Rising Costs of Materials and Labor Affecting Toy Prices
Toymakers in China are starting to charge more as they are struggling to battle inflation in China as it rises to a three year high of 5.4 percent. The makers of Hasbro’s Barbie dolls and the Transformers brand already raised their prices when Chinese factories passed the costs of materials and labor onto their company.
One analyst said that a price hike is a consequence, when Chinese toymakers are dealing with increases in labor, raw materials and exchange rates hikes. Consumers in the US might face higher prices when buying gifts for Christmas this year. One Chinese company Li and Fung Inc., which supply toys to retailers, including Walmart and Target will be passing their entire factory cost to their costumers. When this happens, prices for toys will be increased. Retail store Toys “R” Us is already prepping their stores for any price increases on some toys in their stores.
According to the China Toy Association, there are aroud 8,000 toy companies in China generating US$ 2.6 billion in exports in toys alone. But the industry has suffered after four months of decreased growth as surging labor costs and a labor shortage have decreased capacity. This year during the Canton Toy Fair, organizers reported only a 5.8 percent increase, the weakest growth since 2009. Orders from Europe were only 14 percent, United States was 12 percent. Order from Japan, Hong Kong and other Asian countries were also down.