2023, for the toy industry is still a year full of challenges, demographic changes, inflation, raw materials prices, price implosion, all of which is not to say, the toy industry business is difficult. However, from the industry level, we also found some consumer demand presents a change in the trend, guiding the development of the industry.

What are the obvious trend changes in the toy industry?

First, the trend of intelligent toy products is a major trend.

With the rapid development of artificial intelligence technology, the functionality of toys is also constantly enriched, compared with traditional toys, smart toys are more interactive and interesting. At the same time, the smart toy market is also ‘rolled’ to the black technology, many toy companies are trying to apply cutting-edge toy technology, expanding categories, expanding incremental, and strive to expand new growth points.

For example, VTech's audio-visual encyclopaedic globe early childhood toys, through the AR black technology, with a sweep of the phone, you can see a 3D stereo world; and rooted in STEAM education Tudou, the launch of the advanced AI AI sensor robot programming, the main focus of the development of children's interest in science, concentration. In the line of play, Tudao is to cover the whole product line of learning, examination, competition and creation. In addition, the real abundance of culture has taken a fancy to the ChatGPT and other language models that have been on fire in recent years, and has developed the Feifei rabbit GPT intelligent toys, and it is reported that the product is still in the testing stage.

It can be seen that the category of smart toys is not only loaded with more educational functions by the play enterprise, but also through a variety of innovative technology to enhance profitability and industry competitiveness. In addition, in the long run, along with the implementation of the double reduction policy, parents will pay more attention to the quality of children's education, and toys also carries the parents hope that children can get cognitive enlightenment and ability to cultivate awareness, which is also a good opportunity for the toy industry.

Secondly, the upgrading of the demand for fine parenting has fuelled the high growth of the educational toys track, which has also brought new business opportunities in disguise.

According to a report by Fortune Business Insights, the global educational toys market was $68.81 billion in 2021, and is expected to maintain a compound annual growth rate of 9.83% in the future and increase to $132.5 billion in 2028.

Toy companies have launched educational toys, such as Bruco's building block products, to develop the creativity and hands-on skills of children in the younger age group. Milu focuses on growth progression puzzles, which fit the law of children's intellectual development, increasing from simple to complicated, and cultivating babies' logical thinking. The product also has an innovative characteristic selling point, in conjunction with a number of domestic and foreign artists co-creation at the same time, but also the cultural elements of different countries into the product, continue to win the favour of consumers.

It is worth paying attention to, in the purchase of toys, the product's scientific and educational, material safety, design and so on are the mother and baby consumers are concerned about the top priority.

On the Jitterbug platform (January 2022-April 2023 by Jumbo Count & Count E-commerce Research Institute), the playback volume of educational toys leads all children's toy subcategories, and toys with the attribute of ‘puzzle’ such as smart dolls/dolls, building blocks, puzzles/puzzles, etc., which are suitable for children of different ages are at the top of the playback volume. The play volume of smart dolls/dolls, blocks, puzzles/jigsaw puzzles and other toys for children of different ages with ‘educational’ attributes are all in the top position, showing that ‘educational’ has become the users' “immediate need” for children's toys.

Third, the IP licensing market competition is gradually white-hot.

IP has long become the new popular ‘currency’, which carries the bottom of the toy giants to withstand the winter. For example, Disney with strong IP reserves, authorised once again ushered in new growth. 2022, Disney licensed merchandise annual sales of $ 61.7 billion (2021 licensed merchandise annual sales of $ 56.2 billion).

And LEGO's IP products sell well and at high prices, CITIC Securities reported that as of 28 July 2022, LEGO's official flagship shop on Tmall, monthly sales of more than 20,000 individual products, including 7 IP-licensed products (58%), the price of more than 3,000 yuan for 12 individual products, including 8 IP-licensed products (67%). Disney, Mattel, Bandai, Lego and other foreign toy brands, none of them are the beneficiaries of IP.

Holding a number of heavyweight IP Disney naturally became the focus of competition among players, last year, Mattel from Hasbro to recapture the production of Disney Princess, Frozen dolls authorisation, this initiative further saved the performance of the decline. In the plush toy category, IP-licensed dolls are more likely to be favoured by consumers, and many consumers who buy such toys are, for the most part, loyal fans of IP.

The high premium and high return brought by product IP licensing has also directly led to the continuous expansion of the IP licensing market. The ‘2022 China Brand Licensing Industry Development White Paper’ released by the China Toy and Baby Products Association shows that the total number of brand licensing enterprises in China is 632, up 7.8% year-on-year, and the number of IPs that have been licensed is 2,354, up 7.9% year-on-year. The growth in numbers means that it is not easy for companies to get out of the loop quickly in a crowd of IP co-operation.

In addition, the influence of cultural national self-confidence and the national tide factor has also given to the opportunity for the birth of some new IPs, such as the launch of special products such as Ice Dumpling, Rongbao, Samsung Pile, and Only This Green Green, etc., which have launched the rapid development of the industry while highlighting the IP attributes and the differentiated kernel of the products.

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