Industry Analysis

Overview of China’s Toy Retailing Market

The one-child policy in the past played an important role in the fast development of the toy retail industry in China, as parents were willing to spend more money on their children. Even though the current market growth rate has slowed down due to the global economic downturn, the outlook for the toy retailing market in China is optimistic considering the higher disposable income per capita, more Chinese customers being willing to trade up to more expensive toys, in addition to the relaxed population control policy, with more potential end-users in the market. Within traditional toys and games which include electronic toys, construction toys have posted the strongest performance in recent years as parents view them as a tool for developing children’s creativity and concentration.

The total market size of traditional toys and games retailing in China increased from CNY50,098.5 million in 2012 to CNY69,346.7 million in 2016, seeing a CAGR of 8.5% for the period 2012-2016. The total market size in China also accounted for a higher portion of the world’s total traditional toys and games retailing valued from 9.7% in 2012 to approximately 12.4% in 2016. Among the traditional toys and games, the total market size of construction toys increased from CNY2,810.7 million in 2012 to CNY6,871.6 million in 2016, which accounted for a CAGR of approximately 25.0% during the period.

According to the National Statistics Bureau, per capita expenditure spending on traditional toys and games increased from CNY37.0 in 2012 to CNY46.9 in 2015. Meanwhile, the per capita expenditure on construction toys increased from CNY2.1 in 2012 to CNY3.9 in 2015. The increase in both per capita expenditure on traditional toys and games as well as construction toys indicates the growing consumer demand for toys and games.

Market drivers

The relaxation of the two-child policy provides more opportunities for toys and games industry

The Chinese government announced the termination of the one-child policy in 2013 and began to fully implement the two-child policy under the 13th Five-Year Plan in 2016. With more new babies born in the coming years, the need for toys and games is expected to consequently grow, which will drive the market growth of the overall toys and games industry in China.

The emergence of Internet retailing with more foreign brands introduced into China enhances the growth of toys and games in China

Due to the rapid development of the online retailing platforms, Chinese consumers are increasingly more accustomed to shopping on online retailing platforms such as Tmall,, Amazon, etc. in addition to their shopping habits of visiting traditional retail channels such as department stores and independent small groceries. The comparatively appealing retail price and convenience without geographic boundaries on the online retailing platform win more consumers’ trust. Additionally, some foreign toy and game brands have established their own online flagship stores to educate Chinese consumers and bring new consumer experience, which leaves more growth space for the toys and games market in China.


The sales of traditional toys and games is expected to reach CNY92,114.8 million by 2021, seeing a CAGR of 5.9% for the forecast period (2017-2021). The demand for traditional toys and games will remain strong, especially for the construction toys as they encourage children to establish playing experiences both psychologically and physically, which means Chinese parents are willing to purchase these products to develop their children’s creativity and concentration. Despite the global economic slowdown, the outlook of the toy retailing industry in China is expected to see ongoing growth due to the increasing disposable income, progress in urbanization, and the more relaxed population control fully implemented in 2016 which enables more couples to have two children, leading to an increase in the pool of end-users in the toy retailing market in China. In the meantime, the market size of construction toys will expect to reach CNY 15,758.5 million by the end of 2021, with a CAGR of 16.9% over the forecast period (2017-2021).

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