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Shenzhen International Toy & Education Fair
25 - 27 May 2020 Shenzhen, China Show update

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The disruption wrought by the coronavirus earlier this year that threatened the toy industry’s carefully orchestrated schedule of manufacturing is showing some signs of easing.

Early evidence arrived late last week when Spin Master CFO Mark Segal, in pulling the company’s financial forecast for the year,  said there had been a “substantial improvement” in the Asian supply chain And it was further cemented Monday when Hasbro CEO Brian Goldner told CNBC that while the company may “miss some shipments,” it is catching up, and that its suppliers’ production will be fully caught up by April. Toy production typically resumes in February following the Lunar New Year celebration, but was delayed by the spread of the coronavirus there.

Manufacturing Capacity Increasing

Indeed the factories in China that produce more than 80% of U.S. toys are expected to be at 77% of total capacity by week’s end and 95% by mid-April, says Stephanie Wissink, Senior Analyst at Jefferies. Staffing at the plants is expected to be at 85% later this week and 95% by mid-April, she says. That’s against Chinese factories being at 50% of capacity with 56% of the workforce at the start of this month, according to a survey from the Institute for Supply Management.

Goldner hedged slightly in noting the difference in catching up with orders “is subject to what happens around the world as some markets are closing while others are still open and robust.”

Retail Buying Patterns

That variance also will hinge on retailers resuming typical buying patterns, a task made that much harder by stores closing globally in an effort to stem the spread of disease. Toy industry executives say retailers may trim orders as much as 10% as they devote more open-to-buy and shelf space to essential products such as household cleaners and food. In some cases, shelf space in toy departments is being commandeered for expanded inventory of essential household goods. And some toy categories like games and puzzles, building sets and crafts and activities have been in tight supply as parents search for activities for their homebound children.

The first half of the year – with the possible exception of Easter – typically is a slower sales period than the third and fourth quarters. For example, 6-8% toy sales come in March-April against 60-65% in November-December, say analysts.  And many of the retailers that have been deemed essential in the U.S. and remain open amid the retail closings- mass merchants, drug, grocery and dollar stores — typically account for 80-85% of toy sales. And holiday toy production doesn’t typically begin until May.

The sliver of optimism in the toy industry now is in contrast to just a few weeks ago when the coronavirus was raging across China, delaying the re-opening of factories and workers’ return to them. At the time, MGA Entertainment CEO Isaac Larian estimated that shipments of the company’s new top-selling LOL Surprise products could be delayed by seven weeks and forecast overall global toy sales might decline 6-8% this year. The industry is coming off a 4% decline in U.S. sales in 2019.

- Posted by Licensing International

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Licensing International

Licensing International has been at the center of the multi-billion-dollar worldwide licensing industry for 35 years, helping companies profitably grow their businesses through an unparalleled network of information and membership.
200313_Surviving Coronavirus; what toy companies need to do
it is certainly more enjoyable to read about history than to live through it.

Yesterday, the theatres in New York City went dark, the NCAA canceled March Madness, and all major professional sports leagues shut down. All this, while schools closed, churches were asked to cancel services, and the stock market plummeted.

It was astonishing to see the tipping point take place over the course of a few hours. At 11:30 yesterday, I slipped out to the grocery store only to find business as usual. At 4:30, when my life partner went out to buy groceries, she faced lines so long that they were in the shape of a "W."

Yesterday was a day that will be written about in history books. I have to say, however, that it is certainly more enjoyable to read about history than to live through it. When we read a history book, we are presented with closure. When we live through history, we experience the uncertainty of how and when things will work out.

We in the global toy industry are undergoing convulsions in our supply chain.  The virus is striking different parts of the world at different, disjointed times. China was hit first and is getting back on its feet. Unfortunately, just as China is beginning to ramp up production, the consumption parts of the toy market (primarily Europe and North America) are increasingly slowing down. 

In this type of environment,it is challenging to know what actions to take. I think it is essential to take a long view. Business will eventually get back to normal, in weeks or months. People will consume and factories will produce. The challenge is, therefore, to have a strategy for surviving short term and a vision for prospering long term.

Here are some suggestions for successfully rafting through the current economic white water:

·    Keep in close and constant communication with suppliers and customers. Know inventory conditions, not for just for your own business but for those who supply and purchase from you.

·    Don't wait for the federal government to provide a solution but plan for how your business is going to make ends meet while cash flow is limited.

·    Keep a close eye on what movies, games, toys, and other entertainment properties and play products are going to be delayed.

·    Ask creditors for help. It is, ultimately, in their best interest to keep you healthy.

·    Look for opportunities. Are games going to be in demand (primarily through e-commerce providers) for families that want to avoid cabin fever?

·    Are toys going to look appealing to parents who wish to keep their children entertained?

Despite these words of concern and caution, I feel realistically optimistic. The virus has begun to subside in China and Korea, and, with the actions that state and local governments, as well as private citizens, are taking, we should hopefully find the same hopeful ending to our moment in history hopefully sooner than later.

- Posted by Richard Gottlieb in Global Toy News

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Global Toy Expert

Richard Gottlieb, CEO
Global Toy Experts is a world-renowned consultancy and resource for toy industry insight and information. We provide cutting-edge analysis and strategies to domestic toy manufacturers as well as to international providers who are looking to raise their profile in the United States & the world. We provide a full range of services for inventors including licensing and manufacturing as well as providing M&A services for companies looking to acquire or be acquired in the toy space.

The short answer…it depends.

Offline sales ground to a halt from late Jan through the end of Feb while China’s population has been under quarantine (and online sales didn’t fare much better). It’s the worst 6 weeks since our inception.

BUT…that doesn’t mean EVERYONE thinking about launching should wait. This may be one of the easiest times to launch online in China that we’ve seen in quite some time.

Let me explain…

How your business is structured and how people discover your products matters more.

So if you have some awareness and there is already a solid commercial case, don’t wait. It’s a wonderful time to make your move.

Because of the crisis, we are seeing “unprecedented” levels of support from Tmall and JD category managers.  We’ve gotten more attention from their staff in the past month than in the last year.

They’re more willing to offer support, upgrades, and opportunities for brands.

Things we’ve seen so far: more free traffic resources, automatic rank advancements, optimal positioning and subsidies (funding) for strategic brands and product categories. You name it.

Bottom line…if you have a bit of traction and good fundamentals, I think it’s a great time to launch.

#China #eCommerce #Launch #Tmall #JD

- Posted by Josh Gardner @ Kung Fu Panda

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Josh Gardner

Kung Fu Data

Josh Gardner, CEO
Josh is the CEO and Co-Founder of Kung Fu Data, an ecommerce partner whose sole mission is to help brands thrive in China’s online marketplaces. He leads from deep in the trenches and operates a portfolio of successful flagship stores on Tmall and JD. A fluent Mandarin speaker and senior China strategist, Josh has helped hundreds of brand owners with China ecommerce launches and is a recognized expert in market entry, brand control and performance management.
Two Lego construction workers build something together out of plastic bricks on December 14, 2019 in Poznan, Poland.

At a time when there seems to be so much disruption over the Coronavirus which followed the threat of tariffs which followed the Toys R Us collapse, it is refreshing to see a major toy company make a conspicuous commitment to the toy market.

This month Lego announced that it was opening more retail outlets in China. That's according to a Wall Street Journal article by Saabira Chaudhuri entitled: "Lego Commits to China Expansion as Revenue Climbs." As Ms. Chadhuri puts it: " it will open 150 new stores this year, mostly in China, after opening the same number last year—pushing to meet what it says is that country’s growing demand for its toy bricks."

That 150 planned stores plus the 150 opened last year plus the 60 already existing stores will bring the total of Lego outlets in China to 360. To provide some perspective on that 360 number, the U.S. has a total of 100 Lego stores. That says a lot about the potential in the Chinese market as well as Lego's confidence in global trade.

Lego is a highly valued brand in China. Last year, I led a round table discussion with Asian toy industry leaders during the Guangzhou Toy & Educational Fair. One of the things that came up was the importance of western brands to Chinese consumers. I asked whether consumers might be attracted to lower-priced versions of Lego.  Attendees were quick to tell me that Chinese parents and children would be ashamed to use a lower quality product.

Bottom line: Good for Lego and good for China. And, yes, good for the toy industry.

- Posted by Richard Gottlieb - Global Toy News

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Global Toy Expert

Richard Gottlieb, CEO
Global Toy Experts is a world-renowned consultancy and resource for toy industry insight and information. We provide cutting-edge analysis and strategies to domestic toy manufacturers as well as to international providers who are looking to raise their profile in the United States & the world. We provide a full range of services for inventors including licensing and manufacturing as well as providing M&A services for companies looking to acquire or be acquired in the toy space.
200313_No Country Comes Close to China's Manufacturing Capacity. Apple Finds That Out and We All Learn.
The number of migrant workers in China, who do much of Apple’s production, exceed Vietnam’s total population of 100 million.

There is a must-read article in the Wall Street Journal by Tripp Mickle and Yoko Kubota. Entitled "Tim Cook and Apple Bet Everything On China. Then Coronavirus Hit." The article is about the impact of the Coronavirus on Chinese manufacturing and the effect on Apple's production and retail sales there.

Apple employs over three million people in China. The companies products are built in factories that function at an unimaginable scale. Some employ 250,000 workers. In other words, for Apple, there is simply no other place it can go to match even a small part of China's productive capacity.

What I found of interest and what I wanted to share with you was this paragraph:

Finding a comparable amount of unskilled and skilled labor is impossible, said Dan Panzica, a former Foxconn executive. The population in China has allowed suppliers to build factories with a capacity for more than 250,000 people. The number of migrant workers in China, who do much of Apple’s production, exceed Vietnam’s total population of 100 million. India is the closest comparison, but its roads, ports and infrastructure lag far behind those in China.

Also of importance to Apple is that, according to the article, one-fifth of Apple's revenue comes from sales in China. If they leave, they may turn off the Chinese government and the country's consumers who love Apple products. How many toy companies are aware that so many Chinese citizens have the money to afford Apple products that it is 20% of the company's revenue. How many toy companies are getting 20% of their sales out of China?

The big takeaway for those of us in the toy industry is that China works on a whole different level by a magnitude when it comes to manufacturing. Companies may want to have one or two alternative factories in other countries, but China is and will be for the foreseeable future the only place to be for manufacturing.

- Posted by Richard Gottlieb - Global Toy News

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Global Toy Expert

Richard Gottlieb, CEO
Global Toy Experts is a world-renowned consultancy and resource for toy industry insight and information. We provide cutting-edge analysis and strategies to domestic toy manufacturers as well as to international providers who are looking to raise their profile in the United States & the world. We provide a full range of services for inventors including licensing and manufacturing as well as providing M&A services for companies looking to acquire or be acquired in the toy space.
200313_The Time to Enter the Chinese Market is Now

As the recent breakout of the coronavirus, China now is the central spot for hot topics and controversy. With its dropping birth rate, some may ask: is it still the Gold mine for Infant and Toy Industry? Actually, all these should NOT scare businesses away.

According to the recent news, the birth rate in China hit its lowest in 2019. The number of newborn babies reached 14.6 million – a decrease from 17.8 million in 2016, which was the year when the second-child policy started. What matters more is that the second child accounts for 57% of the total birth.

In other words, it’s pretty obvious that young Chinese couples are reluctant to have babies! In fact, real estate prices and the growing trend of individualism seem to be the most effective contraceptive against the growth of the birth rate in China. This is not a good sign for the Infant and Toy Industries.

BUT, China is still a top growing market for toys (as well as a top growing economy if that matters). How is it possible when you have fewer babies?

200313_The Time to Enter the Chinese Market is Now_3
Source: HKTDC

Therefore, now the question can be described as how to make consumers choose my toy? Well, I guess a universal answer would be MarketingBranding, and Positioning. They play a crucial role in the competition, which eventually leads to purchase preference. There’re plenty of successful cases across different industries to be found on the internet. Though do keep in mind that China is still failing behind a lot in terms of the average spending on a national scale. But this actually provides another opportunity for smaller businesses.

Due to the market size of China, a business only needs to capture a small proportion of the market, and that’s already enough to achieve huge success. Therefore for smaller players, one possible solution to get tapped into China is through the rural market. In a way, it helps smaller brands to avoid head-to-head competition with big names as they probably don’t have sufficient funds to burn for marketing.

An extreme-but-real example is Pinduoduo (NASDAQ: PDD, Chinese: 拼多多) – a domestic eCommerce business that targets less developed rural market for consumers who want to pay less. With its effective marketing and sharing strategy over social platforms, today it has grown to become the top 3 eCommerce platforms in China. I think they're at least two things PDD taught us:

·    Never underestimate the purchasing power from a less developed region

·    Never neglect the diversity of China

How long does it take from zero to being listed on the New York Stock Exchange? The answer from PDD is less than 3 years. Who knows, maybe we should expect a toy company to beat this record. After all, is what we can really dream of from the tremendous potential of China.

- Posted by Richard Gottlieb - Global Toy News

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Global Toy Expert

Richard Gottlieb, CEO
Global Toy Experts is a world-renowned consultancy and resource for toy industry insight and information. We provide cutting-edge analysis and strategies to domestic toy manufacturers as well as to international providers who are looking to raise their profile in the United States & the world. We provide a full range of services for inventors including licensing and manufacturing as well as providing M&A services for companies looking to acquire or be acquired in the toy space.
200313_The Time to Enter the Chinese Market is Now_2

Hape

Jun Cai (Patrick), Global Marketing Manager
Jun CAI (Patrick) is the Global Marketing Manager of Hape. He leads the company’s marketing operation, including communications, research and analysis, public relation, and international marketing. Before his role at Hape, Jun’s career path is reflected in his exploration of the Hobby and Toy sector from upstream to downstream. Along the way, he has been fortunate to have found his passion for branding, strategy, and market insight. After finishing high school in China, Jun studied Business oversea for four years and graduated from the State University of New York in 2012. Later, he obtained a Masters of Science degree in Entrepreneurship, Innovation, and Management from the University of Nottingham. Jun has studied and worked under international settings for over ten years, and he enjoys meeting with people from different cultures.
yahoo finance

Companies are expecting to see an impact from the coronavirus in the toy industry. The Toy Insider Senior Editor James Zahn joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss the details on The First Trade.

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200313_China is Not Alone The Coronavirus and the Toy Industry
"No man is an island," and no country is either. China is not alone.

Franklin Roosevelt famously said, "The only thing we have to fear is fear itself." That was, of course, his calming words to an anxious Depression-era inauguration audience. We could use some of that advice now. Some are responding to China and the Coronavirus more out of fear than rationality.

I, like you, have many friends in China. We are concerned about them and their families and hope that the current scare ends soon.

Sadly, there will, for the first time in decades, be no Chinese Pavillion at the New York Toy Fair this year, and many familiar faces from China will not be in attendance. It is easy to see why. One very senior Chinese industry leader wrote to me that he could not attend because there is a fourteen day incubation period required for Chinese visitors to the U.S.

And its not just people that are being stopped. I saw this quote in a Washington Post article by David J. Lynch entitled: "Virus threatens U.S. companies’ supply of Chinese-made parts and materials."  "Major airlines in the United States and Europe are halting their cargo and passenger flights to China for up to two months." I can understand the concern regarding people who may be sick, but you can't pack a virus in a box.

The toy industry is fully global, with 86% of its production taking place in China and a growing part of its revenues as well. No man is an island," and no country is either. China is not alone in this as we in the toy industry are, due to the Coronavirus, going to feel the impact of potentially significant disruptions in the supply chain over the next few months.

Yes, the Coronavirus is worrying. Just take a look at the mask-wearing citizens of Hong Kong or the empty streets of Wuhan. Let's do our part to assure that the social, political, and economic bonds between the Chinese and U.S. toy industries stay healthy while we all work our way through this global emergency.

- Posted by Richard Gottlieb - Global Toy News

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Global Toy Expert

Richard Gottlieb, CEO
Global Toy Experts is a world-renowned consultancy and resource for toy industry insight and information. We provide cutting-edge analysis and strategies to domestic toy manufacturers as well as to international providers who are looking to raise their profile in the United States & the world. We provide a full range of services for inventors including licensing and manufacturing as well as providing M&A services for companies looking to acquire or be acquired in the toy space.

2020 Exhibitor Brands - Highlight

Aoduostar logo
Aole logo
瑞奇宝宝logo
Print
9A18 Ben & Hollys
9B17 COG
列印
怡高
9A17 Eric Carle
9C17 HABA
9C27 Henstenberg-Pikler
乐吉儿
宏溢logo
9C15 Hristehrou
汇乐玩具LOGO
简动logo
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卡游logo
9A30 KidsLicensing
9D21 Theo Klein
9B26 Learning KitD
9C17 Londji
9E11 Masterkidz
9C17 Moulin Roty
品果logo(品果青)
实丰文化 lgoo
9B16 shifu
9A27 Shing Hing
9A22 TakMay
9B18 Tolo
白边LOGO (1)
纸居LOGO
9A17 Sam & Partner
仿翼logo图标
木玩世家logo
双鹰logo高清
森宝山东舰 logo
beiens
Carl oscar
KM_logo_2
Licensz_logo
Seaway_logo
星辉互动娱乐股份有限公司Logo
樂美達logo_1
spuddies_logo
Fengcai
智多星_logo
zBduck
上品公司logo (1)
華創角色LOGO
NewDanny_colorful - Logo
Taitra logo
The british museum logo
themet-new-logo
Victoria-and-Albert-Museum-logo
tencent logo
列印
青文出版CI_藍
1-1協進會logo
巧虎 Logo
海底小縱隊 logo

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