A week ago, I wasn’t aware of Yantian Port in Shenzen. I have subsequently found out that it is the largest single container terminal in the world, responsible for handling around 25% of China’s trade with the USA, as well as being an important staging post for China to Europe shipping. The reason I now know so much about Yantian is because it was forced to close last weekend after a Covid outbreak was detected. The port partially re-opened earlier this week, but it was certainly not back to full capacity straight away, and a backlog had already built up while it was shut. In a year when there have already been shipping delays and prices rising steeply, it was the last thing anyone needed – it never rains, it pours.
It does, however, serve to remind us that we are not quite out of the woods yet when it comes to Covid. China, Hong Kong and much of Asia seemed to have got the problem largely under control, but inevitably there will be flare ups like this for a while yet – illustrating that even the smallest of ripples in China can reverberate around the world.
Staying in the Far East for a moment, talk has recently turned to potential trade shows and buying trips for the autumn period. Eolo’s Alex Prieto recently conducted a survey on LinkedIn, asking people where they were planning to visit in September and October. The fact that Hong Kong came out on top (closely followed by Distoy, LA and Dallas in that order) surprised me, not least because my understanding is that Hong Kong is likely to remain off limits to international travellers for a while, unless they are prepared to submit to the reputedly hideous ordeal of 21-day quarantine. I would caveat that statement by saying that there is no official confirmation that the quarantine requirement will not be lifted by the autumn.
However, there are a few things to keep an eye on (courtesy of a couple of well-positioned local sources): if quarantine is lifted, it may be gradual, with countries that have a high vaccination rate given priority. A Hong Kong trip for buyers from UK, the US and Israel isn’t quite the usual October demographic. Second, much depends on Hong Kong’s own vaccination programme improving: a few weeks ago, it was announced that the territory was on the verge of discarding three million unused doses of the vaccine, due to poor take-up from locals. They have even launched a competition for people who have been vaccinated, with the prize of a £1m apartment, to encourage more people to take it up (this is not a joke). You might have thought that the opportunity to avoid a most unpleasant illness (or worse…) might have been sufficient incentive, but given the dismal progress so far, apparently not.
Part of the reticence has been attributed to local people seeing little evidence of Covid as they go about their daily lives. This will also potentially make it harder for Hong Kong to open up its borders: case numbers are so low that any increase could be seen as a failure. Oh, and one more thing: the Winter Olympics is being held in Beijing in February ’22 – one person has suggested to me that if Hong Kong borders have not opened by late summer, it may be the case that they stay shut until after the Olympics. That is just his considered opinion, but it is worth keeping an eye on the situation over the coming weeks.
Of course, it has been 15 months since the last trade fair / buying trip, and thankfully the toy community has proved remarkably adept at coming up with ‘workarounds’ to keep the wheels turning in the absence of events. I suspect that when events are able start up again (hopefully very soon, and certainly for Toy Fair Season ‘22), it may be the more entrepreneurial, privately-owned retailers and suppliers that will be the most enthusiastic, seeking as ever to gain that crucial competitive advantage – I wonder if it may take the more corporate organisations just that little bit longer to return to the fold? And could we also see a slightly rationalized calendar of events? As ever, I have no doubt that the strongest will survive, and maybe even find themselves strengthened as a result…
Speaking of ‘survival of the fittest’, B&M unsurprisingly posted a stellar set of financial results for the past year, with sales and profits climbing, no doubt aided by its stores being able to stay open during all the lockdowns. Higher general merchandise sales helped improve gross margins too – a timely reminder of the value of non-food sales to multi-channel retailers.
Elsewhere, there have been plenty of other ‘good news’ stories across the toy community: Toytown opened its largest store to date in Merry Hill; Goliath has been on the acquisition trail again, bringing Fun Promotion into its growing portfolio, while Will Abigail has set up a new sales agency – WA Agencies. Our online recruitment section continues to add numerous new vacancies on a weekly basis, and with our first client visit in over a year under our belts, it somehow feels as though a semblance of normality is returning – slowly, but surely.
Finally, next week sees the start of the Toy Trust’s latest fundraising event – Around the World in 80 Hours. It’s a fantastic initiative, raising money for two very worthwhile charities – myAFK and Handicapped Children’s Action Group – which provide essential mobility to children who would otherwise not have access due to long NHS waiting lists. Funds will provide specialised trikes, bikes, wheelchairs and walking aids as well as other important mobility apparatus for deserving children. Good luck to all those taking part, and I hope everyone across the toy community will get behind it so that it raises as much money as possible.