Jay Foreman, CEO of “Basic Fun!” has provided us with his observations and keen insights on Hong Kong and China. Jay turns his sites on the U.K. Toy Fair in today’s blog.
Well, the 2023 show season really has started. As you might have read in my last blog, there wasn’t much going on in Hong Kong…yet. The Wanchai show was about a third of its normal size, and attendance was light but respectable. Outside of a handful of folks from the SE Asia region, the Mody road market week didn’t happen this year. However, most folks I speak to think that at some point, Hong Kong will be back, at least in January next year.
The good news, however, is that the London show was on fire! The show was bigger than ever and, from what I saw as well attended as ever. The second hall was open for the first time, and many companies, from Funko to Moose and Character Options, were in the new wing, which is a mirror image of the main hall. The show is always super easy for everyone to get in and out of (despite ongoing construction to expand the venue) and easy to navigate. In fact, I would say London is the most efficient show any of us ever do. The stands are just a little small, especially compared to N.Y. or Nuremberg. That means you see the best of the best and have a manageable amount of extraneous product.
Everyone was upbeat, including and especially retailers. The discussion on the floor was that the Covid blowback at retail and the war in Ukraine caused the market in the U.K. and Ireland to slow down early in 2022, and the retailers pulled back a bit sooner than in the U.S. That, along with a postal strike in the heart of the holiday season, forcing shoppers to go out and shop in person meant less inventory stuck in the supply chain here. Everyone for sure understands the first half of the year is going to be touch and go, but all are hopeful and confident that we’ll see a rebound in the second half. All are sure ready to see things return to normal as soon as possible.
The word in China is that while China is seeing a Covid wave, it’s not expected to impact production. The factories will start to open at the end of the month after CNY, and there will be plenty of labor. In fact, I’m hearing may be too much labor this year! Clearly, the factories are light on orders now, and for the first time, I can recall the factories are quietly hoping the workers take their time coming back, which is really unusual. Typically they try to get workers back early so they can get production up and running quickly. Since there is still a lot of inventory in the global channel, there is no rush to get open.
The good news for those bringing in goods from China and moving them around the world, the supply chain is back in balance, and in fact, we are seeing the lowest rates for 40’ containers in recent history. The ports are clear, and while we are waiting to see the transport cost from the entry ports go down, we are seeing rates from China to LA at and below $1,500, down from over $20,000 same time last year. That’s great news for us all.
So, with that bit of good news, I wish all those exhibiting and heading off to Nuremberg the very best of luck and success at Europe’s biggest toy show. I won’t be there, so stay tuned for reports from Richard. Safe travels all, and see you at licensing show and NY Toy Fair in the fall. By the way, the show floor in NY is over 80% laid out and 93% sold so far. The show will be a sell-out, and retailers will be attending. I can also guarantee there will be no snow!