I have received many requests for insights on my expectations for China’s toy industry sales performance in 2022. Before I provide my thoughts on what to expect this year, let’s first look at what happened in the industry last year. In 2021, toy industry e-commerce sales in China increased by 7% to $5.3 billion (USD), making China online toy sales the second biggest market in the world (it remains the world’s largest toy production base). Overall, it slowed down compared to 2020, but the industry’s performance was stellar with every month posting gains.
While Outdoor & Sports Toys saw a decline over 2020, all other supercategories experienced growth. And licensed toy sales in China performed well. China’s licensed toy share continued to fall behind all other countries we track, but the country’s share is growing fast and showing great potential.
Fast forward to the first quarter (Q1: January – March) of 2022, and China’s online toy market continued to thrive. Through the end of Q1, sales reached $1.3 billion (USD), an increase of almost 9% from the same time period last year. Sales of licensed toys increased 14%, and the top 3 supercategories in terms of dollar volume were Explorative & Other Toys, Games & Puzzles, and Plush, increasing 33%, 24%, and 22%, respectively.
I hesitate to provide specifics in terms of sales volumes for the remainder of 2022, but I feel confident enough to say that it will be another strong year for the industry in China. According to The NPD Group’s China Consumer Sentiment Study fielded in January 2022, when consumers in China were asked how comfortable they felt about their personal financial situations over the next six months, 85% responded positively, saying their spending will either increase or remain the same. We received the same positive responses when we asked how their personal finances would impact spending on their children, with most parents saying they expect their spending to either increase or remain the same. Yes, consumer confidence is strong in China, which bodes well for the toy industry as we look ahead in 2022. Looking even further ahead, with the relaxation of China’s three-child policy and continued growth of the middle-class population, we expect the Chinese toy market’s healthy growth to continue well into the future.