Imported Toys R It
Chinese people above the age of 30 may recall their happy childhood days playing with crudely made building blocks, slingshots and rag dolls. Lego sets have since replaced building blocks, as tanks, racing cars and toy guns have supplanted the humble slingshot. Barbie Dolls with complete wardrobes and cuddly cartoon character toys have also rendered the rag doll a museum piece. Children’s tastes in toys, in common with all other aspects of Chinese life, have moved with the times.
Parental Guidance
Toyshops resplendent in world famous foreign brands are prominently placed in China’s many urban shopping malls.
A woman lawyer earning RMB 10,000 (about US$ 1300) per month has just brought her 5-year-old son the French-made Smoby large-scale assembly toy at the New China Children’s Store on Beijing’s famous Wang Fujing Street. She explains that as her newly purchased house has adequate space for this large-scale plaything, and there is no domestically produced equivalent, she is willing to pay the extra for an import.
Many one-child family units in urban China spend half their income on their children. Toys are perceived as tools for sharpening the intellect and refining tastes, rather than merely for amusement. As such, they merit their high price tag. The one-child policy has made Chinese parents more determined than ever to help their child succeed in life.
Mattel Inc., the manufacturer of Barbie Doll, is the largest importer of toys to China. “The toy market in China is a goldmine, because the one-child policy makes parents willing to buy expensive, high-quality toys for their sole offspring without a second thought,” says Zheng Jinhui, manager of Midway Enterprises (Guangzhou) Ltd, Mattel Inc’s commercial agent in China.
Advanced technology has also made cyber games a children’s favorite, to the extent that they become compulsive. In response to teachers’ warnings about the evils of cyber games, parents unhesitatingly buy imported, more creative toys.
Customs duty on toys at Toys “R” Us -- the world’s largest toy retailer -- in China is 17 percent, which makes their retail price substantially higher than in the U.S. To the majority of Chinese parents, however, it is money well spent.
Golden Business Opportunities
China’s 400 million children under the age of 14 mean a potentially huge toy market, confirms Liang Mei, executive vice-president and secretary-general of the China Toy Association. The growth rate of domestic toy consumption is 30 percent to 40 percent annually, according to a Guangdong Toy Association survey. This can be broken down to RMB 35 (about US$ 4.5) per child in urban areas and less than RMB 10 (US$ 1.5 ) in the countryside, according to Social Survey Institute of China data. On this basis, China’s total toy consumption will surpass RMB 100 billion (US$ 14 billion) by 2010.
The Takara Tomy Company Ltd. has introduced several product series to China, such as play-cars and mini remote control motors. Tomy has established 85 counters in China’s bigger cities in the past eight years. “As China becomes an increasingly prominent toy manufacturer, it is also becoming a major toy consumer,” says Tomiyama Kantaro, president of Takara Tomy. “China’s amazing development gives us confidence that it is an enormous market.”
Chinese children have always adored toys in the image of overseas cartoon characters, from the venerable Donald Duck and Mickey Mouse to today’s Snoopy and MashiMaro. Today, imported and joint venture products account for 80 percent of the cuddly toy market.
There was an upsurge of foreign capital a decade ago aimed at advancing the Chinese toy market. Owing to policy at that time, as well as unacceptably high prices, however, foreign toy importers were forced to retreat. But they are back with a vengeance.
Lego from Denmark and Hasbro from the US are available at all China’s big city store toy counters. Shanghai Kaleeto Industrial Co., Ltd., the Chinese commercial agent for many noted world toy wholesalers, has also introduced toys from Japan, the U.S., Sweden and Britain. These innovative playthings are a hit with white collars and senior citizens as well as children.
As regards marketing, many toy companies are guided by parents’ psychology, and also pay close attention to national holidays. A Lego truck exhibition tour of Beijing’s Wanfujing shopping malls on Children’s Day 2007 attracted thousands of parents and children, and a huge gas-filled “Snoopy” drew hordes to another nearby department store.
Toys“R”Us set up its first shop in Pudong, Shanghai in December 2006. It plans to open four more stores in Beijing and Shanghai this year. More than 400 domestic and overseas toy manufacturers, including the Simba Dickie Group, will display their latest products at the Third Shanghai Toys Expo of October 2007.
Toy Manufacturing/Consumption Irony
The ironic aspect of China’s high imported toy consumption is that they are generally “Made in China”. Yet, as Mattel Inc. distributor Zheng Jinhui confirms, that 70 percent of Mattel’s products are made in China, sent overseas to be packed and imported back to China at luxury prices in no way affects their sales.
China manufactures produce 75 percent of the global toy output, according to Shi Xiaoguang, president of China Toy Association. This makes it the toy-purchasing center of the Asia-Pacific area. Each item of goods sold at the well-known New World Children’s Store bears a label of origin. Apart from the prominent brands such as Lego, made in Denmark, Smoby from France and Oxford Toys from the ROK, certain imported toys originate in Guangdong Province.
Although known imported brands dominate China’s toy market, domestic toy companies are creating their own brands through low cost development. The Wuhan Toy Association has established a cartoon-related toy research center to spur the national toy market, according to Tian Rongsheng, its president. The center has attracted talented researchers from Guangdong Province and Shanghai. One of its products, the Yinhui remote-controlled helicopter is now a top Toys“R”Us seller.