Five Guesses for Toy Market 2013

A new year has become but the market is still clouded by the Euro zone debt crisis. That posts a few questions upon us. We are trying to find out answers. With full of uncertainties, however, the "answers" might be called "guesses" more properly.

Guess 1: Global toy market is likely to revive?

     For export-oriented toy companies in China, 2012 was undoubtedly a tough year. Even some think it tougher than 2008 when the global economic crisis broke out. According to a report submitted by Guangdong Toy Association, which is based on China's largest toy production base, Guangdong Province, a large number of toy manufacturers suffered a sharp drop in overseas orders by 25%.

     You might be confused why are export value released by the customs last year enjoyed a year-on-year increase by 5.8%, which looks not bad. The reason lies in higher unit price. For the first three quarters of 2012, the export volumn from Guangdong to Europe and United States went down dramatically by 29.38% and 14.4%. The situation will be better in 2013 for the following two reasons. One is that traders need to stock up after the sales reach the trough. And the other is U.S and Europe economy is believed to revive, which will promote toy sales. Mr. Benjamin Chau Kai-Leung, the Deputy Executive Director of the Hong Kong Trade Development Council (HKTDC), made a positive prediction that Hong Kong toy export value will go up 4% this year.

     As what discussed above, we can reach a conclusion that 2013 will be a better year for export-oriented toy companies.

Guess 2: Which country or region shows more potential?

     Russia? Or Association of Southeast Asian Nations (ASAN)? Well, with good grounds. As a new member of WTO, Russia will gradually lift up trade barriers for imported commodities, which are helpful for China's toys entering Russian market. Russia has factors to boost toy sales, including stable political state, well-developed economy, large population and good financial well-being. And recently, ASAN's trading with China keeps going up and it is believed to continue. Judged from export statistics, however, South Korea shows the most potential as an emerging market. In the first three quarters of 2012, Guangdong's toy export to South Korea has reached 230 million USD, 83% up from last year, the No.1 growth compared with other countries or regions. If we broaden our horizons, the following countries show great potential as well: United Arab Emirates, Brazil, Australia, Egypt and South Africa, all of which rank high on the export list of China export.

     The biggest two markets, however, are still Europe and U.S. By the third quarter of 2012, Guangdong's toy export value to Europe and U.S. has reached 220 million USD and 230 million USD respectively. Therefore, exploiting Europe and U.S. market by toys in need is the first choice for toy suppliers.

Guess 3: Which kind of toys will be sold better?

From sales in Christmas 2012, iPad for kids is the winner. European and American media reported that what the most wanted Christmas gift by wide range of kids, even three-year-old, is an iPad. But it is surprising that the best-selling products of global toy giant Mattel in Christmas is not iPads either the high-expected Furby, but cell phone sheaths. The unexpected outcome, in a way, reflects a big push of hi-tech products in toy market. The exiting state may continues this year and probably spread to China. It will be profitable, undoubtedly, for China's toy companies to exploit such a new sector.

     In spite of electronic toys as a new favorite of customers, it is a joy that traditional ones such as Barbie dolls and LEGO toy bricks stay popular among kids. The two still hold a firm position on the best-selling Christmas toy lists in Europe and U.S. After digging into statistics and best-selling lists, we can find toys that help kids learn while playing and develop their hands-on skills far more poplar than others. From January to November in 2012, "construction toys and accessories" enjoyed a rise both in unit price and volume, 228% up in quantity from last year, making it No.1 in exported toys. Educatonal toys performed well, too. Its export volume increased by 26.4% year on year, standing out of 20 exported categories, half of which went down.

     One more thing to notice: there is always a downturn the year after a sharp rise in export. Maybe the market need some time to digest.