[FLASH EDITION - #31] 🎄🎅 Christmas 2025: What Toy Procurement Teaches Us

🧸 Why toys dominated Christmas 2025 (again)

The numbers speak for themselves: 3 billion toys sold annually in the US, generating a total economic impact of 155.7 billion dollars according to The Toy Association. The global market reached 121.3 billion in 2025, with 7% growth in dollar terms. But pay attention: growth in units sold was only 3%. The rest? Pure inflation, passed on from tariffs to the end consumer.

Christmas 2025 confirmed what procurement managers have always known: toys are “recession-resilient.” Even when family budgets collapse, parents sacrifice other expenses rather than disappoint their children. That is what saved the sector: not strategy, but the emotional nature of the product.

⏱️ Inside toy Procurement: when timing is everything

Toy Procurement is a race against time built on three pillars: geographic sourcing, lead time, and risk management. In 2025, all three broke down.

Sourcing: China still produces 78% of the toys sold in the US. Major players such as Mattel and Hasbro have spent years diversifying: Mattel reduced its Chinese production from 50% to 40% in 2025, focusing on Indonesia, Thailand, Malaysia, and Mexico. Hasbro cut its share from 90% in 2012 to 50% in 2024, with a target of under 40% by 2026. But SMEs, which represent 96% of the sector, have neither the capital nor the time for these pivots. The result: up to 50% of small and medium-sized businesses risk closure.

Lead time: Traditionally, Christmas Procurement begins in January-February, with orders placed by May to arrive in August-September. In 2025, that timeline collapsed. Data shows that October imports, traditionally the peak, were 15% lower than last year. Retailers, terrified by uncertainty over tariffs, delayed orders until September-October, demanding just-in-time deliveries. For buyers, this meant compressing 9 months of planning into 2-3 operational months.

Suppliers and the cost/risk trade-off: The “China-plus-one” strategy - shifting production to Vietnam, India, or Mexico to reduce exposure to China - imploded when Trump imposed 46% tariffs on Vietnam in April 2025. Those who had bet on Vietnam as a Plan B found themselves facing unsustainable costs. Mattel, more forward-looking, had built a 200,000-square-meter “super-plant” in Mexico, near its second distribution hub in Texas. But Mexico was also hit with 25% tariffs.

The final trade-off? Absorb the costs or pass them on to the consumer. The second option won: retail prices rose by 25-30%, with products that cost 10 dollars in 2024 being sold at 14.99 dollars in 2025.

🖼️ Meme of the day

🎄What pushed Christmas 2025 into crisis

It was not only a matter of costs. Christmas 2025 exposed three structural fragilities in toy Procurement:

The illusion of alternative manufacturing capacity: Vietnam has only 160 toy-export factories compared with China’s 10,000. India, Indonesia, and Thailand lack both the infrastructure and the workforce to absorb massive volumes in a short time. Building new facilities takes 2-3 years.

Dependence on critical materials: Toys use plastics, electronics, and textiles. Tariffs of 10-30% on these materials hit the entire supply chain. When insulating foam or seats for a Boeing aircraft are missing, a 100-million-dollar plant stops. When electronic components for a 15-dollar toy are missing, the result is the same: production stops.

The collapse of trust between links in the supply chain: Retailers no longer trusted importers, importers no longer trusted manufacturers, manufacturers no longer trusted raw material suppliers. The result: canceled orders, lean inventory pushed to the extreme, and empty shelves in December. As Hasbro CEO Chris Cocks said: “The second half is a bit of a black box. We will be cautious on inventory.”

🗝️ The lesson for CPOs and buyers

Christmas 2025 in the toy sector is a perfect case study for every procurement manager. It is not a success story, but a survival story. The companies that held up - Mattel, Hasbro, LEGO - did so because they had started diversifying 3-5 years earlier, when no one was yet talking about 145% tariffs. SMEs, which had neither capital nor time, were swept away.

The lesson? Procurement is no longer done year by year. It is done by geopolitical scenarios. Those building resilient supply chains today for Christmas 2027 will win. Those who wait for tomorrow’s news before moving will already have lost.

🔗 Sources: SCMR, Fortune, Supply Chain Dive, Circana

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