Breakthrough In China’s Toy Industry Dilemma

By Lanbo Jiang

China’s toy industry, toy industry is still the original, but the market has undergone enormous changes. By the worldwide financial crisis, has been to Europe and the United States market as the main export destination of the situation will be broken.October 15, the world’s largest toy manufacturing enterprises Smart Union Group, the closure of two toy factory by the industry as the financial crisis China’s first case of the closure of the real economy.At present, the Chinese toy industry, if there closures? A substantial reduction in export orders the case, toy companies how to develop new markets for self help winter?

Shrinking Export Orders

1 November afternoon, a private toy company in Wenzhou, Zhejiang boss Chen trees suffering in train hard seat compartment 27 hours later, out of the Beijing Railway Station Beijing International Toys directly toward the city. His purpose is to investigate the north in Beijing and other cities in the toy market to find the provincial agents, or direct the establishment of direct sales stores.Chen Shu’s toy factory from three years ago, 10 people, to today’s nearly 100 people, can only count in the local SMEs. At this time each year is the busiest time of the factory, because of the need for foreign customers to produce a toy and Christmas related, but this year he was worried for the market. “Compared with last year, in September, October from Europe and the United States in order to reduce the Liu Cheng, companies are saving, for the early ride out the storm.”Chen said the tree, where in his county, in the recent two or three months, some 50 people have small toy companies began to cut production, discontinued or closed closed down.

Increased Risk of Capital Return

In previous trade show, the Ministry of Commerce officials had said: some foreign distribution businesses Toys trouble, but they often hide malicious case of China toy company, suddenly increased purchases, when the goods into the country, merchants from the Customs delivery after a sudden bankruptcy. In China, toy companies do not give priority to the repayment of the results a great loss.Fortunately, many Chinese toy exporters have been aware of the risks, Chen Shu said: “would rather not do this business, we do not credit, no credit and killed.” Obviously, those adverse foreign trade enterprises in China, toy companies have the mouth had left a bitter taste. “Toy companies are now very low profit, once the malicious debt, possible loss of profits a year, money chain is broken, the closure of the direct closed.”

Export Costs Increase by 1 4

For a long time, Europe and the United States is the most important of the traditional toy export market, but this year, the European Union, the United States and Japan, nearly 40 countries have introduced new safety and environmental protection standards. In August, “the U.S. Consumer Product Safety Improvement Act,” formally promulgated, the lead content in toys and phthalates content of the strict rules, almost to achieve “zero content.”The implementation of the EU in spring next year, “the new toy safety directive”, including the prohibition against the use of all allergic substances in toys, and any carcinogenic, mutagenic or harmful material of human fertility, only a very small number of substances to be exempted. Chen said the tree, in fact, China’s domestic 3C compulsory certification standards already on the export of toys through a rigorous certification, but the new standard for Europe and the United States to the Chinese toy exporters had to repeat the certification process to go, thus the costs incurred by the export manufacturers bear, export costs to increase by almost 25%.

Expansion of Domestic Demand in Emerging Markets to Offensive

Latest Chinese customs data show, this year in January to July, exports of less than 10 million toys for the 1574 business year on year net decrease of more than 3,600, compared with a decrease of 52.7% over the same period last year. Chinese toy exports this year, the first 8 months although there were 51 million, but only increased over the same period the previous year by 1 percentage point, the growth rate slowed by nearly 22%.The face of harsh international export environment, and Chen, like trees, many for export of domestic toy manufacturing companies began to focus instead on the domestic market. Production of wooden toys and letters toys, general manager of Zhejiang Bin Ho said in an interview at present, has been drawn out from the company’s crack sales team dedicated to the establishment of domestic sales, and actively participate in the toy fairs in major cities, open up the domestic market. And nearly a month since the city directly to Beijing International Toy shop toy companies increased significantly, the general manager of the toy or even directly to the city, Zhejiang, Guangzhou and other toy companies investment intensive areas.

In addition to physical storefront, e commerce online sales, with a special toy site, also for the expansion of domestic demand now an effective way. China’s largest online toy City Music Amoy network spokesman told reporters that the country as traditional channels such as shopping centers in some big cities, supermarkets are more toy stalls, and some even become saturated, and the cost of individual stores and comparison shop, or high, domestic and international toy company need to seek new channels for domestic solutions, and the vertical B2C websites have become a good choice. Financial crisis has not only not to the music any negative impact Amoy net, but rather a number of domestic and international well known toy manufacturers have made Lok, the initiative to seek cooperation.

Relevant person in charge of China Toy Association, said the association’s positive efforts, the export tax rebate problem was solved. According to October 21, 2008 issued by “some of the goods on the export tax rebate rate increase notice,” starting from November 1, the export tax rebate rate of toys from the original 11% to 14%. This adjustment will bring life toy industry.China’s toy market in Europe and the United States frequently encounter “quality gate” and “order the door”, the more determined to explore the international toy manufacturers in emerging markets and a toy industry veteran, said, South Asia, Middle East, South America and so customers are currently toy industry another way to expand the overseas market. Toy company can comply with the relevant environmental standards, the initiative to reduce product materials, the price down, in order to attract orders for these areas.

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