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Opinion: The Easterly winds and why there’s plenty to be optimistic about – Steve Reece

This week’s industry opinion comes from Steve Reecean expert toy and game industry consultant at Kids Brand Insight and Toy Team India. In this latest dose of industry insight, Reece talks us through why there’s still much to be excited about from the toy industry – once all of this blows over…

After a tough couple of years for the toy industry, 2020 has begun in an equally challenging way. Q1 should be positive with late movie releases in 2019 for the much anticipated Frozen II and final instalment of the Star Wars trilogy of trilogies spilling into early 2020.

The challenge though appears to be getting stock for Q2 due to the corona virus and resultant disruption. And that disruption is considerable.

Chinese New Year has always been a thorn in the side of the toy business coming as we gear up for final retail listings for the back end, and as we ramp up for the brief sales spike around Easter. Yet this year the delay to production restart will have a tangible effect on the global economy and will cause problems for our retail customers and those of us who have impending promotions or summer season products.

On a brighter note things could be worse. Overall our industry is heavily reliant on the last few months of the year, and presuming China gets back up to normal speed at some point soon this shouldn’t impact on production of stock and delivery for the critical back end of the year. Hopefully this virus will blow over and things will return back to normal as soon as possible.

The corona virus was put into context for me by a question I was asked a few times during toy fair. Due to my work with Indian toy factories I was asked whether the virus had reached India and if it was having a significant effect there. After bluffing my way through answering that question a few times, I contacted several factory owners and factory staff in India. The best reply which did put the tendency of the media to become hysterical about these things in context was that as India had more than 100,000 cases of leprosy reported every year, this virus would have to go a long way before any one paid it much attention.

As we head into the heart of 2020, the outlook remains challenging, and not just due to the impact of the corona virus. Retail remains tough as hell. Consumer demand is softer than we might like it to be in some key markets and some key categories.

Moreover, the total toy market size looks likely to be down in 2020 due to a weaker movie slate versus previous years. There are always winners and losers though, and plenty of business still to play for, and in the end kids still want toys and parents still use toys to get kids off screens, so while 2020 might be another challenging year, there are tougher industries to be in right now.

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