Exports of playing cards and gambling tables from China are increasing — even as overall gambling supplies continue to follow a downward sales trend. Specifically, US$20 million worth of playing cards, or nearly 180 million decks, were shipped from January through May 2006 compared with 171 million decks worth US$19 million during the same period in 2005.
On the other hand, shrinking foreign demand for poker chips, the low-value, high-volume product that represents the bulk of China's gambling supply exports, has changed the entire industry.
Many manufacturers that produced only chips have been forced to close, while other makers have chosen to diversify their product lines to include more gambling and nongambling items.
Table suppliers, however, are actually boosting output and upgrading product quality in order to strengthen their market positioning and attract business in an increasingly competitive industry.
China makers are offering more upscale products to avoid intense price competition in the low-end market. Most new product releases are casino-grade models: ceramic poker chips, hardwood poker and blackjack tables and automated card shufflers with imported motors. Some of the larger companies are even aiming to increase exports of professional-use products to foreign casinos.
The following are some of the key trends we see in China's gambling supply manufacturing industry:
• Gambling supplies for home entertainment use will continue to be China's mainstay for the next several years. Although some makers will try to export more professional-use models to foreign casinos, most still lack the technology needed to meet the stringent manufacturing and security standards of casino-use gambling products.
• Many China makers will raise export prices in the next 12 months. Nonetheless, most companies will limit increases to 10 percent due to intense price competition.
• While most companies still consider the US a major export market, a number of suppliers have started to explore alternative markets in anticipation of slowing US demand. Shipments to the EU, New Zealand and Australia, therefore, will rise during the next 12 months. Playing cards, poker chips, gambling tables and automatic card shufflers dominate China's gambling supply exports. This report features these products.
Industry Overview
In 2005, China exported 776 million playing cards, casino-type entertainment and other accessories such as articles for parlor games worth US$319 million, according to customs statistics. In 2004, 616 million units worth US$277 million were shipped.
Despite the rise in overseas sales, the growth rates for export volume and value have slowed. In 2004, both volume and value increased nearly 60 percent from 2003, but between 2004 and 2005, gains were modest: 26 percent for volume and 15 percent for value.
It is important to note, however, that gambling supplies represent only a portion of a broad product category. Reports from industry makers confirm there is an overall weakening of gambling supply export sales.
Export sales declined further at the beginning of 2006. From January through May, China exported almost 245 million playing cards, casino-type entertainment and related accessories worth US$71 million.
During the same period in 2005, almost 280 million units worth US$97 million were shipped. This decrease in exports marks a 27 percent drop in value and a 12 percent drop in volume.
Fluctuating poker chip sales provide the most likely explanation behind the significant increase between 2003 and 2004, the low export value, high export volume trend from 2004 to 2005 and the 2006 slump in overseas shipments.
On the other hand, playing card exports continue to increase, although growth rates of this specific product have also slowed. In 2004, annual export value jumped 26 percent and volume 18 percent from 2003. Nonetheless, when compared to the period between January and May 2005, the same five months in 2006 show only a 4 percent gain in value and a 5 percent increase in volume.
Large card companies, however, are still spending big money to boost production capacity. For example, Shanghai Yuchen, which supplies promotional products to international brands such as Coca-Cola and Budweiser, expects export sales to increase more than 20 percent through 2007. The maker plans to improve efficiency by purchasing additional automated machinery to equip the unused half of its 150,000sqm factory.
Currently, poker and blackjack tables represent the fastest growing product line. Manufacturers prefer the higher prices these products command and plan to increase output. Hangzhou Conic, a small Zhejiang maker, expects table sales to increase more than 20 percent in the next 12 months and in response, will build a new factory.
As a secondary product line, automatic card shufflers have not experienced any major swings in export sales. Export numbers for shufflers remain steady.
Supplier Profile
Cixi Mingxin Plastic & Rubber Fty
Established in 1990, Cixi Mingxin specializes in manufacturing poker chips and chess sets but also offers silicone and plastic products, including spatulas, loaf pans and cookware lids.
In 2005, the company exported US$2.4 million worth of poker chips.
The US and the EU are its two biggest markets, absorbing 70 percent of shipments. Some exports also go to Canada.
All poker chips are shipped under OEM orders.
The silicone and plastic products, on the other hand, are sold domestically under the in-house Chonghu brand.
Cixi Mingxin is building a new factory that is expected to increase poker chip production by up to 50 percent. The facility will open by the end of 2006.
Products
Cixi Mingxin's poker chips are made of locally sourced ABS and clay composite. Clay composite is a mixture of 70 percent plastic and 30 percent clay. Ten percent of chip output targets the high-end segment. Chips are sold in sets of 100 to 500 pieces that also include two decks of playing cards and a dealer button. Approximately 70 percent of poker chip sets are packed in aluminum cases, while the rest are packed in wood cases.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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