|
Tens of thousands of international businessmen gathered in Shanghai hoping to solve one of the puzzles of the international toy business -- how to sell their products to China's 300 million children.
"China is very fashionable now ... you have to build the brand first and that takes time," Hermann Bruns, head of international sales at Ravensburger, one of Germany's leading educational toy companies, said at the Shanghai Toy Expo.
China, home to the world's largest population of children under 14 and producer of 75 percent of the world's toys, only accounts for a fraction of the 70-billion-dollar global toy market.
Its nearly 10,000 toy factories have a near monopoly on global manufacturing, yet the domestic market is only slightly larger than Spain's.
"The toy market in China compared to Europe and the US, which is worth about 47 billion dollars, is comparatively small," said Ernst Kick, chief executive officer of Speilwarenmesse, organizer of the world's largest toy fair in Nuremberg, Germany.
While China's domestic toy market is forecast to grow to 12 billion dollars by 2010, it was worth only 1.4 billion dollars in 2001, according to the latest industry statistics.
In contrast, China exported nearly eight billion dollars worth of toys in 2001 which jumped to nearly 10 billion dollars by 2002 -- accounting for 10 percent of the total exports in the country's light industry sector.
While the bouyant figures bode well for China's exporters, international toy companies have yet to crack the market -- imports jumped 36 percent but still only totaled 192 million dollars last year.
Undeterred, nearly 100 companies from Germany, Spain, Italy, France and Japan are in Shanghai for the expo, showing everything from expensive electric trains to building blocks for tots.
"You can't expect to make money here but you have to be here in China, to build the brand and the pay back comes later," Bruns said.
Marc Solano, export area manager for Spain's TecniToys, makers of electric model race tracks, added: "The business is going really well but we still have to break even and that's a few years away."
Piracy, lack of efficient distribution channels, strong domestic marketing strategies, poor sales outlets and price wars are just some of the problems international toy makers face.
While most of the world's toy giants long ago shifted production to China to benefit from the country's cheap labour, "Made in China" Western design toys are still too expensive for the Chinese consumer.
"Chinese want cheap toys and as long as a toy performs its function, they don't see that the quality of a toy has its role," said Zhong Mei, sales and marketing director of the Kid Land Company, a major distributor for Western toys in China.
"Parents here misunderstand toys. They believe that kids only need toys before they go to school," said the former Lego Company employee.
"They don't see that toys can also serve kids' education. So after kids reach the age of seven, the rate of toys purchases falls dramatically."
On a more positive note, the focus of China's toy fairs used to be on Chinese suppliers to help their exports but with the cooperation of Speilwarenmesse the focus is now also on the domestic market.
"With a good product, good price and the right distributor you can target your consumer ... but you need a least five years," said Bruns.
(China Daily October 11, 2003)
|
