China's toy industry has huge market potential, five major trends, leading the development trend

Analysis of the development trend of China's toy industry

In the past year, the development of Chinese toys has been good. In 2017, the export of toys was US$44.15 billion, a year-on-year increase of 31.2%, setting the largest increase in the decade since the outbreak of the world financial crisis. The growth of the Chinese toy market is equally optimistic. At present, China is the second largest consumer of toys in the world after the United States, accounting for nearly 10% of the global toy consumption. According to the data of all parties, the overall consumption of China's toy market in 2017 was 68 billion yuan, up 4.6% year-on-year, and the per capita consumption of children was about 295 yuan.

The growth of the Chinese toy market is based on three major drivers:

1. The Chinese economy has maintained rapid development in decades and is already the second largest economy in the world. In 2017, the per capita GDP reached 9481.2 US dollars, and the gap with developed countries has further narrowed.

2. The people's living standards are constantly improving and consumption upgrades are obvious. The level and quality of consumption are constantly improving.

3. The change of parenting concept of the younger generation of Chinese “post-80s” and “post-90s” parents has a better understanding of the auxiliary role of toys in children's growth.

According to the forecast of the Prospective Industry Research Institute and the consumption of video games, in 2021, China may even surpass the United States to become the world's largest toy and video game market.

The toy industry exports a huge scale

According to the statistics released by the Foresight Industry Research Institute, the Toys Manufacturing Industry's Production and Sales Demand and Investment Forecast Analysis Report shows that China's toy export performance reached its peak again in 2017. The annual toy export volume was US$44.15 billion, up 31.2% year-on-year. More than 70% of the products sold in the world toy market are made in China, and the European and American markets are more than 80%. From May to September 2018, the export value of Chinese toys increased for four consecutive months. In October 2018, the export value of Chinese toys continued to grow. In October 2018, the export value of Chinese toys was US$3056.1 million, a year-on-year increase of 31.6%.

Statistics and growth of China's toy exports from January to October 2018

Source: Prospective Industry Research Institute

The toy agglomeration industry has a significant concentration effect

The end consumer groups of domestic toys mainly face children aged 0-12. On the one hand, with the transition from family planning to policy adjustment to comprehensive second child, the policy side gradually liberalizes the birth policy; on the other hand, it is the third time. In the echo period of baby boomers, the population born in the last round of population peaks is at an age suitable for childbirth. It is expected that a new round of population peaks will be brought about by the double force. The industries related to newborns and young children will benefit first, toys. The industry is expected to carry a demographic dividend to increase the end consumer population. The domestic toy exports are mainly concentrated in the five provinces and cities of Guangdong, Zhejiang, Jiangsu, Shanghai and Fujian. Among them, Guangdong's exports account for 67.39%, which is the province with the largest domestic toy exports.

The toy agglomeration industry has a significant concentration effect

Source: Prospective Industry Research Institute

Incremental newborns drive toy consumption growth

From January 1, 2016, the “Comprehensive Two-Child” policy was officially implemented. According to the National Bureau of Statistics, the number of new-born babies in the country in 2017 was 17.23 million, and the birth rate was 12.43‰. In 2016, the number of new-born babies was 17.86 million. Although the population is decreasing compared with 2016, the overall population is growing, so it is still on the rise. With the increasing number of births, the consumption of the toy industry is also rising.

Statistics on births and birth rates in China, 2013-2017

Source: Prospective Industry Research Institute

Chinese toy trend prospects

1. Science and technology innovation drives toy intelligence. At present, artificial intelligence (AI) is in a good development environment, whether from national policy, public cognition or practical application.

From a policy perspective, China has vigorously supported the development of artificial intelligence. In July last year, the State Council issued the "New Generation Artificial Intelligence Strategic Plan", stating that by 2030, China will become the world's major artificial intelligence innovation center, and the artificial intelligence core industry will exceed 1 trillion yuan, driving the related industries to exceed 10 trillion yuan. . In this year's "two sessions" and "government work report", we saw "artificial intelligence" written in the report. "People's Daily" interprets the top ten golden opportunities revealed by the government work report, ranking artificial intelligence first.

In recent years, technological innovation has emerged in an endless stream. “Black Technology” has helped the toy industry to improve and foster huge business opportunities. Toys tend to be intelligent and are one of the development trends.

2, the toy access immersive entertainment experience

The wave of AR (Augmented Reality) toys has been sweeping for two years, but it is still hot. The 2016 AR Grab Game Pokemon Go is one of the industry's iconic events, which immediately led to the AR toy boom, from static picture books to dynamic games, covering almost all traditional toy categories. The gameplay also moves from simple dialogue to the screen for human-computer interaction and multiplayer real-time competition. After entering 2017, we found that more and more technology companies and even Internet giants are laying heavily on the AR field: Apple (ARKit), Google (ARcore), Facebook (Camera Effects), Baidu "degree", Alibaba "Ali Fire Eye" Tencent "QAR" and so on. These high-quality AR technology development platforms are bound to further reduce the technical entry barriers for AR toys and attract more toy companies to enter.

As new technologies of virtual and reality continue to emerge and the technology threshold continues to decrease, the relationship between toys and immersive entertainment experiences will become closer.

3, baby toys highlight individualized training

In 2017, a total of 8.83 million two children were born in China, surpassing one child, accounting for 51.2% of the total birth population. At the same time, relevant surveys show that the consumption of toys for the second child is higher than that of the parent of a child, but the consumption of durable goods such as baby carriages and cribs is declining.

Overall, the current “post-80s” and “post-90s” new generation parents are the main players in the field of infant and child consumption in China. They are generally highly educated and have outstanding personalities. In the process of parenting, they are more inclined to individualized training. Reflected in the requirements for maternal and child products, first, the classification of products; second, the product is highly targeted; third, the safety requirements are higher. A survey conducted by the HKTDC showed that the primary consideration for parents when purchasing baby toys was "no harmful chemicals (57%). 90% of the respondents hope that toys can be entertaining and entertaining. To lay the foundation for the child's future quality training and study.

In addition, the new generation of parents are more concerned about the child's emotional needs, but also more willing to spend time interacting with the child. Therefore, the development of products for children's language, art, sports, creativity and other quality education is bullish. The fire of STEAM toys that fired last year will continue, expand, and extend to the younger population.

Another phenomenon is worth noting, that is, the decision-making structure in household consumption has changed. Although mom is still dominant in consumer decision-making, the willingness of dads to participate has begun to increase, and dads are more inclined to high-end consumption.

4, handheld entertainment gives traditional toys a new profit point

Nowadays, entertainment fragmentation and palmization have become the norm. Short-term video, mobile games, small programs and other mobile entertainment trends have impacted the traditional toy market to a certain extent, but also brought new profit points to the toy industry.

The catching doll machine has been ignited in recent years, which has obviously pushed the demand for plush toys, which has made the sales of plush toys normal, and improved the problem that the sales of such products are greatly affected by the season.

The short video products with strong social attributes also have a lot of parent-child interactive toys. At present, the most popular short video app "shake" has only been launched in the market for more than half a year. The number of users has exceeded 100 million, and the daily broadcast video has exceeded 1 billion. The growth rate is very amazing. A variety of novel and fun parent-child interactive toys are widely known through "shocking" short videos and are popular on e-commerce platforms. Many merchants have slogan "shaking the same paragraph" to attract consumers.

5, "Datong" group rises to promote the tide of playing culture

The “big boy” we define refers to a group that does not change its mind and has a childlike heart. It is not completely linked to the actual age. It is very common for adults to buy toys for themselves. Among the people who buy toys for themselves in the United States, millennials (18-34 years old) account for 50%; X generation (35-54 years old) accounts for 33.33%; baby boomers (>55) Years old) accounted for 18%.

This phenomenon has also become increasingly popular in China. Now the younger generation in China has several characteristics:

First, many young people are delayed in marriage and marriage and spend more generously for themselves. More and more people are playing high-end RC airplanes and car models. According to customs statistics, “the other model components of the smaller (scaled down) model” increased by 49.84% in 2017, and the amount increased by 95.56%. According to our understanding, some domestic old-fashioned remote-controlled toy manufacturers have begun to target adult groups and develop high-end product lines.

Second, the current young people's pursuit of spirituality is generally high, and the inner pressure brought about by the fast-paced life needs to be released. This provides a market for a variety of high-end toys and decompression toys. Last year, the fingertip gyro was popular, this is a typical decompression toy.

Thirdly, watching the cartoons grow up after the "80s" and "90s", influenced by the animation culture, the valuable cartoon characters, dolls, etc. are not soft. Stars are also the promoters of the trend culture, including Fan Bingbing, Lin Zhiling, Guo Biting, etc., who have publicly sun-dried dolls on Weibo, and vigorously promote the trend toy culture.

China's toy market has great potential and unlimited business opportunities. It is hoped that the Chinese and foreign toy media center will sort out and predict the domestic toy trend in 2018, which will help industry friends to understand the market opportunities and grasp the industrial opportunities.

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