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Toys sales better than expected

An industry survey on toys released today (January 14) indicates that 2005 will be a better year than 2004.

While the US and Western Europe will continue to be the industry's dual-growth engines, industry players are optimistic that emerging markets, including the Chinese mainland, Russia, Central & Eastern Europe and Southeast Asia will further fuel growth for the retailing of toys.

Oracle, an independent survey company commissioned by the Trade Development Council (TDC), interviewed a total of 725 exhibitors and 1,007 buyers attending the Hong Kong Toys and Games Fair this week.

68% of interviewed exhibitors and 70% of buyers expect the global toy market to be better or slightly better than 2004.

Buyers generally show greater demand for computer toys and games than suppliers expected, especially in Japan, Western Europe and North America.

Major findings of the survey are as follows:

Performance of Christmas Sales in 2004: over half of interviewed exhibitors (50%) and buyers (59%) said Christmas sales were better or similar to 2003.

Fastest-growing toy categories in 2005: battery-operated\electronic toys & games, followed by educational toys & games, and computer toys & games.

Baby toys: one-third of buyers are now sourcing baby toys. 72% of them plan to buy more in the next 12 months. They said their preferred retail price of toys In North America, Europe and Asia Pacific is US$23, US$18 and US$19 respectively. Toys for 2-4 year-olds top exhibitors' and buyers' growth potential list. Creativity, language/communication skills are desired features for parents.

Outdoor and sporting items: a quarter of interviewed buyers purchased outdoor and sporting items at the Fair. 78% of them said they would purchase more in the coming 12 months. Bicycles, scooters, skateboards, skates, camping & hiking equipment are hot items in 2005. In North America and Asia-Pacific, consumers age from 10 to 14 have the best growth potential. In Europe, consumers age from 5 to 9 also have good potential.

Licensed characters: both buyers and exhibitors expect Japan to have the largest share of toys and games with licensed characters. As in 2004, Disney characters, are again regarded as the most popular licensed characters. Movie characters such as Batman, Harry Porter, Spiderman and Mr. Incredible are also well received. The majority of industry players (over 60%) expect there will be increasing use of licensed characters in TV and computer games.

Average product life cycle: 6.6 months, in general, from the buyers' point of view. The Chinese mainland has the shortest cycle (4.6 months), followed by Japan (5.0 months). North America has the longest cycle (7.2 months).

Preferred places for new supply sources: over half of the buyers placed more orders, in terms of frequency and quantity. 63 % of buyers preferred Hong Kong/South China, followed by Shanghai and neighbouring regions (13%). In the previous survey last year, only 34% chose Hong Kong/South China as their preferred place for new supply sources.

Mainland market: In 2004, there were around 28% of exhibitors and 29% of buyers involved in sales activities in the mainland. In 2005, it will be 36% and 37% respectively. Over half of interviewed exhibitors and buyers said they would conduct sales in the mainland in the next three years.

Organised by the TDC, the Hong Kong Toys & Games Fair held from January 11 to 14 is the largest of its kind in Asia. The Fair this year attracted near to 1,900 exhibitors from 35 countries and regions, a 5.1% growth over last year.

Detailed survey findings: http://www.hktoyfair.com

TDC's report on 2004 Christmas Sales in Major Overseas Markets and Retail Outlook for 2005: http://www.tdctrade.com/econforum/tdc/tdc041203.htm

TDC's report on Hong Kong's Trade Outlook for 2005: http://www.tdctrade.com/econforum/tdc/tdc041202.htm

*****

For press enquiries, please contact TDC's Corporate and Media Communication Department at 25844333.

Remarks:
The Trade Development Council released an article in Chinese on China's toy market on Tuesday. This is an English summary of the article's key points:

  • The mainland will become a RMB100 bn toys market by 2010.
  • Parents in Beijing, Shanghai and Guangzhou spend RMB 100/month on average, to buy toys for their children. This is around 2.5% of these families' monthly income.
  • Mainland parents prefer education toys.
  • Hong Kong toys are regarded as better than mainland toys for design and safety.
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Content provided by Hong Kong Trade Development Council