Spielwarenmesse: 6 tips how to participate in the growing Chinese Consumer Market

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6 tips how to participate in the growing Chinese Consumer Market

from Richard Gottlieb

Are you selling your toys in China? You’re not? Well, you may want to get started because, if you are not, you are going to have a much harder time growing your business in the coming years.

It is actually possible to predict the future in the toy industry. Simply track the birthrate of a country. If the birthrate is on the way down, you can pretty well forecast that in two or three years that country’s toy consumption is going to be down as well. And if you live in a country with a consistently low birthrate, you have probably already seen the effects.

Countries with Low Birthrates

According to the World Atlas, Japan has the lowest birthrate in the world and major European countries aren’t far behind. Italy, Portugal, Greece, Spain, Germany, Poland, The Netherlands and Denmark all make the top 50 countries with the lowest birthrates.

If you are an American or Canadian reading this article, don’t feel too smug. Canada makes the list as well, and though the U.S. does not, it’s only a matter of time. That according to articles like this one from The Washington Post, “As U.S. fertility rate collapses, finger-pointing and blame follow.“

China, on the other hand, is growing its population at a rapid pace while at the same time encouraging its people to be active consumers. Put those two together and China can clearly be seen as the world’s best possible location for a company to grow it revenue.

245 million Chinese children and counting

Just consider China’s child population as compared to other counties. Below are number of children, age 14 and under, in ten major countries:

Number of children up to 14 years

  • China: 245 million
  • USA: 62 million
  • Brazil: 46 million
  • Mexico: 35 million
  • Russia: 25 million
  • United Kingdom: 12 million
  • France: 12 million
  • Germany: 11 million
  • Japan: 16 million
  • Italy: 8 million

Add it up and you will see that China, with 245 million children, has a larger child population than the other nine (227 million) put together.

End of China’s “One-Child Policy”

Making that number even more significant are the changes in China’s One-Child policy. For years China limited its population growth by limiting families to one child. In 2013 that limit was increased to two children and there is now talk of increasing it to three.

The numbers demonstrate that China is a great opportunity, but don’t think entering is easy. The market is complex and you will need a guide. The best approach is to use a reliable distributor, one that is already working with other western brands, rather than trying to go it alone.

Wal-Mart, Hamley’s and Carrefour are already there

Yes, it is challenging but there are some familiar retail names that are already there. Toys R Us Asia, Wal-Mart, Tesco, Mothercare, Carrefour and Hamley’s are all there. It is also reported that FAO Schwarz has plans to enter as well. But it’s not just about western retailers. Kids Land is China’s largest toy retail chain and Alibaba and JD.Com are ecommerce powerhouses.

It’s an exciting time to be selling in China. Companies like Disney, Marvel, Mattel, Ravensburger, Hasbro and Lego are already there and so is Peppa Pig. Shouldn’t you be there too?

How to enter the Chinese market

Entering the Chinese market is not easy. Here are some suggestions for reducing risk while increasing opportunity:

  1. Make sure that you have intellectual property protections in place before you enter. If you do not, some other company can file and it will be them and not you with rights to your trademarks and patents.

  2. Don’t attempt to enter on your own. The Chinese market is complex and most toy companies are using distributors. You will be wise to do the same thing.

  3. Attend major Chinese domestic trade shows. These are fairs that are focused on selling to Chinese retailers.

  4. The Chinese consumer loves western brands so if you have a brand name that is known for quality, than you will likely find interest in your products.

  5. There is a growing, affluent consuming class in China but there is also a large population of people who have less disposable income. So be prepared to, in some cases, make changes to your products in order to hit lower price points.

  6. Secure a interpreter when attending trade shows in China. Mainland China is not like Hong Kong as there are far fewer English speakers. Fortunately, interpreters are not hard to find. Contact the tradeshow you are attending and they can accommodate you by making one available.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of Spielwarenmesse eG.

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