BIG Toy Market

Jan 10, 2013

BIG Toy Market

There is a popular saying that goes ‘a toy is a child's first friend’. With global toy sales in 2011 reaching US$83.3 billion, according to the NDP Group, a toy is no longer just a child’s friend, but a golden partner for companies involved in the business.

Over 70% of all toys produced are manufactured in China. But the irony is that Chinese on average spend US$13 on toys per capita, far below the spending of US $144 and US$340 in Europe and the US respectively, according to industry data.

The really BIG market

Considering that there are around 220 million children under the age of 14 in China, accounting for 17% of the total population of this giant country, and that China’s economy is on its way up compared with the struggling European and US markets, the toy market in China ought to be an insatiable wonderland for toy businesses to exploit.

China’s One Child Policy has also been a significant factor in boosting the toy market. Chinese children are raised these days with the exclusive attention of not only their parents, but also their grandparents, hence the so-called ‘6-to-1 phenomenon’. Then there are the child’s other relatives and grown-up friends. An only child in today’s Chinese family is often referred to as ‘A Little Emperor’, always able to get what is desired.

This being so, the nation's toy market is expected to double to US$9.4 billion by 2015 from 2010, according to the China Toy & Juvenile Products Association.

So here we have a question: What are the consumers in this new market looking for?

What Chinese toy purchasers really want?

As with other consumer goods for children, although the toys are consumed exclusively by the children, it is their parents who are the major decision-makers and purchasers. But one should note that although children do not make the purchase decision, most parents will often listen to the views of their children, especially if the children are under seven years old, because buying toys for kids is simply one of the main ways of expressing love and care. Therefore, more cheerful toys will cater to parents’ thinking as regards the wants and needs of the under-sevens.

As well as providing fun entertainment, toys also offer children a different dimension in the learning experience. To help them develop, grow and learn, it is important to provide them with learning toys that best meet these developmental needs. For example, children sometimes play a ‘trafficpoliceman’ role in their game, with baton in hand carefully directing vehicles and pedestrians. Sometimes kids like to play ‘doctor’ and cure the patient. Or sometimes they play with plastic blocks for building high-rises, as if they were great architects. Regardless of what role children play, a game with toys is an important way of imitating the actions and language of parents and grown-ups, and encourages them to learn from people around them, preparing them for their future lives as adults.

Chinese parents tend to focus particularly on the intellectual development of their children, because when their kids grow up they will find that competition is extremely keen in high schools and universities. Studies also indicate that toys are often used by Chinese parents at this stage as rewards for learning achievement and good behavior. Chinese parents are often willing to pay much more for a toy with an educational function than just a pretty doll. Electronic toys are in big demand because they provide more interactive ways of enhancing children’s knowledge. Some ‘traditional’ toys, such as bicycles and sports gear, are also highly regarded by parents because they strengthen the physical abilities of young growing bodies.

Generally speaking, most Chinese families are unable to keep a large number of toys at home because of limited space (flats are very expensive in the urban areas of China). Parents are thus attracted to toys that offer multiple functions and are well designed.

Cartoon characters are of course very popular among children. If a toy is associated with a TV or movie cartoon series, it will quickly set a trend and children will clamor to get it. One survey research finding showed that consumers in China’s first-tier cities have high awareness of toy brands, such as ‘Transformers’, ‘Barbie by Mattel’, and LEGO, and that over 80% of respondents were able to recall the 10 famous brands which occupy a more than 50% market share of domestic toy sales.

As a result of the higher educational level of Chinese parents, toys which integrate new technologies are their new ‘must have’. Wireless networking, electronics, biotechnology and voice-recognition technology are several of the most important technologies now capturing both parents’ attention and children’s hearts.

Safety is also crucial to Chinese parents when choosing toys. With one child only in a single family and high disposable income, protection from potentially harmful toys is top-of-mind for the little ‘Emperor’ or ‘Empress’.

And toy purchasers buy from …

China is geographically very large, and having access to the ideal point of sales is essential to winning over the consumer. A survey by China Toys & Juvenile Products Association revealed that department stores remain the major sales channel for toys. In 2010, 30% of the nation’s department stores had toy sales of between US$157,000 and US$470,000, with 10% having toy sales exceeding US$1.5 million per store.

The same survey also indicated that franchising is becoming more popular. Toys”R”Us has targeted the middle-income group and is currently operating 17 ‘Main’ stores, eight ‘Express’ stores and four ‘Toy Boxes’ across China. When the store first landed in Shanghai in 2006, its practice of free trials by customers was very new but was quickly embraced by local consumers. This sales model caused a new wave in the domestic market, and more franchise stores are now being built in China.

Online purchase of toys has also become more widespread in China. According to the same survey by China Toys & Juvenile Products Association, online sales took up over 10% of the total market in 2010. In an interview, a representative of ‘Barbie by Mattel’ in China noted that the removal of its flagship store in Shanghai was a strategic approach, in preparation for online market exploration. The company has been working with some well-known Chinese online platforms, such as and to grow their market reach and share. This initiative has proven to be a successful one, the company having received orders from as far afield as remote Urumqi, the capital of the northwestern Xinjiang Province.

Are your toy guns and rubber bullets ready to conquer this new market?



Select the language you would like to use:

This setting will be saved in your computer if you have cookie enabled.