Make efforts to make AI, and traditional toy companies aim at new outlets

On April 10, the 2024 Shenzhen International Toy Fair, known as the "vane of China's toys", came to an end. China is the world's largest toy producer and exporter, and since the beginning of this year, as the international toy market demand continues to recover, mainland toy exports have also shown a warming trend.

However, will the demand recovery become a flash in the pan, and what specific measures will the listed companies take?

A reporter from the China Securities Journal learned from the field investigation and visit that toy companies represented by listed companies such as Xinghui Entertainment, Shifeng Culture, and Gaole Co., Ltd. continue to explore and innovate, accelerate the implementation of digital transformation of industrial clusters, and develop digital technologies such as artificial intelligence (AI), and strive to stand on a new outlet and enhance their competitiveness.

There has been a clear resurgence in sentiment

The reporter saw at the Shenzhen World Convention and Exhibition Center that the super-large exhibition hall was full of visitors, and the uniquely designed booths were lined up one after another, and the dazzling array of exhibits made people dizzy.

Chen Huangman, President of Guangdong Toy Association, said that after 36 years of continuous precipitation, the Shenzhen International Toy Fair has become an unmissable industry event in the global toy industry, and has been highly recognized by toy manufacturers at home and abroad. There were more than 4,900 booths and more than 1,400 exhibitors at this year's International Toy Fair, an increase of more than one percent over the previous session, and more than 100,000 exhibited goods, all of which hit a record high.

This year's Shenzhen International Toy Fair also attracted a large number of overseas buyers, with a total of distributors, department stores, supermarket chains and other professional sales channels from more than 20 countries and regions in Europe, the United States, the Middle East and the Asia-Pacific region actively participated. In addition, buyers from South Korea, Indonesia, Malaysia, Vietnam, Myanmar and other countries participated in the exhibition.

Chen Huangman introduced that since the last exhibition, the popularity of the Shenzhen International Toy Fair has recovered significantly. This year's exhibition has attracted more attention from overseas buyers, and the market sentiment continues to rise. According to preliminary statistics, the number of overseas buyers at this year's Toy Fair increased by about 40% compared with last year, and the total number of exhibitors increased by about 30% compared with last year.

Demand is showing positive signs

Last year, the export volume of toys in the mainland declined. Customs data shows that the export value of mainland toys in 2023 will be 40.570 billion US dollars, a year-on-year decrease of 12.2%.

The reporter learned from the on-site investigation and visit that after the adjustment, since the beginning of this year, the global toy industry has begun to stabilize and rebound, positive signals continue to appear, and market demand has begun to continue to recover. A few days ago, the data released by the General Administration of Customs also showed that from January to February 2024, the export value of toy products in mainland China increased by 15.9% year-on-year.

Chen Huangman said that although the mainland's toy exports declined year-on-year last year, the mainland's toy industry has strong development resilience and obvious advantages such as industrial development clustering. Taking Guangdong as an example, as China's largest toy production and export base, Guangdong's toy industry has a complete upstream and downstream industrial chain, as well as a deep R&D and innovation foundation, and has obvious competitive advantages in the international market.

Chenghai District, Shantou, Guangdong Province, is known as the "Toy Capital of China" and has the world's most complete supporting facilities, the largest scale and the highest market share of the toy industry cluster. Cai Jialin, head of the Shifeng cultural toy sector from Shantou, told reporters that since 2022, the global supply chain has been impacted by factors such as the geopolitical situation, coupled with the impact of global inflation, the cost of living of consumers has increased greatly, and the expenditure on non-essential goods such as toys has been compressed, dragging down market demand.

According to reports, Shifeng Culture has more than 1,000 kinds of toy products exported to nearly 100 countries and regions in the world, such as Europe, America, the Middle East, and Southeast Asia. Cai Jialin also said that after two consecutive years of adjustment, it seems that the global destocking is nearing the end, and the international market demand is continuing to recover. "The number of visitors at this exhibition has increased by at least 20% compared with the previous one, and more than 10 staff members are too busy. The company has launched many intelligent and green toy products, and it is expected that the company's exports will continue to grow steadily this year. ”

At the booth of Qunlong Plastic Products Co., Ltd., the traditional building block toys with Chinese cultural characteristics attracted the interest of many buyers, and the scene was crowded. Lin Weili, the manager of the company, told reporters that the company has launched a new series of national tide toys, which have been successful as soon as they are listed, and sales have grown strongly, and the company will develop more toy products with traditional cultural themes in the future.

Accelerate your digital transformation

The reporter also learned that in recent years, more and more traditional toy companies have accelerated the implementation of the digital transformation of industrial clusters through the implementation of a new round of technological transformation. With the further development and popularization of digital technologies such as artificial intelligence, the international status and brand influence of the mainland toy industry are expected to continue to improve in the future, realizing the transformation from a "toy production country" to a "toy manufacturing power".

Chen Huangman introduced that in recent years, a large number of high-tech enterprises and specialized and special new enterprises with independent intellectual property rights have emerged in the mainland toy industry, paying more attention to scientific and technological innovation and achievement transformation. In toy industry cluster areas such as Dongguan and Shantou Chenghai, many toy companies have achieved digital and intelligent production and management. "Scientific and technological innovation is becoming the fundamental guarantee for the mainland toy industry to enhance its competitiveness in the international market, and provide a steady stream of impetus for the high-quality development of the toy industry. Chen Huangman said.

Chen Huangman also introduced that like building block general-purpose parts, toy companies can strictly control the error below 0.02mm, reaching 1/5 of the diameter of a hair. In addition, for products with high technical requirements such as electronics, voice smart toys, etc., multinational companies are usually more willing to entrust the production of products to Chinese enterprises. The reporter also learned that Rastar Entertainment, which participated in the exhibition, increased the control mode of dynamic toy series by using VR remote control, voice remote control and other technologies, which further optimized the control experience of players. In addition, Shifeng Culture has applied GPT large models, programming, vibration sensing and other technologies to create a variety of hot-selling smart toys and achieved great success. In the production process, more and more toy companies have introduced intelligent production equipment and built automated factories to realize the intelligent and digital upgrading of production, sorting, packaging and other processes, and greatly improve production efficiency and product quality.

The organizer also introduced that this year's Shenzhen Toy Fair set up a theme pavilion of "IP Licensing and Derivatives, Trendy Toys and Collectible Toys" for the first time, highlighting the various licensed products and trendy toy products that are currently widely sought after. Pokémon, Ultraman, Naruto, Ye Luoli, Marvel, Disney and other world-renowned IPs, as well as IPs representing national fashion and aerospace culture, all appeared. Chen Huangman introduced that trendy toys and IP authorized derivatives have always been the dominant categories of the Shenzhen International Toy Fair. In recent years, toy companies have paid more attention to creating original IP and launched more and more trendy toys, which are loved and sought after by consumers.

The reporter also saw at the exhibition site that this Shenzhen International Toy Fair also set up a special "Chinese and Foreign Toy Award" product display area to display the latest award-winning toy products. According to the organizers, since the official launch of this award, hundreds of companies have responded enthusiastically, based on different judging dimensions, a total of 14 awards have been set up this year to comprehensively display the latest innovation achievements of toy companies, support enterprises to innovate products and strengthen brands.