29 Jan 2018
Toy Fair Season 2018 Kicks Off in Style at the Hong Kong Toy Expo
John Baulch, the Publisher of Toy World, casts an eye over the four events that constitute Toy Fair Season – the London, Nuremberg, New York and Hong Kong toy shows. First out of the traps is the HKTDC Hong Kong Toys & Games Fair…
Every year, the dust has barely settled on the Christmas trading period before retail buyers from across the globe set off in search of the toys most likely to be found nestling below the festive foliage following Santa's next scheduled visit.
Indeed, there are only a few short days to process the lessons of the previous season before buyers have to head off to Hong Kong for the first of the Big Four shows that every toy trader has to take in. With little regard for the stamina or body clock of these globetrotting game grandees, the remaining Big Three – London, Nuremberg and New York – then follow in quick succession, with the whole of the Toy Fair Season over in a little under six weeks.
As the sector's first global show of the year, the HKTDC Hong Kong Toys & Games Fair – Asia's largest toy fair – always enjoys a particular advantage. Beyond that, Hong Kong occupies another pivotal role within the international toy community – its undisputed position as the gateway to mainland China. While Chinese factories comfortably remain the largest manufacturers of toys in the world, it is Hong Kong that hosts the region's most important toy show.
This is despite the fact that mainland China now has two dedicated toy shows of its own, both of which have grown – albeit at a modest rate – over recent years. They have, however, remained almost exclusively focused on the Chinese market and have a very long way to go before they can hope to match the Hong Kong Toys & Games Fair in terms of international reach and influence.
The Hong Kong toy show is held concurrently with three other HKTDC events – the International Licensing Show, the Baby Products Fair and the International Stationery Show. In total, across the four shows, some 3,000 exhibitors are packed into the Hong Kong Convention and Exhibition Centre.
The HKTDC, the organiser of all four events, clearly appears to believe that running these shows concurrently facilitates cross-category buying for many of the international visitors. While there may be some truth in this for a relatively small number of attendees, it's hard to see that this is widely borne out.
While the Toys & Games Fair has a truly international outlook, the remaining three shows still seem to have more of an Asian focus at this particular stage in their life-cycles. This probably explains why the Toys & Games Fair continues to lead the way in terms of visitor numbers. This year, for instance, 49,000 attended the Toy Fair, far outdoing the three competing events – the Baby Show (33,000), the Licensing Show (22,000) and the Stationery Show (21,000).
In another plus for the Toy Show, there was a surge in the number of buyers from emerging markets this year, including India, Malaysia, Russia, Poland, and Turkey. Thankfully, this did not come at the cost of a drop in the level of delegates from the developed markets, with the US, Canada, Netherlands and Sweden all better represented this year than at past events. Crucially for any Hong Kong-based event, there was also resurgent interest from the mainland, with the number of Chinese buyers said to have enjoyed double-digit growth in percentage terms.
As well as its unrivalled international outlook, it is also fair to say that the Hong Kong show remains comfortably the largest of the four events, something that has played a key role in its evolution. Indeed, as a perennial attendee, I have watched it grow hugely over the past 20 years.
When I first attended, it was unashamedly a showcase for OEM Chinese factories. As such, its halls were populated by aisle upon aisle of homogeneous booths, all crammed with open-source, bread-and-butter toy lines.
Back then, I remember walking the aisles one opening day, hoping to see something genuinely new and exciting. Invariably, I was disappointed. While the mainland's factories clearly had the wherewithal to produce vast quantities of traditional lines at competitive prices, there were seldom signs of any real innovation or glimpses of where the toy market might be heading.
Today, while there are still areas like that within the show, they are outnumbered by those stands offering an altogether more interesting selection of products. From educational toys focusing on science, technology, engineering and maths (STEM), to demonstrations of how the latest technology is being co-opted by toy manufacturers, to outdoor toys and the latest drones, the aisles are now stacked with myriad cutting-edge developments, all waiting to be discovered.
This couldn't have happened without the majority of exhibitors overcoming their reluctance to openly display new products, with the fear of the copycat brigade having receded somewhat. This, however, is not universally the case.
Among the most resistant to this new openness are many of the big US toy manufacturers. Typically, they shun flaunting their latest wares at the show proper, opting instead to reveal them solely in private showrooms in nearby Kowloon and then on an invitation-only basis.
While their reluctance to go public can be understood, the showroom concept has one fundamental flaw – there is no prospect of passing trade. Time and again, it is always that chance meeting with some unknown individual that turns into a major lead.
In truth, most companies can't afford to be quite so insular, with many of them actively looking for new distribution and retail partners in those international territories they have little experience of. As a result, this year, a number of businesses seemed to be hedging their bets – hiding their most innovative new lines away in private showrooms, while looking to be wooed by potential new business partners on their show stand proper.
If you think of the Toy Fair Season as the business equivalent of a four-lap 1500m running race, then the closing day of the Hong Kong show marks the end of that all-important first lap. As with many races, the pace is set on the first lap and, accordingly, by the time they head home, many of the attending buyers will have begun to get their first inklings as to how the year ahead is likely to shape up.
Those familiar with the stalwarts of the toy trade will know they are, largely, an optimistic, glass-half-full sort of a bunch. Even in the wake of one of the most turbulent trading years for quite some time, that optimism has remained in place. While it may be more measured, tempered, perhaps, by the events of the past few months – the uncertain future of Toys R Us and disappointing Christmas trading to name but two – no one seems entirely despondent.
There is, however, a question as to whether 2017 marked a sea change for the industry or whether it was just a blip and the goalposts have not necessarily shifted on a permanent basis. As the year unfolds, the answer to that is sure to become clear. Already, though, the cannier are clearly planning – as much as they can – for further unpredictability. Indeed, never has a flexible, nimble, pro-active (and reactive) approach seemed more important.
Undoubtedly, just as there were winners and losers in 2017, this year will see more casualties, while also offering the chance of success to the lucky few. Those suppliers and retailers that are able to adapt quickly to changing conditions will, more than likely, find themselves in the latter category.
The word on the street – or between the aisles – is that innovation and IP will reign supreme in 2018, with licenced properties, even when backed by the biggest of movies, no guarantee of success. This year, a number of showgoers were specifically searching for innovation in preference to new licensed properties. This should come as no great surprise when you consider last year's best performers – fidget spinners, Fingerlings, LOL Surprise, Hatchimals…
It's safe to say, though, that the established, successful licensed properties will continue to do well. Those that aren't at the forefront of their category, however, may find it somewhat harder to make headway this year.
Overall, though, the toy industry is known for its great camaraderie and ability to pull together. This spirit of all-in-it-togetherness may prove an asset in the coming months, as 2018 looks set to be no less of a rollercoaster than 2017. Buckle up, with only the Hong Kong show out of the way, the ride has just begun.
John Baulch is the Publisher of Toy World,
the UK's leading toys and games trade publication