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Inventory of toys and video games market
The toy market in China remains a market to develop. Indeed, the turnover of the market is estimated at more than 28 billion dollars with an average increase of 22% per year. According to the research firm Euromonitor, in 2020, the market is expected to reach 300 billion yuan. However, the average basket allocated to this item is only $30 per child. Toys represent a market where; product innovation is valued to stimulate market growth.
China is the biggest producer of toys, with a manufacturing “made in China” estimated at 80%. The market has strong competition from international and domestic brands. Foreign brands are generally positioned and dominate the high-end toy market, while domestic brands are positioned at low prices.
Local brands dominate the toy and video games market in China. There are Tencent Holdings and NetEase.com for video games and Alpha Group for toys. Eight of the top ten toy companies in the market are national brands because they have an advantage in terms of price, distribution network and resources.
Electronic toys and video games have a strong growth in the market because they are more and more affectionate to consumers and because this segment affects a large target of consumers (children and adults). Indeed, the arrival of VR / AR technology is a source of growth in the market.
Distribution on the market is taking a new turn since a preference can be found via the online channel for the purchase of toys at the expense of physical stores. Online shopping is the most important channel for video games and children’s games. To facilitate the customer journey and its purchasing process, the brands have created their online stores.
Growth opportunities for brands
The market is attractive for international brands and for a variety of reasons:
The end of the one-child policy: Since 2015, the Chinese government has abolished the Single Child Policy Act and now allows parents to have two children. This change will affect many sectors of the country including that of toys. Indeed, the government foresees an increase in births of 2 million newborns per year following the abolition of the reform. This change offers brands development opportunities in the marketplace.
The emergence of the middle class: In recent years, the whole country has been in a state of flux. The Chinese middle class is evolving and has an increasingly strong purchasing power, allowing it to aspire to new expectations and new needs. The development of this class is to be taken into consideration by the brands since it represents a potential of customers of 300 million people.
A growing preference for quality toys: toys from foreign brands are becoming popular with consumers. Indeed, being international brands in China remains a competitive advantage in the market thanks to consumers’ perception of these brands. The Chinese see foreign brands as high-end products and guaranteeing product quality. Moreover, they are known to convey the differentiation and self-esteem of individuals through the purchase of these brands.
Fast Growth in e-Commerce: China has become the giant of online commerce as it is the most important market in the world. Online sales in 2016 represent a total of 701 billion euros, an increase of more than 26% according to the National Bureau of Statistics of China. With its population of more than one billion, the Chinese digital sphere has had more opportunities to stimulate this distribution channel. Moreover, the rapid adaptation of individuals to digital has enabled the development and appropriation of this channel among consumers. In addition, social trade is a growth factor in the toy market, since it allows a stronger interactivity between brands and consumers.
Tools for introducing your brand to the Chinese market
Two ways to integrate the toy market in China are available to you. First, you have the opportunity to enter the market by relying on intermediary agents to help you get into the market. The second way is to settle directly via online trading platforms. Manufacturers of foreign toys are mostly brands of electronic toys, educational toys and video games. This second channel of distribution seems consistent with the marketing of your brand.
Here are some tools to use to settle in China:
Apprehend and educate consumers
The consumer has a real need for confidence in the brands to decide to buy them. Chinese consumers are generally suspicious individuals due to the universe of counterfeit product in which they evolve. The reputation of a brand is a crucial element in a company’s growth strategy in China.
You will need a marketing strategy to convey a good image of your products and your brand and to let you know about your potential customers. Chinese consumers are hyper connected and very sensitive to the opinions and comments of their peers on different social networks or forums.
The optimization of your website and its visibility on Baidu
Online presence is an important element in the development of your activities on the territory. Having a website in Mandarin and hosted in China is mandatory. This website is a window allowing consumers to take ownership of the product range. Do not forget to follow the trends of Chinese visuals and design for the development of your institutional site.
Concerning SEO, in China, the search engine used is not Google, here Baidu holds 70% of the market share in regard to searches made by Internet users. SEO is a more than an important way to attract visitors to your site. Turning to the search engines to find the information needed for our expectations is even truer in the Chinese market where the research upstream of any purchase is impressive.
Two strategies of references are available to you to develop your visibility:
Natural SEO or SEO which aims to get according to a group of keywords, the highest position among search engine results pages.
The second possibility is the paid search by PPC (pay per click). This advertising strategy is considered as Ads . Therefore Paid SEO is click-driven results, which usually appear above or to the right of natural results.
If the latter strategy is effective, it has a high cost for companies without a fairly high communication budget. As for SEO, a long-term strategy is needed to achieve concrete results.
Social Media a link to reach consumers
Chinese citizens are more than 90% to have an account on at least one Chinese social network. Having a strong presence and visibility on these networks increases your brand’s chances of becoming viral and being shared among consumers. For this, we have two large social networks on which to position WeChat and Weibo.
Over the years WeChat has become a full-fledged ecosystem used by more than 800 million Chinese Internet users. It is very important for any digital strategy carried out in China to have an official account. Users usually find virtually all of their information on the platform. Indeed, this phenomenon allowed to give to the platform the nice nickname of the “WeChat Times”.
As for Weibo, the network has the highest penetration rate in the country.
No matter the size of your toy brand, in the Chinese market, you will always have the opportunity to develop your business if you use the right means that will generate more meeting point with consumers.
Apply to Gentlemen Marketing Agency
Our digital marketing agency located in Shanghai specializes in the development and elaboration of the marketing and digital strategies of companies wishing to develop their activities in the Middle Empire. Our international team of 25 people makes us an ideal agency to develop your interests in China.
Do not hesitate to contact us for more information.