Huang Chunman, a Guangdong-based toy trader, was apprehensive
about her overseas market ever since the spate of recalls of
Chinese toys last year. But she was relieved to find her company
still received heavy orders from loyal overseas buyers.
"An influx of orders before Christmas came as a big relief,"
said Huang, general manager of Bright Spring Trading Ltd.
Toy manufacturers generally think it is difficult to inspire
loyalty in this competitive market. However, good quality and smart
design always get customer interest.
"Quality and design are now the top priority of our production,
it surpasses all other issues like soaring material and labor
costs," Huang said.
Rapid growth in material prices and higher wages in Guangdong
province have forced the Shantou-based toy group to raise its
prices by 10 to 15 percent.
"Higher prices did not affect our overseas business. But what we
were concerned about the most was better quality," Huang said.
Like Huang, thousands of Chinese toymakers have been through a
turbulent year. In 2007, "Made in China" experienced an
unprecedented "crisis of confidence", triggered by the recall of
China-made toys by Mattel Inc of the US. This was followed by other
similar recalls of Chinese exports ranging from toys to toothpaste
and food.
Quality defects weren't the only reasons for the recalls.
Disputes over standards, technical barriers and trade protectionism
also played a large role.
The industry must be more inventive to survive and cheap toys
can't survive competition and trade protectionism, said Samson
Chan, president of the Toy Manufacturers' Association of Hong
Kong.
"Toy producers should try a new business model; they need to
attach importance to more value-added products," Chan said at a toy
fair in Hong Kong, which is home to over 3,000 mainland toy company
headquarters.
PP Bear Industry Investment Co Ltd brought to the market
innovative and hi-tech toys and did far better than it thought. The
Shenzhen-based toy manufacturer developed teddy bears that can
imitate human expressions, which was an instant hit with
customers.
"We have aimed to turn our products from 'Made in China' to
'Created in China'. And our products with independent intellectual
property rights have been well received in the overseas markets,"
said Hu Lantian, chairwoman of the company.
"Only products with exclusive designs can meet the demands of
buyers in international markets. Chinese enterprises have rich
experience in OEM (original equipment manufacturer) business, but
there will be a limited overseas market for simple OEM
products."
The company, which began developing the overseas market last
year, realized sales revenue of nearly 1million yuan from
abroad.
"It is expected to reach 5 million yuan this year since we will
strengthen efforts to upgrade design and develop new products," Hu
said.
Strong exports
Jeffrey Lam, chairman of the Toys Advisory at Hong Kong Trade
Development Council, said despite the toy recalls last year, it was
a good year for Chinese toys as industry players adhered to the
high standards of product quality.
China exported $7.07 billion worth of toys in the first 10
months of 2007, representing growth of 20.1 percent over the same
period of the previous year.
Customs sources said the growth was 13.9 percentage points
higher than the year-earlier level despite all the bad press that
"Made in China" products got.
The 10-month period saw Chinese toy exports to European and
North American markets recover and those to emerging markets grow
rapidly.
Between January and October, China sold $3.06 billion worth of
toys to the US, up 13.3 percent over the same period of 2006, and
toys worth $1.72 billion to the European Union, up by 29.9 percent,
according to the National Bureau of Statistics.
The growth rate was 11.2 percentage points higher for the US and
24.9 percentage points higher for the EU. The two markets absorbed
67.6 percent of China's total toy exports.
China also sold $390 million worth of toys to Latin America, up
42.2 percent.
Hong Kong toy exports in the first 11 months of 2007 topped
$11.4 billion, up 25 percent over the same period last year.
Exports to the two main markets - the US and the EU - were up 4.7
percent and 24.2 percent respectively.
Toy manufacturers on the mainland and Hong Kong have been
advised to develop the domestic market, which has very strong
business potential.
Local opportunities
"Toy factories should not only focus on overseas markets, the
home market offers tremendous business opportunities. There is a
growing number of affluent families wanting better-quality and
smartly designed toys for their children," the Hong Kong Trade
Development Council said in a statement.
"Toy producers should try a new business model, such as
developing the domestic market," Huang said. "The domestic market
may help them to expand business. They should not only focus on the
overseas market since the cost of exports is rising."
(China Daily February 5, 2008)
