The toy market is more than fun and games

The rates don’t sound like a lot of fun. But it is one of the hottest topics in the toy market of 2019.

Well, kidding, right?

The Trump administration is set to impose a 15% tariff on toys made in China on December 15. Currently, there are no tariffs on Chinese toys.

It’s hard to argue that the tariffs would protect US plastic toy manufacturers. With the notable exception of large rotational-molded toys which are too expensive to ship overseas, most toy makers moved overseas decades ago.

I don’t expect big toy companies like Mattel and Hasbro to seriously consider relocating a significant amount of work due to a 15% tariff. “Simply put, the toy industry is much more dependent on Chinese suppliers than most other US industries,” said Kathrin Belliveau, senior vice president of Hasbro.

What we’ll see instead will be higher prices for consumers.

Wait, there is more fun to come. The toy market is not just political. It is also a question of intellectual property. I’m talking about licensing characters and stories from movies, TV, YouTube, and video games.

This year, that means two new films from Walt Disney Co., Frozen 2 and Star Wars: The Rise of Skywalker, which hit theaters just in time for the Christmas shopping season. Buyers are already looking for all things Elsa, Olaf, Anna in retail outlets and online.

If the Star wars the film is a success – and who would bet against it? – also expect a last minute scramble on Rey, C-3PO, and Kylo Ren.

Hasbro CEO Brian Goldner told analysts last month that toys based on the two films are of critical importance to the company, which has gone to great lengths to keep the supply chain full.

Movies and toys have had a long and successful relationship. But toy makers don’t just want to license intellectual property to entertainment companies. The big trend today is actually the opposite: toy companies create their own characters and license them to movie studios.

The box office success of the Lego films was followed by other toy companies, with films based on Barbie, Hot Wheels, Transformers and more.

MGA Entertainment Inc. takes it a step further with its popular LOL Surprise dolls. The company came up with the idea of ​​capitalizing on popular social media videos that show children “unwrapping” toys. So he created several layers of fancy packaging, each with a surprise, with a plastic doll in the middle.

Hey kids, do you want to pretend you’re a social media influencer? Of course you do! LOL Surprise has a YouTube channel with 1.2 million subscribers.

All of these strategies help toy makers to resell toys, which is not easy in the age of smartphones and video games.

Loepp is editor of Plastics News and author of the Plastics Blog. Follow him on Twitter @donloepp.

About Lola C. Chapman

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