Is China’s dominance of the children’s toy market in Latin America waning?

China is the world’s leading toy manufacturer, with more than 10,000 manufacturing companies producing almost three-quarters of the world’s toys, generating exports of USD 46.12 billion in 2021. However, China’s role in international manufacturing is changing as trade struggles with the US continue, the country’s economic development makes labour more expensive, logistics costs are rising and supply chain disruptions reduce the efficiency of manufacturing in China and shipping globally. 

The lion’s share of China’s toy exports, 29.2%, go to the US, followed by UK, 4.5%; and Japan, 3.9%; Mexico stands in seventh position, with a 3.1%. Other countries in Latin America like Brazil where 75.80% of toy imports come from China, and Ecuador, where Chinese imports account 78% of the country’s toy market, according to Ecuador’s central bank (BCE), continue to heavily rely on Chinese toy imports, but could this be about to change? 

One driver behind China’s market share dominance is a lack of competition from domestic toy manufacturers who, in most countries, cannot meet consumer demand. But there are signs of change emerging: Brazil has experienced significant growth in domestic toy production following the COVID-19 pandemic, with 14% growth to revenues of USD 1.5 billion. 

An economic adviser to Mexico’s Ministry of Economy thinks domestic toy production could start to increase, “Around 80% of toys in circulation in Mexico come from China but toy prices from China have increased due to rising inflation and increased logistics costs. We have some local brands that do well such as Mi Alegria and Distroller and Mattel produces here so we could do much better with the right investment.” 

“Toy prices from China have increased due to rising inflation and increased logistics costs.”

Economic adviser, Ministry of Economy, Mexico

Mexico is increasingly positioning itself as a nearshoring manufacturing hub and this includes toys: earlier this year, Mattel announced a USD 50 million investment to expand its manufacturing plant in Nuevo León. With soaring shipping costs from distant countries, manufacturing centres in closer-to-home regions are becoming more attractive. Supply chain diversification and growing environmental concerns also predict a shift in manufacturing trends which may benefit Latin American countries over the next decade. 

Domestic toy production in Argentina accounts for something like 40% of the total with 60% imported and not only from China.”

Executive Toy manufacturer, Argentina

The domestic toy industry in Argentina is already quite strong and is set for further growth, explained an executive of a toy manufacturer, “Domestic toy production in Argentina accounts for something like 40% of the total with 60% imported and not only from China. The domestic toy industry in Argentina is very strong and competitive, so there is plenty of room for growth. Furthermore, many of the inputs used to make toys are produced domestically, such as polypropylene and polyethylene, although there is some fear that there may eventually be a shortage of others that are imported. Finally, domestically produced toy prices have increased below inflation, while everything bought from abroad has suffered a sharp increase as a result of the taxes that have been generated for purchases abroad.” 

Important Notice
While the information in this article has been prepared in good faith, no representation, warranty, assurance or undertaking (express or implied) is or will be made, and no responsibility or liability is or will be accepted by Deheza Limited or by its officers, employees or agents in relation to the adequacy, accuracy, completeness or reasonableness of this article, or of any other information (whether written or oral), notice or document supplied or otherwise made available in connection with this article. All and any such responsibility and liability is expressly disclaimed.
This article has been delivered to interested parties for information only. Deheza Limited gives no undertaking to provide the recipient with access to any additional information or to update this article or any additional information, or to correct any inaccuracies in it which may become apparent.

Most recent in Consumer

Thinking outside the (recycled) box 

Navigating sustainability in Latin America’s packaging industry. 


The impact of cross-border spending sprees on Uruguay’s economy.

LatAm’s food crisis

Unprecedented food prices drag more people in Latin America into food insecurity.

Dairy difficulties

Insurmountable barriers frustrate the growth prospects of Latin America’s dairy producers.

Nearshoring: an ESG opportunity?

Can Latin American nearshoring deliver economic benefits and address ESG challenges?

Smells good

Latin America's fragrance market sees strong post-pandemic recovery and an increase in regional production. 


Remittances to Mexico reach record highs as fintechs and Oxxo circle the opportunity.

Favoured food

Mexico promotes cheap food imports and privatizes health checks to reduce inflation and tax, what could go wrong?

Coming of age

Uruguayan wine exports are growing but can they compete with New Zealand and South Africa?

Tourist hotspot

Dominican Republic’s foreign visitors exceed pre-pandemic levels.