In 2013, the Chinese toy industry is set to generate revenues of $29.21 billion, up 8.5% for the year, and reflecting annualised growth of 10% over the past five years.
Taking the advantage of raw materials and labour cost, China has become the world's largest manufacturer and exporter of toys.
As Chinese household incomes increase and families choose to spend more on their children, domestic demand has been increasing 16.8% annually over the five years through 2013 to total $17.10 billion
The growth in disposable income driven by the promising economy in China is expected to play a crucial role in the development of the Chinese toy industry, especially in rural areas which have historically displayed much lower spending on toys but have a higher proportion of children compared to the demographic seen in large cities.
Continuous urbanisation over the next five years could help companies reach these consumers as they are merging into powerful consumption groups.
The export market of China's toys shows the characteristics of focusing on OEM (original equipment manufacturer), low proportion of high creative products, excessive concentration of export markets and the added-profit reduction of export cost.
The Chinese toy industry is made up of a large number of small and medium-scale participants, with no one firm dominating the industry. However, major companies have successfully increased market shares in recent years.
The industry is subject to a low but increasing concentration level. Enterprises with annual revenue exceeding $12.5 million only account for about 2% of total enterprise numbers. The four largest players are expected to account for a combined market share of 10.2% of industry revenue in 2013.
Although more and more international brands are entering China, local brands such as Tencent in video games and Guangdong Alpha in toys still played the leading role in toys and games in 2012. Higher barriers in foreign markets such as the stricter quality inspection force more local companies to turn to the domestic market for higher sales.
For more information on the Chinese toy industry, see the latest research: Toy Market Research
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