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Is Nearshoring The Future Of Board Games Manufacturing?

Is Nearshoring The Future Of Board Games Manufacturing?

‘Nearshoring’ is not a new thing in the board games business. A surprisingly large amount of the market is made up of games manufactured in or near that particular country or region, and has been for decades. That being said though, China has attracted its own significant share of the board games production market due to its position as the leading global toy manufacturing hub. It has often been easier for toy companies with Hong Kong and China offices to consolidate toy shipments with some games and puzzles from nearby factories.

Over the past decade, cost inflation in China has seen cost competitiveness of board games manufactured in China become less sharp overall. There is no doubt that some of the best board games factories in the worlds are in China, but the cost advantages of manufacturing games and puzzles in China and then shipping them across the world has diminished over time. This has led to some board games companies adopting a ‘nearshoring’ strategy, whether that’s in Europe or America.

There are though two major reasons why manufacturing of games and puzzles will continue to be significant in Asia:

Firstly, the rapidly growing consumer economies of Asia offer really good growth prospects for games and puzzles companies over the next decade. China’s own board games market is growing, albeit with plenty of challenges to overcome to get to market and to stay in market profitably. India is also a fast growing consumer market, although it is starting from much further back today, but has a similar population to China i.e. c. 1.4 billion people, India’s games and puzzles market is likely to see double digit growth across the next decade at least. Therefore, for those distributing their games into these markets, a ‘nearshoring’ strategy will actually be to continue to produce in China or even India.

The second factor leading to a significant segment of board games manufacturing remaining in Asia is the diversification process which is underway for the toy manufacturing sector. For the last five years, and most probably for the next five years, toy companies (big and small) have been shifting some production out of China and into Vietnam and India especially. Therefore, for all the same reasons as it made sense before to manufacture games and puzzles in China and then to consolidate them on to the same boat as a shipment of toys, it makes sense that Vietnam and India will become fairly significant games and puzzles manufacturing hubs.

So yes, nearshoring is going to grow, but perhaps not in the way we might expect.

 

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