( ) Top 10 toy com­pa­nies in China (2014)

China Daily (Canada) - - DEPTH -

Though sur­prised to see the made- in-Viet­nam toys, Zhang ac­knowl­edged that his com­pany is con­sid­er­ing set­ting up plants in Viet­nam and neigh­bor­ing Thai­land be­cause of lower man­u­fac­tur­ing costs. His com­pany ex­ports 90 per­cent of its prod­ucts, and the US is its most im­por­tant mar­ket.

China is still the world’s largest man­u­fac­turer and ex­porter of toy prod­ucts, pro­duc­ing more than 70 per­cent of the global to­tal, ac­cord­ing to a 2015 re­port from in­dus­try re­searcher IBIS World Inc.

But that long-stand­ing dom­i­nance is fac­ing com­pe­ti­tion from low-cost pro­duc­ers. La­bor and raw­ma­te­rial costs also have been ris­ing in re­cent years, in­creas­ing pro­duc­tion costs, while the Chi­nese yuan ap­pre­ci­ated, af­fect­ing ex­port ac­tiv­ity. China’s eco­nomic slow­down and the grow­ing pop­u­lar­ity of video games over tra­di­tional toys are other chal­lenges to the in­dus­try.

Lon­don-based mar­ket-re­search firm Euromon­i­tor In­ter­na­tional es­ti­mates the main­land’s toy mar­ket pro­duced about 63.4 bil­lion yuan ($9.7 bil­lion) in sales last year, and is likely to reach nearly 70 bil­lion yuan this year. Sales in China are pro­jected to climb to 97.52 bil­lion yuan by 2019, ac­cord­ing to in­dus­try data.

Most toy-mak­ing com­pa­nies are small and have low profit mar­gins. IBIS noted that in­dus­try prof­itabil­ity has been de­creas­ing in re­cent years, fall­ing to about 4.2 per­cent in 2015.

Steady ex­pan­sion

De­spite chal­lenges, IBIS fore­casts that dur­ing the next five years, the toy-man­u­fac­tur­ing in­dus­try in China will ex­pand steadily, said IBIS. And the main rea­sons are the ex­pan­sion of the middle class and the elim­i­na­tion of China’s onechild pol­icy.

“We hope to get more sales from the change in the one-child pol­icy,” noted Zhang.

As China’s middle class grows, par­ents and grand­par­ents are in­creas­ingly turn­ing to prod­ucts that will move chil­dren out­side when play­ing with toys and games.

Prod­ucts that en­cour­age chil­dren to par­tic­i­pate in out­door ac­tiv­i­ties sold well in 2014 as out­door-ac­tiv­ity prod­ucts and sports toys, ra­dios, re­mote con­trol toys and ride-on ve­hi­cles ben­e­fited from this trend, ac­cord­ing to Clover Wei, se­nior as­so­ciate at Euromon­i­tor In­ter­na­tional.

“Par­ents are in­creas­ingly aware of the aca­demic work­load their chil­dren bear, and they be­lieve prod­ucts that re­quire chil­dren to play out­doors can ef­fec­tively re­lieve their stress,” she said. More­over, team­work and team spirit skills are also de­vel­oped through out­door ac­tiv­ity, sports toys, ra­dios and re­mote con­trol toys, added Wei.

For China’s in­creas­ingly large and wealthy ur­ban pop­u­la­tion, de­mand also is shift­ing from tra­di­tional and medium-end elec­tric and dec­o­ra­tive toys to novel, in­tel­li­gent toys and high-end plush toys, said Good­man.

“The in­dus­try’s top com­pa­nies, in­clud­ing Auldey, Blue Cat, Good­baby, MSD and Huawei, are in­vest­ing in more re­search and de­vel­op­ment to sat­isfy that de­mand. Toy com­pa­nies in the Pearl River Delta are also al­ter­ing their busi­ness strat­egy to em­pha­size other seg­ments of the value chain, such as mar­ket­ing, and prod­uct re­search and de­vel­op­ment. To in­crease sales, do­mes­tic man­u­fac­tur­ers are fo­cus­ing on on­line shop­ping plat­forms (such as Taobao and Jin­gling) as well as de­vel­op­ing their own e-com­merce sites,” added Danielle Good­man, IBIS’s busi­ness man­ager in China.

Guide­craft, a 50-year-old com­pany based in Tuxedo Park, New York, is hop­ing to take ad­van­tage of China’s grow­ing mar­ket. The com­pany was started by Fred Fein, who made small, wooden fig­ures called “wed­gies’’ in a one room shop in Garn­erville, New York. The fig­ures rep­re­sented pro­fes­sional men and women like postal car­ri­ers and some with dif­fer­ent skin tones — a ground­break­ing

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