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Children's toy raw materials are rising, where is the development direction of the toy industry

by:Toysmax     2021-06-15

Some toy manufacturers are optimistic and believe that making toys is no longer a simple toy, but quality, fun and service. The survival of the fittest will also bring about a further reshuffle of the toy industry behind the competition, and manufacturers with low added value and poor risk resistance will be eliminated.

The farthest distance in the world is not between life and death, but when you slashed prices on Double Eleven, and turned around and issued a price increase statement-'The company has decided to start from December. The product will be increased by 8% on the original basis, and the price of the products shipped in November will be the original price.” This notice from a toy factory in Shantou also revealed the reason for the price increase. 15%, 15% for plastic blister, 15% for color box, and price increases for hardware, transportation, motors, and electrical panels to varying degrees.

The increase in the price of raw materials has a wide impact on the toy industry. Take rubber and plastic, the main material of toys, as an example. According to the price monitoring of the business agency, the price of bulk commodities in October 2016 There are 20 kinds of commodities in the rubber and plastics sector that have risen month-on-month in the ups and downs, of which 13 kinds of commodities have risen by more than 5%, accounting for 59.1% of the monitored commodities in this sector. Among them, the commonly used toy materials PS, ABS, PC, and PP increased by 8.23%, 27.22%, 15.46%, and 18.76% respectively year-on-year.

October 2016 rubber and plastic bulk commodity price rise and fall list (source: business club)

In addition to the rise in raw materials, the new version of Since the implementation of the “Provisions on the Administration of Transportation Vehicles on Highways” and the “Special Action Plan for the Treatment of Illegal and Overloading Behaviors of Highway Trucks” on September 21, they have also brought an increase in logistics costs to the toy industry. It is understood that the revised penalty standard stipulates that every time a vehicle is found to be overloaded, the vehicle shall be subject to 'one overtaking and four penalties' (the owner, the driver, the freight company, and the loading company or place). The maximum fine for 1 ton is 500 yuan, which is several times higher than the original standard. Due to the increase in illegal costs, drivers dare not continue to be overloaded.

Pictures of trucks (pictures are from the Internet)

The strictest control over super order (pictures are from the Internet)

In recent years, the profit level of the domestic toy industry has shown a downward trend due to factors such as the appreciation of the renminbi, rising employee wages and raw material prices, and rising export thresholds. If there is no increase in prices and internal digestion, companies will not be able to bear the pressure of costs, and the increase is worried about scaring off dealers and consumers. Dare to raise prices, do not want to raise prices but have to raise prices to cope with rising costs, some toy manufacturers have no choice but to 'be raised' to protect themselves.

The production workshop of a toy factory in Guangdong (Photo of Sino-foreign Toys.com)

There are also toy manufacturers who are optimistic about this, thinking that making toys is no longer Simply make toys, but make quality, fun and service. The survival of the fittest will also bring about a further reshuffle of the toy industry behind the competition. Manufacturers with low added value and poor risk resistance will be eliminated.

In the current domestic market, toys are still non-essential products. Industry insiders suggest that toy manufacturers should gradually adjust their business ideas, transition from a 'price war' to a 'brand warBuilding independent brands, increasing the added value of products, realizing product differentiation, and giving full play to brand effects are a powerful guarantee for toy companies to improve their competitiveness.

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