Players show stronger confidence over quick-recovering market demand

The toy and gift industry is expected to witness a quick rebound following the optimization of COVID-19 control measures, as domestic and overseas buyers and manufacturers exhibited a positive approach in terms of business growth during an expo in Shantou, Guangdong province.

Intended purchase agreements during the 22nd China Shantou (Chenghai) Toys and Gifts Expo, which concluded on Monday in Chenghai district of Shantou, a major toy and gift manufacturing base, reached 10.8 billion yuan ($1.57 billion), a historical record for the event, according to the expo's organizers.

Dubbed China's "toy and gift capital", Chenghai, located in the eastern coastal area of Guangdong, is home to over 50,000 toy companies, with exports of toys and gifts growing 33 percent year-on-year to 14 billion yuan in 2022.

Sully Sullivan, director of Hangzhou Zekesi Trading Co Ltd, said there will be a quick rebound of the toy and gift industry in the United States, after three years of the COVID-19 pandemic.

"This year may not be the best year for toy businesses, but it is for sure that the industry will grow steadily in the future. We believe the global toy market will be even better next year," he said.

Sullivan was one of more than 9,000 overseas and domestic professional representatives to sign purchasing contracts with local toy and gift manufacturers during the expo, which had an exhibition area of 50,000 square meters with more than 180,000 toy and gift products.

In addition to the intended purchase agreements that were signed during the event's opening ceremony, the estimated transaction amount during the exhibition reached 3 billion yuan, with 1,238 overseas buyers, according to the organizers.

Tu Taoying, sales director of distribution channels for Sembo Block, a Chenghai-based company specializing in designing and producing high-quality building blocks, said sales of toys began to increase in December following changes to the COVID-19 policy.

"Sales of toys increased sharply, especially during the Spring Festival holiday, usually a sales peak time in the domestic market — many toy shelves in shopping malls were almost out of stock," he said.

Tu said another sales boom will appear in the following months. "We have cooperated with many owners of big movie intellectual properties such as The Wandering Earth to design and produce more competitive blocks," he said.

Tu said the overseas market would be a new growth engine for the company's business in the future. "We plan to increase the proportion of exports to about 10 percent of our total sales this year," he said.

Russia will be a big potential market for the company's exports of its blocks using the IP of The Wandering Earth, Tu said.

"We will also ship more self-developed flower toys to European and North American markets, which have developed increasing demand for such products on online sales platforms such as Amazon," he said.

To facilitate the development of building blocks, the local authorities have planned to build a toy paradise project in Chenghai, to display the district's transformation from traditional toy manufacturing to the high-quality and smart development of the industry.

Liu Weihe, sales manager of Yuxin Science and Education Toys Co Ltd, also said sales of toys are expected to increase significantly both in the domestic and international markets this year.

"After decades of development, toys made in Chenghai are of better quality and more diverse — domestic and overseas buyers will have more choices in the selection of local toys," he said.

Following changes to the COVID-19 policy, the toy industry will grow both in production and sales as demand for high-quality products is expected to increase, Liu said.

"Toys will be more finely differentiated and positioned in more diverse ways," he added.

Citing the toy industry's market position mainly targeting children in the past, Liu said the company would design and develop more toys for people aged above 15 in the future.

Toy and gift makers in Chenghai were also encouraged to expand their presence in the Guangdong-Hong Kong-Macao Greater Bay Area by investing more in design and trade services in Guangzhou and Shenzhen, two important toy manufacturing regions.

"While focusing on production locally, makers based in Chenghai should cooperate in design and trade services with their counterparts in the Greater Bay Area," said Lin Weibin, director of the Guangzhou Toys and Gifts Industry Association.

The toy industry in Shenzhen and Guangzhou has developed advantages in its industrial chain, especially in design, trade and supplies of electronic components, Lin said.

Wen Zhanbin, Party secretary of Shantou, said the city will make more efforts to build the toy and gift industry into an industrial cluster worth 100 billion yuan.

The China Toy & Juvenile Products Association signed a strategic cooperation agreement with the local government during the expo to cultivate a group of specialized and sophisticated enterprises in the future. The local government also signed an agreement with technology giant Baidu Inc to promote intelligent manufacturing in the toy and gift industry.

The city will also introduce a series of incentive policies to improve the innovation and incubation chain of the toy and gift industry and promote new business forms and models such as cross-border e-commerce and supply chain services.

Dong Anqi contributed to this story.