Coronavirus and the toy industry across the globe

Expert statements
Jane Wong

Jane Wong, Guangzhou,China
TOY INDUSTRY | Business magazine

When talking of the impact of COVID-19 on the Chinese toy industry, I would like to go into two specific aspects: manufacturing and retailing.

Toy manufacturers have been hit twice. Before March, the pandemic put the whole country on hold. A nation-wide quarantine policy kept factory workers from fulfilling orders for global markets. When China gradually recovered from the pandemic from March onwards, toy manufacturing was adversely affected again because of the cancellation of orders due to the global outbreak. Thus small or medium OEM factories for the toy industry are now struggling to survive.

Since the retail sector expected declining global demands after the coronavirus kept on spreading, factories involved in original brand manufacturing (OBM) are going to focus on the domestic market this year. China’s prosperous e-commerce and strong nationwide express delivery played critical roles during the peak pandemic period. E-tailing made up some portion of the losses suffered by bricks-and-mortar stores. As a result, the toy business is becoming virtual. For example, Alpha Group held its annual distributor conference and promoted its newly released products via live streaming. And toy retailers are putting on live shows to promote online sales.

Philippe Guinaudeau, Paris, France | Hong Kong
Kidz Glob

We are now seeing the light at the end of the tunnel. OK, we’re not going to lie: despite the big peak in retail sales prior to the lockdown period, the toy markets that seem to have suffered since the lockdown have been spreading throughout the territories. Of course, kids have now more time to diversify their leisure activities. Companies that sell screens as well as learning supports are some of the great beneficiaries of this period.

But in our surveys, we’re also seeing  the majority of families spending much more time playing with toys and games, individually and collectively: families are taking advantage of the lockdown to re-discover their bonds and create new habits.

Playing a family board game, creating new worlds with art and craft toys, building challenging puzzles … you name it, there are now new moments that families can share. The question is whether they will become a permanent fixture in people’s lives after the pandemic.

Daniele Caroli, Milan, Italy
Parent's Choice | Magazine for nursery products

Many member companies of Assogiocattoli, the Italian association for toy and nursery products, have actively countered the coronavirus pandemic. They have started various kinds of activities in order to be helpful while offices, factories and points of sale were shut all over the country to minimise the risk of infection.

Online entertainment and educational tools have been made available by Asmodee Italia Sr, Chicco - Artsana Group, Clementoni, Crayola LCC - Binney & Smith Italia, Faber-Castell and some other brands.

Several companies carried out donation campaigns. Giochi Preziosi distributed thousands of Pasqualoni (Easter eggs containing toys and games) to hospitalised children and to families in need. Quercetti has given toys to hospitalised children. The Prénatal Retail Group and Rocco Giocattoli donated thousands of chocolate eggs at Easter time. 

The Prénatal Retail Group made it possible for people to shop online for nursery products. Customers could either collect their orders at several of the chain’s points of sales, or receive guaranteed free delivery within the whole of Italy.

Portrait Maria Costa
Maria Costa, AIJU

Maria Costa, Valencia, Spain
AIJU | Technologi
cal Institute for Children's Products & Leisure

From the middle of March until May, Spain has been on lockdown, allowing its citizens to go out only to buy essentials. This situation affects the whole industry, including toy companies and distributors.

However, not all the news is bad. The industry is showing real signs of innovation. Many companies and retail stores are offering amazing deals (40% or 50% discounts) on their websites and social media for the time being. They report that they are experiencing an important increase in online sales. Some even point out that they are selling as many toys online as during the Christmas period.

Moreover, it was amazing to see the wonderful campaigns the industry is developing to support children these days. For instance, different companies presented information and recommendations to parents to help them entertain their little ones. They proposed original ideas to take advantage of playing with or without toys as a way for children to better understand this complicated situation. Families were encouraged to draw up timetables, to explain the pandemic, to stay active, and to socialize digitally. Some companies are even offering free options for kids to download games, DIY activities, stories, etc. All these content marketing strategies took into account the unique social situation.

With this perspective, the Spanish toy industry has positioned itself as a great support for society, which will hopefully have a positive impact on our sector once this pandemic is under control.

John Baulch, London, United Kingdom
Toy World |
Business magazine

As I write this, the UK has been in lockdown for more than one month, which has resulted in the temporary closure of many toy stores across the country. There are some exceptions: grocers such as Tesco, Sainsbury’s and Asda remain open, as do some mixed retailers which sell toys alongside food or essential items such as B&M and Home Bargains. The UK’s largest toy retailer Argos also has a presence in Sainsbury’s stores, since it was acquired by the grocer several years ago. However, while these outlets physically remain open, each of these retailers is prioritising food and essential household items over toys. So, while these stores continue to sell toys, the volume of stock being moved is less than might have been hoped for by suppliers.

Other retail channels proved more beneficial to toy suppliers, especially the online channel. In 2019, approximately 39% of toys sales were made online. No doubt this figure will increase substantially in 2020 due to the number of categories that are said to be performing well: games & puzzles, construction toys, outdoor toys, art & craft, and educational toys that help with home learning.

In addition, many specialist independent retailers have turned their businesses into ‘mini online operations’, taking orders either via a website or phone call and delivering them to consumers by courier. For many independents, this vital short-term revenue stream may make the difference between them surviving the crisis and being forced to close.

The UK retail market will look very different when the pandemic is finally over. Toys remains a partially protected category, as parents will want to keep their kids as happy as possible during this time. But even toys will not be immune to the unavoidable economic headwinds which will inevitably follow a prolonged period of store closures.

Steve Ekstract, New York, United States
Global L
icensing Group

From a Humanitarian perspective, many U.S. based toy companies such as Hasbro, Mattel, MGA have shifted production to assist in creating much needed medical supplies.

Operation Pac-Man is a worldwide effort started by Isaac Larian, CEO of MGA Entertainment, in April 2020 to provide Personal Protective Equipment to healthcare workers and hospitals who are facing a shortage of supplies while they fight the spread of Covid-19. Mattel has retooled its production to produce urgently need face masks and face shields for first responders and healthcare workers. They have launched a Mattel Playroom Website, providing free games, videos and activities for kids sheltering in place.

Hasbro launched the global initiative of Bring Home the Fun, to provide parents and caregivers resources to help keep kids occupied and engaged during the extended time at home and indoors.

Hasbro partnered with Save the Children and No Kid Hungry in their effort to address the most urgent needs of children, including providing nutritious meals and distributing books and learning resources to those children and families most in need. Hasbro has donated thousands of toys and games to low-income communities to continue to inspire creativity and fun for vulnerable children during the COVID-19 pandemic.

Best Practice example of the brazilian toy industry during the COVID-19 Crisis

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