Business is booming.

Toy sellers ponder reliance on China as supply problems bite

87


The colourful piñatas that usually hang from the ceiling of Jennie Hogg’s Cachao Toys store in London’s Muswell Hill have been impossible to source this Christmas.

“My suppliers said it’s too expensive bringing them over,” Hogg said. Though supply chain disruptions and higher transport costs have put piñatas out of reach, “customers will still get what they need, they just need to keep an open mind,” she added.

The global supply chain crunch has led retailers from grocers to toy stores to warn of product shortages and higher prices. Recent manufacturing delays in China have added to the pressure, leading some in the $95bn global toy market to reconsider their reliance on the country.

Lego, the world’s largest toymaker, said its geographical spread of manufacturing had helped it shrug off the disruption and it posted a record first-half profit this year. The company coped with high demand in lockdowns and pandemic supply pressures thanks to its manufacturing facilities in Europe and Mexico. This week, the Danish group announced a $1bn investment in Vietnam to provide local production for neighbouring Asian markets.

China accounts for roughly 80 per cent of global toy exports but Alain Joly, founder of Doudou et Compagnie, France’s leading seller of teddy bears, said problems caused by the pandemic had given a “financial reason” to increase local production.


80%


Proportion of global toy exports that are from China

Most of Doudou et Compagnie’s products are made in Chinese factories. But in 2019 the company acquired Maïlou Tradition, which manufactures high-quality soft toys in Brittany.

“We planned for 10 per cent of our production to be in France. Now, our target is 20 to 25 per cent,” said Joly. It hopes to achieve this by mid-2023.

Doudou et Compagnie’s French-made products will be no more than 40 per cent more expensive than high-quality toys from China and Joly believes demand for home-made teddies will be high.

The “made in France” toy movement is growing, up from 8 per cent of the French market in 2014 to 15 per cent today, according to Alain Ingberg, head of France’s Association of Toy Creators and Manufacturers. “I’m not saying that everything will come back, but we’ll get to 20 per cent [in five years],” he said.

Frédérique Tutt, global toys industry analyst at NPD Group, a market research company, said the “story of localisation and a will of reindustrialising the sector” was taking root elsewhere because of the shipping crisis.

Freight rates have rocketed. The cost of shipping a 40-foot container from China to the UK peaked above $15,000 in October, almost seven times more expensive than a year earlier, according to data provider Xeneta.

Jennie Hogg in her Cachao Toys store
Jennie Hogg in her store in London. She says customers ‘need to keep an open mind’ when buying gifts this Christmas © Ian Johnston/FT

Costs have edged lower but port congestion, vessel delays and container shortages persist, according to Peter Sand, chief analyst at Xeneta. “For container shipping, the arrival of Omicron is another hurdle,” he said.

Character Options, whose brands include Peppa Pig and Fireman Sam, has its toys made in subcontracted factories in China. Jerry Healy, group marketing director, said the company had taken “the bull by the horns”, ordering 95 per cent of its entire stock requirement by the end of March, two to three months earlier than usual.

But long lead times for deliveries mean it has been unable to replace unexpectedly strong performers such as Moon Shoes — strap-on bouncy footwear branded as “trampolines for your feet”.

“That’s happened to five or six lines of toys, where we were significantly short,” said Healy. “We forecasted a number where it wasn’t big enough.”

Column chart of To ship a 40-foot container from China to the UK ($) showing Short-term freight rates soar

Those missed opportunities equated to “a couple of million” pounds of lost revenue, he added. “We had the potential to have a fantastic year and we’ve had a pretty decent year. It could have been much better.”

At Los Angeles’ ports, where roughly 40 per cent of Chinese imports to the US arrive, about 75 container ships are waiting to dock, according to logistics group Kuehne+Nagel, with some stuck for weeks.

Ynon Kreiz, chief executive of Barbie-maker Mattel, was among business leaders to attend the White House last month to discuss the issue. In recent years, Mattel has closed factories in Asia, Canada and Mexico but it still owns some of its own factories in China, and its scale has helped it to manage supply challenges.

Smaller rivals, such as model trainmaker Hornby, which outsourced production to China in 1995, do not have such control. After supply problems hit profits, the company has diversified to several Chinese suppliers in recent years. But, with demand up 35 per cent for its Scalextric sets compared with last year, they are running short in some UK toy stores.

Still, Lyndon Davies, chief executive, said the company has no plans to repatriate production because of high labour costs and skill shortages.

Character Options’ Healy said that “if the logistics challenge was to remain, more companies will certainly look at it”, though conceded “there’s no quick fix”. For low-margin toys retailing at less than £20, the elevated costs of local manufacturing are off-putting, he said.

But manufacturing in China is not as cheap as it was. Rising shipping, energy and raw material costs mean prices will climb further. Tutt predicts rises of as much as 12 per cent next year, especially for bulkier toys of which fewer can fit in containers.

“Retailers don’t have that much leeway,” she said. “It’s likely they’re going to pass some or all of that on to the consumer.”

Additional reporting by Harry Dempsey



Source link

87 Comments
  1. Rtjjdy says

    order levofloxacin 250mg online order generic levofloxacin 250mg

  2. Aktemb says

    dutasteride brand buy zofran 4mg order ondansetron 4mg without prescription

  3. Mepjxw says

    buy spironolactone 100mg fluconazole 100mg price buy fluconazole 100mg without prescription

  4. Qiffhq says

    buy ampicillin 500mg without prescription ampicillin 500mg price erythromycin oral

  5. Euouer says

    order sildenafil 50mg pill purchase methocarbamol pill buy robaxin pills

  6. Dgyfge says

    order suhagra 50mg without prescription sildenafil 25mg buy estradiol 1mg without prescription

  7. Mirdnx says

    lamictal uk order retin gel generic buy tretinoin gel generic

  8. Sikerk says

    tadalis 20mg without prescription order tadalafil 10mg brand diclofenac 100mg

  9. Uurizy says

    order isotretinoin 10mg online isotretinoin sale azithromycin online

  10. Btbxdl says

    buy indomethacin 75mg online trimox 250mg tablet trimox 250mg drug

  11. Bmzrxh says

    cost tadalafil 40mg cialis no prescription sildenafil for men over 50

  12. Uuvbyp says

    tadalafil 40mg sans ordonnance en france viagra 200mg generique pas cher viagra 25mg generique en pharmacie

  13. Fuxdiz says

    deltasone order online deltasone 20mg over the counter cialis viagra sales

  14. Xlpzpm says

    tadalafil 5mg generika rezeptfrei kaufen tadalafil 5mg kaufen ohne rezept sildenafil 100mg fГјr frauen

  15. Gbyraf says

    buy isotretinoin 20mg pills stromectol 12mg tablet ivermectin 5 mg

  16. Vjwnxy says

    buy doxycycline 100mg pill clomid 100mg canada furosemide 40mg sale

  17. Szpzqq says

    altace 10mg drug buy irbesartan 300mg generic astelin online buy

  18. Pgqhfo says

    order generic clonidine 0.1mg cheap tiotropium bromide 9 mcg generic spiriva 9mcg

  19. Xuwqtw says

    buy buspar for sale purchase buspar online cheap order oxybutynin 2.5mg generic

  20. Pdecgn says

    terazosin without prescription leflunomide 10mg for sale azulfidine 500mg drug

  21. Mjgeji says

    buy alendronate 70mg generic oral panadol pepcid canada

  22. Irrogu says

    benicar pill verapamil us purchase acetazolamide pills

  23. Uzoipf says

    tacrolimus 1mg tablet buy tacrolimus 1mg pill buy ursodiol 150mg for sale

  24. Reaexq says

    imdur 20mg for sale order telmisartan for sale telmisartan without prescription

  25. Xyjwmn says

    buy bupropion 150mg purchase strattera pill quetiapine 100mg pills

  26. Ywasfx says

    buy molnunat generic order cefdinir sale order lansoprazole 15mg sale

  27. Vtqcvf says

    sertraline 50mg canada order zoloft 100mg viagra 50mg over the counter

  28. Yezicq says

    buy salbutamol 100 mcg online sildenafil canada cheap sildenafil generic

  29. Rhewod says

    tadalafil 20mg brand sildenaflex viagra alternative viagra generic

  30. Namagg says

    cialis 10mg oral order cialis 5mg generic order amantadine pills

  31. Gbhiwq says

    order naltrexone online abilify 30mg usa order abilify 30mg online cheap

  32. Vxarjx says

    buy medroxyprogesterone 5mg without prescription provera 10mg pills order cyproheptadine 4 mg online

  33. Wodxen says

    buy provigil without prescription modafinil 200mg uk ivermectin tablets order

  34. Uwgbtp says

    order luvox 100mg generic duloxetine without prescription cheap glucotrol

  35. Liezgy says

    isotretinoin 10mg uk buy isotretinoin 10mg generic prednisone 5mg uk

  36. Vknvns says

    azithromycin order online gabapentin 100mg cheap buy neurontin 800mg without prescription

  37. Gbwedp says

    order generic cialis buy cialis 10mg without prescription viagra 100mg cost

  38. Prlqgu says

    buy lasix 40mg online cheap doxycycline 100mg pills generic hydroxychloroquine 200mg

  39. Lpujlh says

    tadalafil 20mg usa anafranil usa order clomipramine 50mg online

  40. Oglvcn says

    order chloroquine 250mg sale cost olumiant 2mg olumiant generic

  41. Aedvrx says

    buy sporanox 100 mg order generic tindamax 500mg tindamax online buy

  42. Omrzpz says

    brand glycomet 500mg buy cialis 5mg generic buy cialis tablets

  43. Blpimi says

    buy zyprexa 10mg pill valsartan 80mg pill diovan 80mg sale

  44. Thjksf says

    buy amlodipine 10mg generic sildenafil pills 25mg cialis 40mg tablet

  45. Ylgmmz says

    order clozapine 50mg for sale order combivent generic buy decadron 0,5 mg pill

  46. Ckauqz says

    viagra medication order viagra 50mg online cheap lisinopril 2.5mg tablet

  47. Dhptgo says

    omeprazole 20mg for sale cheap term papers best online casinos that payout

  48. Pxwliz says

    buy linezolid 600 mg generic casino play hollywood casino

  49. Pknwaz says

    metoprolol 50mg cost order vardenafil 20mg for sale order generic vardenafil 10mg

  50. Nztqna says

    buy dissertation online blackjack online poker game

  51. Lxaqes says

    vardenafil 20mg pill fda medrol medrol oral

  52. alanya escort says

    I like the efforts you have put in this, regards for all the great content.

  53. Yjoull says

    assignment website pre written essays for sale sildenafil 100mg tablets

  54. Ngmvym says

    clomiphene ca online black jack online casino usa

  55. Dvdhdq says

    cialis pill buy cialis 40mg generic order viagra 50mg pill

  56. Nfkwxz says

    buy triamcinolone 4mg pill desloratadine 5mg ca purchase clarinex generic

  57. Ltqnhn says

    priligy 90mg without prescription order dapoxetine pills synthroid online order

  58. Lvsfcv says

    cialis pills 5mg viagra overnight shipping usa viagra sildenafil

  59. Rcgjur says

    xenical oral purchase acyclovir without prescription order zovirax 400mg without prescription

  60. Otjfzu says

    cialis overnight shipping usa us cialis buy clopidogrel generic

  61. Kgqxve says

    zyloprim order online order allopurinol 300mg zetia drug

  62. Bwywzh says

    order methotrexate for sale methotrexate 5mg tablet buy metoclopramide for sale

  63. Trvatt says

    motilium 10mg brand buy domperidone 10mg for sale order generic cyclobenzaprine

  64. Jioqgu says

    losartan order online topiramate 200mg us topamax 100mg brand

  65. Apbgoc says

    brand baclofen 10mg toradol pill purchase toradol online

  66. Gxvkjo says

    order sumatriptan 25mg online purchase dutasteride for sale dutasteride over the counter

  67. Cjhkad says

    oral colchicine generic colchicine online casino slots no download

  68. Igpccg says

    buy zantac 300mg without prescription order celebrex 200mg online buy celebrex 200mg pill

  69. Mnbqge says

    real poker online casino online roulette free play for fun

  70. Btjenr says

    order tamsulosin 0.2mg pill buy tamsulosin 0.2mg online cheap aldactone 100mg canada

  71. Nntxzp says

    cheap tadalafil for sale oral ampicillin ciprofloxacin 500mg cheap

  72. Teahgn says

    simvastatin 10mg ca zocor for sale order propecia 1mg generic

  73. Lckeso says

    buy flagyl 200mg without prescription bactrim 960mg oral buy bactrim 960mg online

  74. Thkecc says

    purchase fluconazole without prescription sildenafil 100mg pills for sale viagra fast shipping

  75. Wnvorl says

    keflex 250mg cost generic cleocin erythromycin 500mg pill

  76. Jdorrh says

    order tadalafil 20mg without prescription cialis pill overnight delivery viagra

  77. Fyqmzv says

    viagra 100mg brand viagra order purchase tadalafil

  78. Auywmg says

    cefuroxime pill buy ceftin 500mg online cheap brand robaxin 500mg

  79. Isinbm says

    play roulette real money casino online cialis 40mg cheap

  80. Qjykkf says

    desyrel 50mg brand buy trazodone aurogra sale

  81. Wssxxo says

    pay for dissertation cheap essay writing ivermectin 6 mg pills for humans

  82. Fvwkmh says

    sildalis ca lamictal 200mg tablet lamotrigine without prescription

  83. Wkdxts says

    brand sildenafil viagra 200mg for sale tadalafil 5mg brand

  84. Yaqhql says

    real money online casino medicine erectile dysfunction buy cialis 10mg

  85. Wnkidg says

    buy generic zithromax 250mg azithromycin brand gabapentin 100mg generic

  86. Rtjsmo says

    casino play real money casino online provigil 100mg without prescription

  87. Qiagro says

    order lasix 40mg online buy doxycycline pill hydroxychloroquine 400mg price

Leave A Reply

Your email address will not be published.