China is the world’s largest toy exporter, but most of them have strong competitiveness in the low-end markets at home and abroad, and the high-end toy market is still dominated by foreign brands. In recent years, my country’s toy companies have accelerated their integration with the animation and online game industries, and have incorporated new technologies such as artificial intelligence. A number of large-scale companies and brands have emerged, and they have begun to compete with “foreign brands” such as Lego, Fisher and Disney.
So, what is the current development trend of my country’s toy industry? What are the problems?
The latest development trend of the toy industry is the integration of toys, animation and online game industries, and the integration of artificial intelligence technology. Rising costs have led to compression of traditional toy manufacturing profit margins, and the industry seeks new sources of added value. The combination of toys, animation and online game industries can inject cultural connotations into toys and significantly increase the added value of toy products.
At the same time, the current domestic mature toy industry chain also provides a platform for the actualization of domestic animation images. The development model of “animation + toys” is quite mature in China. Toy companies set foot in the animation and online game industries through a variety of channels, developing their own images of animation and online games, seeking authorization for existing images, and acquiring ready-made animation and online game companies.
The blessing of artificial intelligence technology on toy products has also given birth to many new ways of playing. High-tech products such as programming robots and virtual pets have everything. The application of high-tech in manufacturing will be the focus of R&D and innovation for toy manufacturing enterprises, as well as the future development trend of toy products. For China, smart toys have a huge market for three reasons: one is the advantage of China’s toy manufacturing industry, the other is the advantage of the Chinese population, and the third is that artificial intelligence has ushered in a harvest period.
In 2018, although there were no phenomenon-level “explosive” toy products in the Chinese market, the derivative series of popular IP toys such as “Little Pig Peppa” and “Super Flying Man”, as well as DIY handmade, intelligent early education, and plastic building blocks All toy products have a good market.
According to the statistics of the “China Toy Manufacturing Industry Production and Sales Demand and Investment Forecast Analysis Report” released by the Qianzhan Industry Research Institute, the retail sales of China’s toy market in 2017 was 11.027 billion U.S. dollars, an increase of 5.61% year-on-year. China’s toy industry has improved in 2017. Big development, the biggest bright spot is that the export value of products hit the biggest increase in 10 years since the 2007 world economic crisis. In 2017, the global toy market retail sales were 94.452 billion U.S. dollars, and China’s toy retail sales accounted for 11.67% of the world’s total, maintaining the world’s number one toy market retail share.
In addition to strengthening independent innovation, the transformation and upgrading of the toy industry are also inseparable from international support, making “foreign toys” a booster for optimizing my country’s toy industry chain.
Upgrading the retail model is crucial to the overall optimization of the toy industry chain. At present, the more creative and effective model is ‘experiential retail’, that is, by paying attention to consumers’ emotional appeals, giving toys emotions, and returning to the starting point of consumers choosing toys—seeking happiness.
The proactive “offensive” of foreign toy brands will undoubtedly stimulate domestic brands to continue to innovate in product iterations and consumption patterns. With the continuous improvement of the industrial chain and the standardization of the market, the concentration of my country’s toy industry, the quality of domestic toys and brand awareness are expected to improve.
First of all, with the continuous improvement of domestic and foreign toy safety and environmental protection standards, the requirements for raw materials and production processes are getting higher and higher, and toy manufacturers that do not meet the requirements will be rectified or even eliminated.
Second, rising labor costs and increased testing costs will eliminate some companies with smaller profit margins.
Finally, as domestic consumers’ brand awareness becomes increasingly mature, leading companies with advantages in brands and channels will benefit and their market share will continue to increase.