What is the market prospect of China's toy industry ?

What is the market prospect of China's toy industry ?
What is the market prospect of the toy industry? With the steady development of China's economy and the continuous increase of per capita disposable income, the development of China's toy industry has been good in recent years. In 2021, the scale of the toy industry has returned to the level before the epidemic, reaching 85.3 billion yuan.

Driven by factors such as increase in residents’ income, improvement in toy consumption concepts, and technology upgrades, the toy industry is expected to continue to grow. In 2022, the market size of China’s toy industry is expected to reach 91.8 billion yuan. In 2026, the market size of China’s toy industry will reach 119.5 billion yuan Yuan.

The toy industry is a comprehensive industry that requires continuous innovation, involving plastics, bamboo, cardboard, hardware, machinery, electric, electronics, sound control, light control, remote control, sensor technology and many other fields. Toy manufacturing refers to the manufacture of entertainment appliances with three basic characteristics of entertainment, education and safety, with children as the main users.

China is the largest toy exporter in the world. Toy products are sold all over the world and occupy a pivotal position in the global toy market. Although China is a big toy producer, it is not a toy producer. Most of the toys produced by itself are mainly exported. Mainly concentrated in the low-end level. Data show that in 2021, China's toy output will be 7.4582 million tons, and exports will reach 3.9673 million tons.

As a big toy producing country, China has a large number of toy manufacturers. More than 70% of the world's toy products are produced in China. From 2016 to 2021, China's toy export value will continue to grow, from US$18.39 billion in 2016 to US$46.12 billion in 2021. Among them, the United States is a major exporter of Chinese toys. In 2021, its exports to the United States will be US$1.38 billion, an increase of 57.3% over the previous year, accounting for 29.2% of China's total toy exports.

Compared with developed countries, the current market concentration of China's toy industry is relatively low. In 2021, among the top 10 brands in the toy market, Lego will be the best, accounting for 7.7%.

Chinese toy enterprises have obvious regional distribution characteristics, and are mainly concentrated in coastal areas such as Guangdong, Zhejiang, Jiangsu, and Shanghai. These provinces and cities are also areas where the development of China's toy industry is relatively mature. 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 manufacturers in Guangdong and the highest technological innovation capabilities and product technology content, has formed a relatively mature and complete industrial ecology, with obvious industrial cluster effects .

Among them, Guangdong Province, as the province with the largest toy manufacturing and export scale in China, has formed a complete upstream and downstream industrial chain in the toy industry area, supporting mold design and manufacturing, plastics, electronics, packaging materials, hardware and other upstream material supply chains, and professional toys. Showrooms, domestic and foreign distributors, and logistics companies that provide services to toy companies all gather in the area where toy companies are concentrated.

The sales channels of domestic toy manufacturers are mainly divided into distribution mode and direct sales mode. The direct sales mode channels are mainly divided into self-built sales channels, professional retail stores, hypermarkets, trendy stores and e-commerce platforms. Against the background of the rapid development of domestic e-commerce, many consumers have formed the habit of online shopping, and expanding the market through e-commerce channels has become an important choice for domestic toy companies. In addition, new ways of integrating mini-programs, short videos, live broadcasts and e-commerce channels have gradually become important channels for toy sales.

With the improvement of environmental protection awareness, international toy giants have already begun to look for more environmentally friendly materials, such as bio-based PE, recycled PET, popcorn, sugar cane, etc. In the domestic market, there are also many toy manufacturers exploring the use of more natural and environmentally friendly materials to produce toys. Some of these products have already been launched into the market, while others are still under development and trials.

As some domestic companies have made breakthroughs in R&D capabilities, technical levels, brands, and IP design, their market share has increased, their competitiveness has continued to increase, and their brand awareness has also continued to increase. Since 2018, the market share of the domestic brand Bubble Mart has continued to increase. In 2021, Bubble Mart will have a market share of 4.3%. In the future, as more and more domestic toy manufacturers continue to improve their brand effects, the leading structure in the industry will be further formed, and the industry concentration will also further increase.

The main consumer group of toys is children aged 0-14. China's implementation of the three-child policy will bring positive factors to the development of the toy industry. At the same time, with the deepening of the concept of "education through entertainment", the diversified needs of infants and young children for toys will continue to stimulate the development of the toy market in the future.

Toy Market Status and Prospect Analysis

China is a big toy producing country, about 80% of the world's toys are produced in China. The most important toy production and export bases are five provinces and one city: Guangdong, Jiangsu, Shanghai, Shandong, Zhejiang and Fujian. Among them, Guangdong Province is a large toy province in China, mainly concentrated in Shenzhen, Dongguan, Guangzhou, Shantou Chenghai, Foshan and other places. Most of the exports of China's toy industry are processed and produced for foreign brands.

Tianyancha data shows that there are more than 5.27 million toy-related enterprises in China (the business scope includes toys, and the enterprise status is active, existing, moving in, and moving out), of which over 83% were established within 5 years, and over 55% are individuals Industrial and commercial households.

From the perspective of regional distribution, Guangdong Province has the largest number of toy-related enterprises, exceeding 590,000; followed by Zhejiang Province and Shaanxi Province. In the past ten years, the number of registrations of Chinese toy-related enterprises (all enterprise statuses) has increased year by year. Among them, more than 1.73 million companies were registered in 2021, a record high; more than 100,000 companies have been registered since 2022, which is equivalent to an average of more than 2,700 companies established every day.

From the perspective of the industrial chain, the upstream of the toy industry is mainly hardware industry, electronic accessories industry, packaging industry, plastic industry, etc., and the main raw materials include plastic, wood, metal, cloth, etc.; the midstream is the design, development, production and processing of toys; the downstream Sales channels mainly include direct sales, distribution, e-commerce, export, etc., and flow to end consumers of toy products.

The data shows that the core exporting countries of China's toys are still dominated by Europe and the United States, but emerging markets such as Southeast Asia, the Middle East, and Africa lead the growth rate. Wu Yun, head of toy industry operations at Alibaba International Station, said that European and American consumers are under the pressure of inflation, and the market growth is sluggish. The large number of children, low per capita consumption of children's toys and good economic development prospects in emerging markets make them an important growth point for the global toy industry in the future.

With the steady growth of China's economy and the continuous rise of residents' disposable income, China's toy industry has maintained a good development trend in the past five years. With the development of China's economy, in the consumption expenditure of Chinese urban and rural residents, the expenditure on toys will become larger and larger. China is a big producer of toy products as well as a big exporter. Most of the world's toys are produced in China, about 90% of China's toy products are directly exported, and more than 70% of the exported toys are processed with supplied materials or samples.

In recent years, domestic toy companies have taken the initiative to increase the construction of domestic marketing channels and seize opportunities in the domestic market. In recent years, the company has continuously strengthened the development of the domestic market, and the domestic market has gradually become the key area for the company to develop in the future.

Toys are no longer just a patent for children, and the diversified participation of the public is an inevitable trend in the development of smart toys. Therefore, smart toys are a combination of high technology, education and entertainment. They are not only used for playing, but also entertaining and educational, suitable for all ages. For manufacturers, these functions add huge added value to them. Often smart toys can be sold at several times the price of ordinary toys, which has won benefits for manufacturers.

With the diversification of functions, toys have got rid of the limitation of only providing entertainment for children, and their functions have gradually adapted to the needs of adults. More and more adults are willing to buy toys suitable for themselves. On the other hand, the intensification of population aging in some developed countries has also given birth to toys that meet the physical and psychological needs of the elderly. Among them, the United States and Japan are the leading countries in the development of toys for the elderly in the world.

As technological innovation continues to break through the boundaries of toys, especially with the advent of the smart age, the rise of electronic games has brought an impact on the traditional toy industry, and smart toys have emerged as the times require, becoming the direction of new product research and development. In recent years, the proportion of electronic toys in China has continued to rise, and the growth rate of retail sales of electronic toys has been higher than that of non-electronic toys.

The income level and consumption power of Chinese residents are constantly improving, the purchasing power of parents is constantly increasing, and the smart toy industry is developing rapidly. Based on the further development and perfection of high-tech technologies such as computers, microelectronics, micro-sensors, and chip manufacturing, as well as favorable factors such as their application in the traditional toy industry, the variety of smart toys will continue to enrich, thereby promoting the development of the industry. It is estimated that the market size of China's smart toy industry is 12.04 billion yuan, a year-on-year increase of 82%.

At present, relying on China's many years of development experience and advantages in labor costs, China's smart toy industry has been showing rapid and healthy development. At present, China has become the world's largest toy producer and exporter. Toy products are sold in more than 100 countries and regions. More than 70% of the total sales of toys in developed countries and regions such as Europe, America and Japan are produced in China. Toys have become one of China's five pillar commodities for export.

As a representative of developing countries, China's per capita player consumption level is very low. Compared with Europe and the United States, there is still great potential for development. Since China's per capita GDP has exceeded the 10,000 US dollar mark, China's consumption structure has changed. Whether it is adult toys or children's toys, there are opportunities for rapid development.

With the advent of the intelligent era, the structure of toy products has begun to tend to be electronic. Compared with traditional toys, smart toys bring more novelty, entertainment and educational functions to children. In the future, they will surpass traditional toy products and become the global The direction of development of the toy industry.

The current economic situation in China is developing well. In the future, per capita disposable income and consumption expenditure will continue to grow. People's consumption demand will continue to increase, consumption patterns will also be upgraded and diversified, and the willingness to consume toys will also increase accordingly. With the opening of the childbirth policy and the gradual implementation of the three-child incentive policy, the number of children in China will increase significantly, and the future market of the toy industry will be broader, and the market size will also have a broad room for growth.
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