New

Most people know China as the worldҳ largest toy exporter due to its solid manufacturing reputation especially in the southeastern provinces. Indeed, in 2020 China exported $72 billion USD worth of toy products, miles ahead of the 2nd place ֠Germanyҳ $6 billion USD. However, China also has the worldҳ largest toys market, valued at $48.3 Billion USD as of 2020 and significantly greater than the USҳ $25.5 Billion USD. Chinaҳ toy market structure Chinaҳ toys market is expected to reach $61.3 billion USD by 2026 with an annual growth rate of 4%. The segments included in this figure include dolls and stuffed toys, construction sets and models, cards games, puzzles, toys for toddlers and kids, and more. Dolls and stuffed toys account for a quarter of the market, which reached $11 billion USD in 2021. Source: Zhihu, designed by daxue consulting. The value chain of Chinaҳ toys market While Chinese companies do excel at manufacturing and assembly, the most profitable businesses are actually at the top end and bottom end of the value chain. The retail gross margin is around 50% and 80% of cartoon and animation Intellectual Property (IP) in China is foreign characters. In terms of brands, the top ranking toy brands in China according to sales and consumer ratings are usually foreign, such as Lego, Disney, Hasbro, and Mattel. On the other hand, notable Chinese toy brands include Meitoku, Auldey, and Silverlit. In 2022, we observe 3 trends that foreign companies who are interested in the Chinaҳ toys market should look into. Emerging trends in Chinaҳ toys market To understand the most popular toys in China, we can start off by looking at JDҳ 2021 report on ӣhaowanԠ(or literally Ӧashionable toysԩ. Before we start, we have to first understand what is ӣhaowanԠin the Chinese context as it means beyond just fashionable toys. ӃhaowanԠis a kind of toy that combines multiple elements such as sculpture, anime, and design. It comes with strong, identifiable IP and usually commands some level of premium pricing. Prices range from 40 RMB to over 10,000 RMB depending on the complexity of the toy, i.e. how flexible the joints are. However, it is important to remember that functional complexity are Ӯice-to-havesԬ and the bulk of the value is derived from the Intellectual Property, which is aimed to resonate emotionally with users. Source: Sohu, The top toys sold on JD It is clear that finding and leveraging effective IP is the key in winning this market. Ultraman, Transformers, and other anime characters are popular IPs on this list. The buyers of these fashionable toys consist mostly of Gen Z, or people born between 1995 and 2009. Gen Z accounts for 38% of the buyers. They buy these toys primarily for social and self-actualization needs, and they are willing to pay for anything (including IP) that helps them define their own identity. Intelligent high-tech toys trend There is no doubt that intelligent high-tech toys have been an area of high growth. The segment grew from 300 million RMB in 2014 to 12 billion RMB in 2020 in China. But before any company jumps into this market and makes high-tech their strategic objective, it is important to understand why high-tech toys are trending and what the implications are. One key factor driving this trend is that Chinese toy manufacturersҠattempt to increase their profitability by increasing the complexity and value-added during the manufacturing process. This stems from the fact that toy manufacturers have struggled to capture the profit in both the upstream (i.e. intellectual properties) and downstream (i.e. retail). The major consumers of intelligent toys have been children ageing from 0 to 14 as intelligent toys can also serve as educational tools. In China, the number of children between 0 to 14 has hovered at around 230 million, with about a 0.2% decrease every year. New policies so far have had little impact on raising this number. In contrast, other segments such as stuffed toys cover a wider or different age range. Lastly, in terms of distribution, intelligent toys have traditionally been sold offline as consumers need to touch and feel the functional capabilities of such toys to appreciate their performance. As a result, it makes online retailing less desirable. As a result, whether foreign toy brands should pursue this market need to assess the market fit with their strategies. Chinese toy consumers: once the only child, forever the toy lovers The major consumers in Chinaҳ toys market in 2022 are Millennial parents who were born in the 80s and 90s. These generations are the ѯnly-childҠgenerations as China implemented the one-child policy from 1980 to 2015. At first, many people were curious or worried whether these generations would make good parents due to the negative stereotypes associated with being the only child: spoiled, selfish, or Ӭittle emperorsԮ It turns out that the ӯnly childԠgenerations are indeed different, and in some ways better than the previous generations when it comes to parenting. According a research by The Chinese Academy of Social Sciences, about 30% of 90s parents play with their children more than 3 hours per day, compared to 24% for 80s parents and 12% for 70s parents. Why are Chinese parents becoming more willing to play with kids? Parents believe that playing together is a form of education, not of traditional STEM knowledge but rather soft skills such as working together, making decisions together, developing artistic sense, and bonding emotionally. Another key reason is that Millennial parents use playtime with kids as a means of destressing themselves and having fun. 97% of the parents expressed that fun time is very important to them. How to address the play-needs of Millennial parents The implication is that brands operating in Chinaҳ toys market need to take the play-needs of Millennial parents into consideration, as 52% of parents even went as far to say that Ѣuying toys for their kidsҠwas just an excuse for buying toys for themselves. We at Daxue Consulting believe that there are 2 key aspects that brands have to get right. First, select the right Intellectual Property to be attached to the toys. 88% of the parents stated that toys need to reflect the values of the parents in order to be purchased for their kids, and often the values and symbolisms are embodied by the IPs. Millennials love cartoon characters themselves, with 65% of the parents being purchasers of toys that have some kind of intellectual property attached to them. Source: Zhihu. A memberҳ post on good toys Second, build interactivity and creativity into the play scenarios of the toys. Since parents like to play together with their kids, there must be opportunities for both parties to contribute and the level of challenge needs to be balanced. For example, Lego projects and puzzles present challenges to adults and kids alike. Adults might not necessarily do better than kids when it comes to making decisions related to the project, and this leaves room for a lot of interaction as parents and kids need to cooperate. Another example would be roleplay toys. Children naturally like to roleplay with others including adults, and they can come up with limitless roleplay scenarios even using very simple props. This article Chinaҳ Toys Market in 2022: Chaowan, high-tech, and parent-child games is the first one to appear on Daxue Consulting - Market Research China. -------------------------------------- By: Daxue_Writing Title: Chinaҳ Toys Market in 2022: Chaowan, high-tech, and parent-child games Sourced From: daxueconsulting.com/new-trends-on-chinas-toys-market/ Published Date: Mon, 07 Feb 2022 08:14:18 +0000 Read More Did you miss our previous article... https://bd.business/market-research/your-businesss-direction-chart-how-emotions-and-values-can-help