For decades, the US toy industry has enjoyed an annual migration. A migration that took us from Dallas in October to Hong Kong in January and to New York in February. The rest of the world’s toy industries have experienced a similar trade show travel pattern involving national shows and the Spielwarenmesse in Nuremberg.
However, the last two years have shifted and possibly broken this paradigm we have taken for granted as the critical path to a successful year. Ground zero for disruption has been Hong Kong, a city loved by many of us as the toy industry’s home away from home.
Hong Kong has gone through a series of traumas over the last two-plus years. Social unrest led to unprecedented rioting. What was once seen as a serenely peaceful environment for foreigners became fraught with concerns around personal safety.
Then came the coronavirus. Due to a zero-tolerance policy towards the virus, Hong Kong has essentially cut itself off from the rest of the world. Here is how New York Times reporter Alexandra Stevenson describes in her article, “Zero-Covid Policy Shakes Hong Kong’s Economy and Its ‘Soul.'”
In the process, a place once known as “Asia’s World City” has cut itself off from the outside world, crushing an economy reliant on international trade at a time when the global supply chain is already deeply strained.
And Hong Kong’s citizens are leaving. According to Bloomberg, Hong Kong’s population has fallen to its lowest point since 1961. (That’s a long time ago. How many of you were born after 1961, raise your hands. There’s a lot of you).
Sadly, Hong Kong is no longer the city we knew two years ago. Once the pandemic is over, will the toy industry, no longer used to travel, rush back to the new Hong Kong for meetings? It is questionable based on the world’s current social, political, and health environment..
The toy industry needs China. It has a toy manufacturing capacity that is exponentially greater by magnitudes than any country in the world. If toy buyers won’t go to Hong Kong, where will they go? That city is Los Angeles.
LA and Southern California are home to headquarters or showrooms for Mattel, The Walt Disney Company, MGA, JAKKS, Moose, Bandai, Playmates, Farout Toys, Spin Master, Hasbro, Skyrocket Toys, Maui, Aurora, Funrise, and more. That makes for one big gravity field; a gravity field that will attract buyers and sellers.
And they are coming. El Segundo is turning into what some are calling the Silicon Valley of toys. Numerous companies are taking showroom space around the Mattel headquarters. If the buyers are there, the sellers will follow. Hong Kong based toy companies will, I believe, therefore move their showrooms to Los Angeles.
There is risk in all of this to Toy Fair in New York. An industry that has forgone two years of Toy Fairs may be ready to make some big changes. Those who show in LA. may see New York Toy Fair as redundant. Therefore, there is cause for The Toy Association to establish a strong presence in Los Angeles so that the shows complement rather than compete.
I have loved the ways things were. Some of the best experiences in my life occurred in Hong Kong and New York during the fairs. However, change is inevitable, particularly now. The new normal is beginning to reveal itself. Keep your eye on it.