China brand toys are thriving
The day before the 72nd Nuremberg Toy Fair in Germany, the organizers announced the winners of the six major awards of this year’s Toy Awards, with Chinese brands toys winning the preschool toy award.
It is reported that this year, a total of 338 global exhibitors selected 584 new products for evaluation. In the end,17 products were nominated as finalists, among which, three China Wholesale Toy Manufacturers, Aoguang, Yinhui and VTech, all had their products nominated, and finally, Aoguang’s brand topbright’s Gourmet Bear Balance won the Preschool Toy Award. Here’s a look at the full list of winners together.
China Wholesale Toy Manufacturer
Baby Toy Award
7 in 1 Space Activity Cube
China Wholesale Toy
EverEarth Europe. According to the jury, the design is pleasing to the eye, but the space station with rockets, planets and vehicles can stimulate the curiosity of babies, while developing fine motor skills and thinking skills.
Yummy Bear Scale
Ao Guang Animation (topbright) produces this product. The product uses the form of scales to visualize the abstract concept of number equation. The baby places different numbers on both sides of the scale, and only when both sides are equal in size can the balance be maintained. At the same time, there are colorful cupcakes to encourage children to play.
Mobi World produces. More than 80% of the product is made of environmentally friendly organic or recycled plastic, conveying the value of sustainability. The product comes with a QR code that can be downloaded to include interactive content and AR game programs.
Brand toys continues to increase its presence in China toys wholesale market
Recently Lego’s “90th anniversary” report card was released, and the Lego Group maintained double-digit growth. Niels B. Christiansen, CEO of the LEGO Group, called it a “milestone year” and “strong results show that LEGO is more valuable and attractive than ever before. “.
As the quote says, from the earnings data, LEGO’s growth is not based on raising prices (nearly 40% of products raised prices), but on a diversified product strategy, looking for growth in China markets other than children’s education, and making breakthroughs in high-price band toys products and consumer purchases. Although “all rely on the middle class to support” is biased, but LEGO’s desire to please the “big kids” has become clear.
We briefly review the LEGO Group’s 2022 financial results:
– Revenue increased by 17% to DKK 64.6 billion (approx. 42.067 billion), beating expectations.
– Operating profit grew by 5% to DKK 17.9 billion.
– Retail sales grew by 12%. Growth was achieved in all major global markets, with particular strength in the Americas and Western Europe.
Officials said the drivers of growth included strong demand for the company’s portfolio, online and in-store retailer partnerships, a strong e-commerce platformof China and a resilient global supply chain network. It is expected to continue to lead the market in 2023, with single-digit growth rates expected.
Subject to the negative impact of raw materials, supply chain logistics, inflationary pressures, combined with the global epidemic blockade, currency fluctuations, war in Ukraine and other macroeconomic and geopolitical challenges, LEGO has achieved quite a bright result under such pressure. But it is not all optimistic.
But this has not dampened the confidence of LEGO Raiders China. “80 new stores in China” store opening plan, new products with oriental cultural colors and many other actions, Lego blocks still stand firm in the market absolute position.
Play Generation has compiled statistics on the growth of LEGO in key global markets over the past five years:
– The Asia-Pacific market took off significantly in 2019, with a revenue growth rate of 22%, while the Americas, Europe and other markets grew by less than 5% during the same period.
– In the following two years, LEGO maintained a high growth rate of 17.69% and 26.09% in the Asia-Pacific market
– By 2022, Asia Pacific revenue exceeded 10 billion DKK (about 6.83 billion RMB), accounting for 16%. But the growth rate plummeted to 5.84%
This year’s results are yet to be seen, but there is no doubt that LEGO remains bullish on the potential of the China market.
Paul Huang, senior vice president and general manager of LEGO China, said in an interview: “In 2023, we will continue to expand our footprint in China” and “we expect to open another 80 new retail stores in China this year”.
That means more than half of the new stores will be located in China. Officials disclosed that the company plans to open another 145 new stores this year.
Lego has maintained a high pace of expansion in China. In the previous year (2021), LEGO opened 155 new brand stores worldwide, 95 of which were set up in China. The financial report disclosed that the total number of LEGO stores reached 904, including 185 stores of LEGO Group, 719 stores of LEGO Certified Retail Stores and LEGO Travel Retail Stores.
Paul Huang noted that currently, more than 40% of our stores are located in Tier 3 and below cities, where there is huge potential for growth.”
The short-term setback in the Asia-Pacific market has not affected the rhythm of LEGO’s strategic layout. From the front-end retail terminal network, to the back-end supply chain capacity, as well as market cultivation and development, is still in the whole consumer ecology continued to build layout stage.
In the past year, LEGO has strengthened its production capacity, including three factories in Niregaza, Hungary, Monterrey, Mexico and Jiaxing, China. Among them, Jiaxing factory provides 90% capacity support for the Asia-Pacific market. By opening factories near key markets, LEGO can be more flexible to meet the needs of regional markets and offset some of the transportation costs (including time costs).
LEGO has been trying to cultural diversity products, with cars, games, movies, technology and other companies in different fields have cooperation, but in pulling the scale still can not be separated from the super IP. financial report, LEGO’s royalties in the past five years doubled, 5.484 billion Danish kroner.
LEGO has also tried to introduce creative elements of Eastern culture such as “Journey to the West” and Chinese New Year. 2020, LEGO launched the “Wukong Little Warrior” series with “Journey to the West” as the creative point, and the Qi Tian Da Sheng golden mecha was quite eye-catching in the market, becoming one of the best-selling themes in China and Asia-Pacific. The subsequent release of the White Bone Spirit was the icing on the cake. However, most of the sets in the themed series had a mediocre response.
At the end of 2022, LEGO “money tree” and “New Year’s Eve flower” blocks were loved by local players as soon as they came online. The “money tree”, a product not exposed in the official public number, unexpectedly became popular. Some offline retail channels were out of stock for several times. And the same time the official promotion of the new “cute rabbit” and other sets encountered word-of-mouth “fire and ice”.
It can only be said that the super IP of the Western cultural system is still “distant” for Chinese consumers, and the exploration of local multicultural IP is still bumpy.
According to LEGO’s earnings report, revenue contribution from China and Asia Pacific hovers around 16 percent in 2022. Paul Huang noted that the growth in China sales is driven by the country’s population of more than 200 million people aged 0-14, economic growth and the growing purchasing power of the middle-class population.
Lego is opening more stores in China, but blending with the local innovation culture and getting closer to consumers remains key to its strategy.
Tide play brands open up a new track
Tide play, cards, the hot toy of wholesale from china with toy category in recent years. Among them, the tide play in a super strong state, various brands mixed war, making the toy’s category market competition pressure is extremely high; cards are the head of the brand occupies the majority of market share, other brands want to seize the share, difficult.
In such a market background, a product that can increase the tide play play, but also as a new track of cards was born – tide play card, also called tide play star card. The brand is also known as Hitcard, which is an innovation in the China’s card market and in the field of tide play.
Although all the major China brands are emphasizing that there is more than just the blind box, and keep launching other categories of tide games such as dawa, models, sculptures, etc., the blind box is still a category that occupies a large share of the tide game toys market in China, and is also a very competitive category.
For the brand, in addition to constantly launch a variety of thematic series of products to maintain the heat, make the blind box play more is also one of the ways to attract consumers. The emergence of the Tide Play Card meets this need.
Tide play cards add an extra layer of collection to the blind box, namely the star card play mentioned by the Tide brand. Take the Molinta Spring Project series in search of unicorns as an example. The series includes nine regular models and two hidden models, of which nine regular models have corresponding Tide Play cards, but these Tide Play cards are not distributed in each blind box.
According to the introduction, the probability of the appearance of the tide play card is based on the number of all production, and this series of products in the production of tide play card ration is 3: 108, that is, every 108 products produced in 3 tide play card. If there are tide play cards in the blind box, there will be no more role identity cards.
Information shows that the tide play card is only last year began to appear in the domestic market, and is bound to the tide play on sale, almost no separate sales of tide play card. China’s toys and foreign toys full media center reporter in various social media platforms to collect the sharing of netizens, most consumers on the tide play card awareness is not yet very strong, and few to get the tide play card and go to buy a blind box. It can be said that so far, tide play + card model in the consumer market has not yet attracted enough attention.
However, the capital market is more bullish on Hitcard. Information shows that Hitcard received millions of RMB angel round financing in December 2021 from Feng Tao and Fire Phoenix Capital; in 2022, it received a strategic investment of 10 million RMB from Bubble Mart, millions of USD A round financing from Sequoia Seed Fund, and financing from Thousand Islands-Tide Players, respectively.
To sum up, as a new model, the best effect achieved by Tide Play + Cards is that China’s Tide Play brands take this opportunity to enhance the blind box repurchase rate, and card companies take this opportunity to make a name for their brands. But the market is still in the early stages of development, whether this win-win effect can be achieved as expected, it depends on the future development of the model.
Cards become the new windfall of toys
Capital is concerned about the wind, the trend, choose to invest in the industry / category of high heat, high potential. Focus on the toy industry, in recent years, the hot categories are traditional toys blocks, cards, and trendy toys, and almost all of the toy industry financing events in the past three years by the higher degree of attention also occurred in these three categories.
blocks mainly, educational education has potential
In China’s toy market, fierce competition and extremely hot category is blocks, the category by the capital market attention is a natural thing.
Among the block brands that have received financing, Sambo blocks and Bruco belong to the head. Among them, Bruco is a domestic blocks in the early start of financing the brand. Information shows that since the beginning of the angel round of financing in 2018, Bruco has completed a total of six rounds of financing, the highest one is 600 million RMB B round of financing. And Sambo blocks is the beginning of last year to get A round of financing, the same amount of hundreds of millions of dollars, which shows the high degree of recognition of its investors.
The other three block brands that received financing were founded in 2020, belonging to the block field “new army”, but each brand has its own distinctive features and positioning. Punch blocks are positioned to be “collectible blocks for adults”; Unwanted blocks focus on immersive and playable blocks with a balance of design and playability; Qiaohe tenon and dovetail blocks create blocks with a mortise and tenon structure, fully highlighting traditional cultural features of China.
In addition to building blocks, the main educational toys, with strong R & D strength of the enterprise also received the attention of capital. 2017 was established in Best Childhood is committed to the concept of scientific parenting to consumers, to create products covering early childhood enlightenment, handicraft art, puzzles, STEAM, outdoor and other categories. 2018 March, Best Childhood’s products online Xiaomi Youpin, the first month achieved 2 million yuan of revenue. In June of the same year, the company received a 10 million yuan angel round of financing from Baidu co-founder Xu Yong.
Founded in 2012, Blue Zeus Technology is an innovative technology company with AI technology, with five business segments: Blue Zeus Electronics, Blue Zeus AI Robot, Blue Zeus Planet, Blue Zeus Planet STEAM Academy and Blue Zeus Education. In 2009 and 2020, we will be in the top three of Jingdong’s “Double 11” toy sales list for two consecutive years. Before the A round of financing, Blue Zeus Technology has raised two rounds of financing in 2018 and 2019.
For toy companies, financing funds are usually used for product development, channel layout, promotion and so on. For example, after the completion of the A round of financing, Bluecoat said that this round of financing will be mainly used to promote the brand upgrade of Bluecoat blocks and the continuous deepening and expansion of the market and channels; the digital content, B-end education, original animation creation and distribution and other related businesses under the group.
StarPony will also use the financing funds for talent recruitment, product development, brand building, etc.; Youbei stroller for product development and production technology iteration upgrade; Best Childhood’s Series A financing is mainly used for its own product development and new channel expansion such as Jitterbug e-commerce, as well as the layout of offline stores; and the financing funds for untouched blocks are used for product development and marketing.
If the investor has a relevant part in the business aspect with the financing company, the financing can also bring more support to the company. For example, Card Hobby’s financier Yao Ji Technology has professional card production technology experts, and its mastery of high-end card production technology and techniques can enhance Card Hobby’s production and R&D capabilities. In addition, Yaoji Technology has a rich sales system, which can improve Card Hobby’s channel layout.
Hitcard is a hip-hop card, which currently has to rely on hip-hop IP and blind boxes to enter the market. After the brand got the investment from Bubble Mart, it not only has the financial support, but also has an additional partner – Hitcard launched the tide play cards of Molly, DIMOO, SKULLPANDA and other IP of Bubble Mart, which further promoted the brand. In addition, the trading platform Thousand Islands-Tide Players invested in Hitcard, which helps the brand’s products to be sold separately in the future.
Social environment of chinese toys wholesale is safe and stable, and deliveries are guaranteed, so many brand companies with high quality requirements still prefer to hand over to Chinese companies for production. Such industrial advantages of China will not change in the next ten years. The current industry urgently needs to fill the short board, is the lack of world famous brands. Therefore, Shenzhen Toy Fair specially opened the “Chinese and foreign toy awards” award-winning products display area, fully support Chinese enterprises to innovate products, bigger brands.