in toy export also said that after the international financial crisis, 40% of the toys had been sold for domestic market. “Not only us, many manufacturers like us have also done so.”

Capability of China Toy Market Exceeding RMB 20 Billion

It is obvious that it is the fast growing toy market that attracts robust toy manufactures. Insiders estimated that according to the calculation of factory price of toys, the capability of China toy market has exceeded RMB 20 billion every year and grown at a real fast pace. Ms. Chen stressed that at present, the consumption of China toy market is still holiday consumption or gift consumption, which still exists a gap in comparison with the oversea necessity consumption. She said that as the number of 80s’ parents increase, toy would gradually become the consumption necessity for Chinese children. “At that time, the actual turning point of China toy industry is sure to come, which needs about 5-10 years.”

Insiders point out that there has been essential progress of China toy market in recent two years, the most obvious of which is that local toy enterprises have begun to attach importance to independent R&D and proprietary intellectual property rights. A batch of local toy brands has begun to deploy the market with the gesture of market fresh blood. Auby Toy is currently the top local toy brand. When analyzing the current market situation, relevant principal of Auby considers that although foreign enterprises have their brand advantages, oversea living environment and children’s behavior are quite different from those of Chinese. Foreign brands would probably be unaccustomed to it. As for those enterprises transforming their target customers from foreign countries to China, although they have cost advantage, they lack of the experience of make sales in domestic market. Therefore, for the local brands that have constantly been devoted to the domestic market, there are numerous opportunities. It is reported that Auby will strengthen the investigation on market and customers through establishing early education research center by cooperating with children education specialists recently. The principal noted that “in fact, it has strategic significance for Auby. Our objective is not only the toy production for babies and children, but also the products for pre-school children. Hence, the research on children’s behavior is sure to become a crucial step.”