I have spent this week in Hong Kong, although I will be back in the UK by the time you read this Blog. I may or may not actually be awake (a week of atrocious sleep caused by jetlag takes its toll), but I will at least be on home soil.
When I flew out last Friday evening, I posted on LinkedIn that I would be heading here for the first time in four years, and I had numerous comments asking me to “tell it how it is,” which I intend to do. I got the distinct impression from some of the comments that US-based companies were rather hoping I would reinforce their perception that the trip is now surplus to requirement, while perhaps some people in the UK & Europe were hoping I could offer a more optimistic take.
I came with no pre-conceptions – all I can do is to reflect on what I have seen and heard over the past week, and then you can take from that whatever you choose to, and specifically what is relevant for your business. Of course, people who made the trip are maybe more likely to adopt more of a ‘glass half full’ perspective, while those who didn’t perhaps want to hear that they were right not to come. I will say that Hong Kong in January isn’t for everyone – maybe it never should have been.
That said, the majority I have spoken to this week seem perfectly happy that they came. Unsurprisingly, it is markedly different to pre-pandemic days – there are far fewer western faces around, both in TST and at the Hong Kong Toys & Games Fair. US visitors in particular have been thin on the ground (although interestingly, the ones that did come have been some of the most enthusiastic about their experience). There were far fewer showrooms open in TST, with many companies saying that although they doubled the number of appointments compared to last year, they would need to double again to get even close to 2019 levels.
But, interestingly, there are some positive interpretations of the footfall situation: many told me that meetings were easier to secure due to less competition, went on for longer (very few people rushed round showrooms in 10 minutes because they were running late for their next meeting) and the people who were here were serious, not just browsing. As a result, the quality of meetings has generally been felt to have been meaningful – if retailers or distributors committed to making the trip, they did so for the right reasons.
It could also be said that before Covid, certain retailers and toy companies came here largely out of FOMO, or – let’s not beat about the bush – to have a good time with their customers (and not to let their competitors have their customers all to themselves). Visitors sometimes included companies whose FOB range consisted of a dozen SKUs which were all also available domestically (or in some cases who didn’t even have any FOB offering at all). I’ll not go so far as to use the word ‘jolly’, but you get my drift. That doesn’t tend to happen anymore, taking the January Hong Kong trip back to its original roots as principally an FOB buying destination. To illustrate my point, Smyths had a team of 19 people here, but were apparently not making appointments with UK / European domestic suppliers – just Far Eastern vendors and factories.
Also here from UK retail were The Entertainer (now with added Tesco aisles to fill of course), Toytown, Home Bargains, Ken Black, The Works, TK Maxx, play-room and Menkind. Further afield, there were strong contingents from Australia, South America, Middle East, Europe (Greece, The Nordics, Germany, Turkey, Hungary, Netherlands were all mentioned) – and naturally, it’s an essential destination for the wider Asian market. If you want to see retailers or distributors from Asia, this is still the optimal place and time to do it.
So, who wasn’t here? US retailers and suppliers were conspicuous by their absence – and I don’t see that changing dramatically – LA is their new spiritual home. That said, I did find it both interesting and faintly amusing to hear that neither Walmart nor Target have confirmed autumn winter selections yet. But…but…people said they wouldn’t ever come here again or visit any other Q1 show because everything would have been finalized in November….and remember, this is after both LA and New York took place in September last year. Perhaps it just goes to show that selection timing is not cast in stone in perpetuity and can flex according to market conditions.
Apart from the US contingent, when you also factor in fewer clearance people, a miniscule licensing / media presence, no domestic suppliers just here because everyone else was and the absence of a large percentage of the international distributor crowd who have also become devout LA disciples, the trip has been stripped back to its core essence… and some have said they believe this has made it a more focused, better event for them than it even was pre-pandemic. And what’s more, no-one needs to get here on 1st January or stay for two weeks anymore – a briefer trip works perfectly well, is kinder on the budget and helps make January marginally less hectic.
I know this may not be what some of you wanted to hear (and if you all pile back, it will make it less focused again), but from what I have been told this week, I genuinely believe the trip still has its place in the grand scheme of things. It’s not for everyone, and neither should it be. Supplier or retailer, all I would say is if it works for your business model, don’t be put off by voices on social media writing it off because it isn’t necessary for them. My gut feel says it will never get back to the level it was pre-pandemic, but I wouldn’t mind betting that there will be a few more people here next year.
I’ll finish off with a few quick non-Hong Kong nuggets. Talking point of the week remains The Entertainer / Tesco situation – as I suspect it will for quite a while. More on some of the issues being raised in next week’s Blog. I know I haven’t said much about Christmas trading, but I am still waiting for greater clarification – although anecdotally, I have heard both directly and indirectly that a couple of the key players are admitting that the final week bounce didn’t materialize – indeed, I gather trading was actually down. If so, I can’t say as I am surprised – the fact stores had an extra trading day is, frankly, irrelevant. If a family had £100 to spend on presents, they didn’t have £120 because there was an extra day’s trading – that isn’t how it works when money is tight I’m afraid.
Finally, thanks for all your lovely comments about our January issue – if you missed it when we first shared it on Monday, the main issue and Nuremberg supplement will make wonderful weekend reading, especially if you want to stay in the warm. With the London Toy Fair celebrating its 70th anniversary, we really wanted to capture the sense of affection the UK toy community has for the event and the important role it plays in bringing everyone together. I hope the issue gets you in the mood for the show, as it won’t be long before we all convene at Olympia – I look forward to seeing you all there.