China Toy Industry Development Situation
With the improvement of people’s living standards, the toy market is also gradually growing, and China is the world’s leading toy producer and consumer country. Data show that the retail scale of toys in China is about 83.7 billion RMB in 2021, an increase of 5.93% year-on-year; it is expected to further maintain a growth rate of more than 6% in 2022, and the retail scale can reach 89.054 billion RMB, continuing to lead the global market.
I.The current situation of toy development in China
1.The number of Chinese toy enterprises is large, but the concentration of the industry is low
China is a large toy-producing country, with a large number of toy production enterprises, and is the main concentration of global toy production, as well as the world’s largest toy exporter. However, compared to toy enterprises in developed countries, the market concentration of China’s toy industry is low, and the brand awareness is not high. The small size and short history of enterprises reflect the good opportunities for consolidation in China’s toy industry market.
2.China’s toy industry has obvious cluster benefits
Chinese toy enterprises have significant regional distribution characteristics, mainly concentrated in Guangdong, Zhejiang, Jiangsu, Shanghai and other coastal areas, these provinces and cities are also the more mature development of China’s toy industry. Guangdong is the largest toy production and export base in China, and Shantou City, as one of the areas with the highest concentration of toy manufacturing enterprises and the highest technological innovation capacity and product technological content in Guangdong, has formed a more mature and complete industrial ecology, with obvious industrial cluster effects.
3.Chinese enterprises’ toy sales are mainly in the form of distribution
The sales channels of Chinese toy manufacturing enterprises are mainly divided into distribution mode and direct sales mode, among which the direct sales mode channels are mainly divided into self-built sales channels, professional retail stores, hypermarkets, hip stores and e-commerce platforms. The rapid development of e-commerce in China has changed the shopping habits of consumers. Many consumers now have the habit of online shopping, and expanding the market through e-commerce channels has become an important choice for Chinese toy companies. In addition, with the combination of small programs, short videos and live streaming with e-commerce, these emerging channels have become a new way to sell toys.
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II.China’s toy industry development dilemma
1.The improvement of global product safety and quality requirements
Chinese toys are mainly export-oriented. With the rising awareness of global environmental protection and safety, in recent years, including the United States, the European Union, Japan, Russia, Brazil, India and other countries have upgraded the relevant safety standards or directives for toys, constantly upgrading the directives and applicable standards, so that current situation of toy development in China is facing certain trade barriers.
2.Raw material price fluctuations and rising labor costs
In recent years, the rising price level, cost of living and slowing population growth have led to rising labor costs in China. The toy industry is a labor-intensive industry, and the rise of labor cost will directly lead to the rise of toy production cost and compress the profit margin of enterprises, thus adversely affecting toy production enterprises.
3.The impact of electronic games, online games
With the economic development and the improvement of the level of technology and the popularity of mobile terminal devices, a large number of electronic games, online games and mobile games are introduced to the market every year. This kind of game with strong entertainment experience is popular in the market, causing a certain impact on the traditional toy market. On the other hand, toys and video games both have natural entertainment attributes, and more and more images and props from video games are being developed into toy products with story connotations and leading the toy market trend, which provides certain opportunities for the industry to emerge new business forms and accelerate industrial upgrading.
III、 China’s toy industry development prospects
1.The prospect of China’s toy development is broad
China’s economic development level continues to improve, people’s disposable income increases, the consumption ability is significantly enhanced, which will effectively promote the growth of market demand in the toy industry; with the national liberalization of the two-child policy, which will make China a new wave of baby boom, the number of children will steadily increase. In addition, the increase in the average level of education and the more modernized consumer concept has prompted people to pay more attention to the enlightenment of infants and toddlers, and to take more into account the educational and entertainment needs when purchasing toys, which will make the consumption space of intelligent science and education toys further expand.
2.Industry standard and national industrial policy to promote the long-term benign development of the industry
The Chinese government regulates the industry mainly through the introduction of laws and regulations and the establishment of industry technical standards. In recent years, the Chinese government has continuously introduced new laws and regulations for toys to improve the construction of industry standardization system. The establishment of these laws and regulations and industry standards has laid a good foundation for the long-term healthy development of the industry.
3.The rapid development of animation industry effectively drives the development of the toy industry
Toy products are given cultural connotation and story connotation through the implantation of animation, which improves consumers’ recognition and purchase desire. The year-on-year growth of domestic sales revenue of animation toys in China has made more and more Chinese toy enterprises to focus on animation IP of toy products and strengthen the development of animation toy products to improve economic benefits. The rapid development of the animation industry, as well as the further integration of the toy industry with the cultural industry, animation toys in China will have a good development prospect.
4.Technological progress to promote the upgrade of the toy industry
In recent years, with the popularity of the Internet, cloud upgrading, Bluetooth modules, and chip technology are more often used in the toy production field, further improving the intelligence of toys. The massive content of the Internet and the application of hardware make toys have better effects in terms of intelligence, interactivity and education, and intelligent science and education toys have become the consumption direction of a new generation of consumers. The increasing proportion of intelligent science and education toys in the overall industrial structure is conducive to the development of the toy industry to a high level and healthy direction, and to enhance the internationalization of China’s toy development status.
5.Industrial clusters form a complete industrial chain
China’s toy manufacturing industry is mainly concentrated in Guangdong, Jiangsu, Zhejiang and other regions. Among them, China’s Guangdong Toy as the largest manufacturing export industry cluster, the toy industry region has formed a complete upstream and downstream industry chain, supporting the supply chain of upstream materials such as mold design and manufacturing, plastics, electronics, packaging materials, hardware, professional toy showrooms, domestic and foreign distributors and logistics enterprises providing services for toy enterprises, all gathered in the area where toy enterprises are concentrated.
IV.Development trend of China’s toy industry
1.The concentration of the industry is gradually rising
According to the law of development of the global toy industry, the more mature the development of the toy industry, the higher the concentration of the industry, the easier it is to breed famous brands. At present, China’s toy industry is not highly concentrated, with a large number of enterprises but small in scale, and the market share of individual enterprises is low. With the continuous development and expansion of branded toy enterprises, China’s toy industry will embark on the path of organic growth.
2.China’s domestic market is the focus of toy enterprises to develop
China’s national economy has maintained a high rate of development in recent years, and although economic growth has slowed down, it has still maintained a relatively fast growth. On the other hand, the per capita disposable income of urban residents is on the rise. In recent years, Chinese domestic toy enterprises have taken the initiative to increase the construction of domestic marketing channels and grasp the opportunities in the domestic market. In recent years, enterprises have been strengthening their market development efforts, and China’s domestic market has gradually become a key area for enterprises to explore in the future.
3.Chinese enterprises attach importance to building their own brands
Toy enterprises with their own brands have higher pricing power and higher added value brought by their brands. As Chinese toy enterprises pay more and more attention to R&D innovation, independent brand building and sales channel construction, a few Chinese brand enterprises with independent innovation capabilities can keep up with market changes to develop and design all kinds of innovative products, improve product pricing ability, and maintain good customer relations and sales channel diversity, which increasingly highlights the advantages in the competition.
4.The trend of toy intelligence deepens
As technological innovation continues to break through the boundaries of toys, especially with the arrival of the age of intelligence, the rise of electronic games on the traditional toy industry has brought impact, intelligent toys have emerged as the direction of new product development. In recent years, the proportion of electronic toys in China’s toy development status has been climbing, and the growth rate of retail sales of electronic toys has been higher than that of non-electronic toys.
5.Chinese toy enterprises IP cultivation, derivatives development start-up stage
From the development experience of the global mature toy industry, the combination of toys and animation is an innovative profit model after the toy industry has reached a certain stage of development. The model through the combination of toys and animation, with animation story content and image to improve the added value of products, and through the spread of animation image greatly drive the sales of toys, animation derivative toys have become one of the most important value embodiment of the IP value chain. In recent years, with the development of China’s toy industry, the combination of toys and animation has gradually become the industry’s development trend.
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