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Chinese Toy Industry Development in the Eyes of International Professionals

In 2019, the world economic landscape is experiencing continuous adjustment and accelerating changes. Since China is the largest industry base of toys and baby products, global economy and international relations have deep and long-lasting impact on the industry development and market conditions. In the context of ever changing market environment, it becomes increasingly important for companies to learn about the latest happenings and development trends of the international market.
As Asia's most influential industry grand event, China Toy Expo and the co-located China Kids Expo, China Preschool Expo and China Licensing Expo converge the latest industry development trends, market conditions analysis, policy interpretation and product innovations in toys, baby products, preschool resources and licensing industry on one stage. The 2019 event has attracted 88,481 worldwide trade visitors achieving a 12% year-on-year growth.

How do international professionals view the Chinese market? Who are the partners that they are looking for? What are their suggestions to Made-in-China? To find out the answers to these questions, we have interviewed some of our international visitors. Let's hear what they have to say about Chinese market, China toy and baby products industry and the future development.

Sustainability is becoming the foothold for companies
Alan De Rauw
International Sales Director of Thailand PlanToys

The market is not easy if you don’t have a perfect goal or something you want to achieve. You need to have a good strategy and the will to invest in product development and traveling to meet the people in person. The H to H affects what I always call (Human to Human). It is super important to build the human and transparent relation with your partners to gain the trust.
It is the trend for companies to play on the trend of the time being “sustainable”. But only telling that you are sustainable is not enough especially not those days anymore. Because there is a lot of “bla bla” but when you look  details nothing much sustainable is inside. So when you really want to be sustainable in everything you have to do it and make it happen. And then you have a big chance to succeed, even with higher price.
It is important for Chinese factories to have their own personality and believe in what they can do. They should invest in designers from Europe and if they want to have success in Europe they should work with some people who are based in Europe to be close to their partners or customers.
A new trend is also in China. More and more specialty stores and lifestyle stores are coming. People who want to buy different and in many cases “not made in China”. This is a trend.
Partners that show me trust and transparency. People who want to build the business hand in hand in a sustainable way.

Understanding the needs through deep research to explore the overseas market
William D.Frazier
Shanghai-America Direct Import & Export Co.,Ltd.

About eighty percent of the toys sold in the United States are manufactured in China. For this reason toys manufactured in China are classified   electronic, mechanical, plastic and wooden toys. Although this may be true toy manufactures in China still lag behind foreign toy makers in terms of brand and innovative product design. Some mainland manufactures strive to stand out in the toy market through product differentiation in such areas as trendy educational toy sectors. In this case, Chinese toy manufacturers should consider Black America toys or baby products as an excellent and profitable idea that is a good business practice. And likewise Black America should create a toy or baby products trade delegation to attend China Toy Expo (CTE) 2020 and beyond.

With this in mind, my perspectives on the trend and demand for toy or baby products industry would be of great mutual benefit when Black America and Chinese manufactures begin to collaborate on joint projects.

To enter the Indonesian market, Chinese companies should pay attention to mandatory laws and regulations

Roedy Irawan
Chairman of the Indonesia Apparel and Baby Products Association (P4BI)

The Indonesian Apparel and Baby Products Association consists of 76 baby clothing manufacturers, baby clothing and baby products wholesalers, baby clothing and baby products importers. Since the launch of the China-ASEAN Free Trade Area, more than 90% of China and Indonesia's products have realized zero tariffs, and bilateral trade facilitation has been comprehensively improved, which has brought new opportunities for China and Indonesia to further expand and deepen economic and trade cooperation. Indonesia has a population of 268 million in 2018. About 5.5 million babies are born each year. It is one of the fastest population growing countries in the world and the fourth largest population in the world. A stable growth of the national economy, a huge number of children and strong consumption of the middle class are undoubtedly a huge business opportunity for the baby industry.

At present, the Indonesian government has put forward higher requirements for the production, import and sale of baby products. A number of seminars have recently been held to discuss the implementation of the SNI amendments and the implementation of the new K3L regulations.
The SNI regulations have been implemented since 2014 and became mandatory in 2015. This national standard (SNI) was set by the Indonesian Technical Committee and issued by the Indonesian International Bureau of Standards. The SNI certification requires that each shipment should be certified accordingly. If traders and sellers illegally trade products that do not meet SNI standards, they will face fines, penalties, destruction of goods and revocation of commercial licenses, and the offenders may even face criminal prosecution. Therefore, when Chinese companies export products to Indonesia, they should pay special attention to Indonesia's relevant laws and regulations and reduce related risks to further expand the cooperation space between Chinese and Indonesian companies.
According to the latest requirements, goods circulating in the Indonesian domestic market must be registered according to the K3L requirements, i.e. the sanitary, safety and environmental conditions of the product. This filing requirement was promulgated and implemented on August 14, 2019. The transition period is one year. It will be officially enforced on August 14, 2020. The validity period of K3L is five years.

Cater to Differentiated Customer Needs to Gain More Added Value
Anna Guderska-Karasek
Import Manager of Poland Artyk Sp. Z o.o.

Eastern Europe is growing faster and faster, chasing more wealthy EU countries. For the import managers this is a chance to show off, since new challenges are emerging.
Due to consumer requirements, companies in Eastern Europe face a challenge of choosing high quality products, but at competitive price. It should be remembered that these products are subject to the same quality standards, functioning in other EU countries (such as Germany, France or England). In most cases, however, our consumers have smaller budgets than their counterparts in these countries.
Not only children have less and less free time (due to many additional activities), but also smartphones and applications provide them a lot of entertainment, stealing younger consumers. The age of the children playing with traditional toys is greatly reduced. That is why we put a strong focus on toys for younger children (infants and preschool age). At the same time, we want to adapt these toys to the specific requirements of customers from our market. We try to implement "added value" to these products, which will not only distinguish us from the competition, but additionally enhance / make the product for children more attractive. We focus on the child's education and development through joyful play.
Another group of products, that we specialize in, combines new technologies with classic toys, allowing us to introduce a new quality in our services. Thus, we can successfully address older children, who systematically move away from classic toys. Key point here is that such an operation is intuitive and does not require large funds to regionalize applications / software, because this is often an unconquerable obstacle for smaller markets.
I believe that these trends will become widespread for the companies dealing with classic toys in our local market, when adapting the product to the customer and combining the old with the new will be a necessity.

Chinese Consumers are Expecting More Quality Products

Kevin H.C. Kim
Purchasing Director of South Korea M Baby Co.,Ltd.

Conventionally, China industries are considered as the world factory based on comparative price, rich manpower and resource, developing technologies and so on. Therefore, many factories in China focus to manufacture mass-production or OEM·ODM based items. And it is the best way to improve the production capability and leading the industries in worldwide.
Recent years, China is not only the world factory but also the biggest consumption market. Based on the No. 1 population in global, the market is getting bigger and the consumer looks for better quality items. It occurs that many factories move to other countries which are providing better service supporting set-up or manage the factory such as South-east Asia or Africa because these countries are willing to invite foreign capital to develop their economy.
In Baby Goods industry, it is clear circumstance the birth rate among developed countries is going down because many parents have only one child and raise the child in better environment. They are more concerning to provide educational and creditable product for their child, that is, the cost is not the first issue anymore for them.
It is important that the factory has to have and develop its own brand. In addition, it is necessary to change the production style from the mass production to small quantity batch production. Global customers including consumers in China look for unique, special items for only child. The factory needs to endeavor customized products for various requirements from the various markets to provide customers’ satisfaction.

Great Potential in Malaysian Toys and Baby Products Market

In recent years, the toy market in Malaysia is still active. According to official statistics, in 2019, the sales of toys and games in Malaysia increased by 15%, especially educational toys, electronic toys and authorized toys etc. In addition, authorized toys and models based on cartoon films and animations are very popular in Malaysia.
Statistics from the Malaysian Bureau of Statistics show that as of the first quarter of 2019, Malaysia's population increased by 1.1% to 32.66 million; of which, the population aged under 14 was 7.69 million, accounting for 23.5% of the total population. Although the total population has increased, the number of newborns rate has clearly declined.
Despite this, the demand for infant and baby products in Malaysia is still huge. According to a survey by international market research firm EUROMONITOR INTERNATIONAL, in 2017, sales of toys and infant products in Malaysia increased to RM766 million (approximately US$189 million), and the CAGR expected for the next five years is 6% and the sales is expected to reach RM1.06 billion (approximately US$248 million) in 2022. It is worth mentioning that as the number of newborns decreases and the size of the family shrinks, more and more parents are willing to pay higher price for toys and infant products with higher quality and safety.

Chinese Toys with Innovation are Gaining Popularity in ASEAN Market
Mr.Oh Tzer Chau
Manager of Malaysia Sego World Sdn Bhd

In recent years, Malaysia's toys, maternity and child products market has grown steadily every year. The capital city Kuala Lumpur and other first-tier cities hold a number of retail-oriented maternity and baby products exhibitions every year.
In urban areas, young parents with higher education levels and higher incomes are willing to spend more money on toys and maternal and child products with better quality and trustworthy brands. As for villages and countryside consumers, their main motive is affordability and they prefer good products at lower price. In general, toys with new design, high quality and affordable price are most popular among Malaysian consumers.
Although the birth rate has declined in Malaysia, it’s still high compared to those of other Asian countries. In addition, Malaysians pay special attention to parent-child relationships, so Malaysia's future toys, maternity and child products market has great room for development.
There are not many toy manufacturers in Malaysia, and most of the toys in the market are mainly imported, especially from China. In recent years, Chinese manufacturers have been seeking innovation and change and Chinese toys are very popular in Malaysia and throughout the ASEAN market.
At this exhibition, I intend to purchase more puzzle toys and remote control toys, because Malaysian parents are paying more and more attention to the intellectual development of children; and remote control toys can be said to be long-lasting in Malaysia.

In addition to purchasing educational toys and remote-controlled toys, I also hope to find toy manufacturers who are willing to expand to ASEAN. Since its inception in 2014, our company has grown rapidly, starting with a small store front and expanding its business area to over 7,500 square feet in just five years. At present, we are looking at the booming ASEAN toy & baby market and are building the first toy & baby products showroom in Southeast Asia. Therefore, we hope to find like-minded partners to work together and take Malaysia as a window to the entire ASEAN market.