China’s One Child Policy Reversal Set To Grow Global Toy Market By 4%?

China’s One Child Policy Reversal Set To Grow Global Toy Market By 4%?

The major announcement that China has officially ended it’s decades old ‘one child’ policy has to be good news for the Global toy industry. Couples will now be allowed to have two children without fear of censure or punishment.

A quick and not very in depth internet search suggests there are around 150million 0-9 year olds in China. So when we begin to look at all those families having the freedom to have a 2nd child, we can see that the potential for a huge increase in births in China, and therefore a huge increase in toy consumers is huge!

The statisticians out there will no doubt have a field day with projections of births etc., but the rules on 2nd children had already been loosened a little while back, so that 150m already included some second children so I’m not for a minute suggesting that we’re going to get an additional 150 million kids…but if we had an increase of 1 in 3 we’d get to an extra 50m kids in China.

Globally, there are something akin to 1.2 billion kids from 0-9 years of age. So an extra 50m would be an increase in the global population of toy consumers of 4%. In an industry that is forever looking at trends upwards or downwards of a few percentage points, this should be MASSIVE news for the toy industry, yet it’s hardly been mentioned by toy trade media this week bizarrely.

If each of those 50m kids had $20 USD spent on them each year on average that’s an extra $billion of sales, if it were $40 USD per child that’s a whacking great $2billion of incremental toy sales, which to put it in perspective is nearly half of Hasbro’s annual global sales!

For sure we’ve used some dubious statistical projections and extrapolations here, but all such predictions are nearly always wrong anyway regardless of method of calculation, the reality is that this is a strong upside indicator for global toy sales for the next decade or so.

Bearing in mind China is now the 2nd biggest toy market in the world and that many toy companies are ever more focused on tapping into the Chinese domestic toy market, this week’s change in policy by the Chinese government should really have set the cat among the pigeons in a good way!

P.S. While the outlook looks good for China’s domestic toy market, there is still a definite trend towards manufacturing in India and other Asian markets outside China, to read a recent article we published on this, just click here: https://www.toyindustryjournal.com/?p=174