China’s toy factories are getting an influx of export orders this year, particularly from the US, with some seeing sales triple as demand for home entertainment products heats up under massive rescue packages and continuing home isolation.
However, many companies said they are facing surging costs for materials, and considering raising product prices as a result.
Maisto, a car model maker based in Dongguan, South China’s Guangdong Province, is one of the toymakers that has seen business shoot up in the post-coronavirus era. So far this year, orders from US customers are up 52 percent, while orders from EU customers are 28 percent higher, according to the company. In total, Maisto’s overseas orders have risen 60 percent year-on-year so far in 2020.
Maisto’s production manager John Ng told the Global Times that the recent rounds of economic stimulus in the US have helped drive up demand, while the shutdown of many foreign factories amid the pandemic has also led to rising orders for China-made toys.
Yang Shihuang, manager of Wenzhou Shanghuang Handiwork Co, a maker of jigsaw puzzles, said that his company sold about 1 million yuan ($155,300) worth of puzzles each month on average this year, compared with about 300,000 yuan last year. Most of his products are sold to US clients via amazon.com.
“This year saw a more severe crackdown on pirated products on amazon.com, which benefits companies like ours that design their own products and hold copyrights,” he told the Global Times on Monday.
In the first four months of 2021, China exported $10.58 billion worth of toys in the first four months of 2021, up 71.3 percent on a yearly basis, according to latest Chinese customs data.
However, some experts noted that higher raw material prices are affecting Chinese toymakers’ business. For instance, the price of styrene, which is used to manufacture plastic products, has surged to more than 10,000 yuan per ton compared with only 5,400 yuan per ton before October 2020, an increase of nearly 85.2 percent.
John Ng said that his company’s current orders were signed before raw material prices surged, and therefore the selling prices are locked in, meaning the recent commodity price hikes are putting pressure on the company’s profit margin.
“We will renegotiate with our dealers about the possibility of raising selling prices next year,” he said.
Fu Linghui, spokesperson of the National Bureau of Statistics, said during a press conference on Monday that the price rises for global bulk commodities might put some burden on downstream companies in China, and the government would take measures to strengthen raw material market regulations.
Wu Chenhui, an independent industry analyst, also told the Global Times that global buyers’ rush to replenish stock may have also pushed material price higher, but prices are already reaching a peak and a correction is expected to start soon.
Workers make toys at a factory in Lianyungang, East China’s Jiangsu Province over the weekend. Domestic and foreign orders have been flowing into the company in recent days. Photo: cnsphoto
