New Toys,New Lives

Some US media thought that China’s toy manufacturers might become the victims of the global financial crisis. Some others thought that a warning had been given to the Chinese toy industry. Therefore, the Chinese toy industry must accelerate its pace of reform.

How large is China’s toy market? In 2007 the exports amount of China’s toys reached 20.86 billion US dollars. 80% of the toys made in China are sold to the foreign countries. Only 20% are sold in China. From this we know that the sales amount of the toys in Mainland China was 15 billion yuan (USD 2.2 billion). In addition to the imported toys worth 880 million US dollars, the total sales amount of toys in China was more than 20 billion yuan (USD 2.93 billion). In the year of 2008, the growth rate of China’s market saw a decline due to the financial crisis. But China was still the country which produced the largest number of toys.

Though there are 6,000 toy enterprises in China, it can not be said to be a toy power. The history shows that the center of world toy industry was transferred from Europe and America to Japan and then to Taiwan and Hong Kong. In the 21st century, the center was gradually transferred to the Pearl River Delta Areas of Mainland China. Most of the toy enterprises in China focused on the export processing. They do the contracting processing for Mattel Inc, Hasbro, Disney, Bandai and some other international toy giants.

From last year in which the product recall event, the subprime debt crisis and the global financial crisis occurred, some famous toy enterprises in Guangdong were closed. China’s toy industry had to assume more stress. The Wall Street Journal once published an article titled “China’s Toy Manufacturers Became the Victims of Financial Crisis”. The words “storm of closures” were shown in the reports of China’s media to describe the status quo of China’s toy enterprises. Some people even said that China’s toy industry is approaching the collapse.

New Actions in Crisis

Ignoring the pessimistic tunes about China’s toy industry, let’s see some new phenomena concerning toys in China.

One: “Doll-raising clans” rise in cities

In recent years, there appeared the “urban doll-raising clans” in Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou and so on. In their eyes, the dolls are not ordinary toys. Lives are given to them. They call themselves as “dolls’ fathers or mothers”. The dolls they “raise”, though different in size and shape, shared the same name Ball Joint Doll, with the same feature that all its joints are linked with balls, enabling this doll to make different movements like human. Currently, people mainly buy them from Europe, the USA and Japan through the Internet. Those dolls are made by hand; therefore, the price is usually quite high.

Those “fathers or mothers” not only buy clothes for their “children”, but also hold parties in which their “children” can find their “boyfriends or girlfriends”. A wedding ceremony between two dolls can also be seen. Those doll-fancies usually get together to show each other how they dress their “children” and share the experience.

The dolls nearly make all the girls’ hopes come true. They look cute and wear fashionable clothes. They are unique and stylish, embodying the aspirations and dreams of the modern women.

Two: Products of online games

Among the most online game suppliers, the NetEase (www.省略) took the largest market share. It is also the online game supplier in China with the strongest ability of independent research, development and operation. Its Pilgrimage to the West Trilogy and Dreamful Pilgrimage to the West have more than 300 million players registered. The number of online players is over 3 million. The other games are also quite popular in these years.

Miki is a famous brand of gachapon. On January 8, 2009, Miki and NetEase reached an agreement. According to the agreement, Miki can develop the gachapon toys based on the characters of the Pilgrimage to the West Trilogy and the Dreamful Pilgrimage to the West. The products are planned to come out in the market in the first half of 2009.

The cooperation pattern between NetEase and Miki makes the toy manufactures share the profits of online games. A bridge between the traditional toy industry and the emerging online game industry is built, creating a space for the toy industry to upgrade.

Three: Entering into Cartoon Industry

Zhejiang-based Sea Interest Group earned 110 million US dollars from the North American market in 2007. During that period, the price of one of its toys named “Haimingke” increased from more than 10 US dollars to 100 US dollars when the short supply happened. FromJanuary to May, the sales amount of “Haimingke” still increased at a 30% growth rate in the USA. Such a phenomenon attracted a lot of attention from the public. CCTV, authority television in China, also made a report about it.

Then Sea Interest Group began their development in China. It introduced a program called “Internet Babies”, which attracted a lot of attention. This program includes two games, which are subdivided into two channels. The “kid” channel is a “park of growth” for little kids. The setting of the game intimates the real life, in which the children can bring their own pets to play, study, go to the doctor or even take money from the ATM machine. The “teen” channel is a “magic book” in which the older children can fight against the virtual monsters.

Fang Guangming, General Manager of Sea Interest Group, said: “Our products are different from the traditional toys. Strictly speaking, it is an Internet product. In the foreign countries, we carefully designed a virtual world in which every product of us can extend their lives there through Internet technology. Our customers can buy cute plush toys and log into a website with the password from the toys. In this website a child can adopt a pet which is the same with the toy he or she buys. They can also study, play and live in the virtual world which can foster their abilities of living alone.

The pattern of “toy online game toy” created by Sea Interest Group has become the new business pattern in China’s toy industry. They attributed their success to these factors: “The Internet companies have no abilities to develop and produce toys, while the toy companies have no technology and experience to develop and operate online games. Now, we combine these two things together.”

Five Directions of Changes

The active exploration of China’s toy industry also lists out the new directions of the development of toy industry in the future. Based on the status quo of the international and domestic toy industry, China’s toy industry will face five changes as follows:

One: DNA reform give the toy the life

Having no famous brand is the biggest defect of China’s toy industry. Customers usually buy the toys based on perceptual feelings rather than rational ones. How to trigger people’s interest is the main problem for the China’s toy industry in building up a brand.

Teddy Bear is one of the most successful toys in the world. It has a lot of fans. Some people are even fascinated with it. In 1989 a quite rare red Teddy Bear named Alfonzo was sold at an auction for 12.1 thousand pounds. Right now it is displayed in the museum of the Teddy Bears of Witney shop. A cinnamon Teddy Bear Teddy Girl was sold at 110 thousand pounds in 1994. A black Steiff Mourning Bear (one of the 600 Teddy Bears made after the disaster of Titanic) was sold in December 2008 for 91.75 thousand pounds.

Why are those Teddy Bears so charming? The main reason is that the producers give them lives. They are not simple toys; instead, they become the friends of their owners. The collection of Teddy Bears is a market pushed by the “love” and “passion” of the owners for the Teddy Bears. For a man having no love for them, they are just toys. But if one loves them, he or she will find that different bears have different expressions and even different personalities. The owners call their Teddy Bears as the “hug family” and each bear is a hugster.

The competition in brands is the competition in culture and humanity. Former president of Coca Cola A. Howard Stebbins III once said: “You will not find a successful global brand not containing or expressing a kind of basic human feeling.”

Two: Design Reform motivate the liveliness of toys

China’s toys have no strong competitive power which is mainly attributed to the less strong ability of design. No innovation can be seen in the toys which share the same features. Be@rbrick, another kind of toy bear, is completely different from Teddy Bear. However, it is also quite successful. A bear with no face have different kinds of shapes, actions and meanings. The unique design is the most important.

Be@rbrick is the nickname of Bearbrick. It is a bear building block made by Medicom Toy. Its hands and feet are like the building blocks; its body looks like a robot. The first generation of Be@rbrick toys came out in the market in August 2001 and soon became popular. Now it has several generations. Each generation has a basic type.

Depending on its unique design concept, Be@rbrick has cooperation with different companies engaged in beverage, entertainment and clothes. Warner Brothers once issued 12 Be@rbrick toys, featuring different characters from Warner Brothers’ films, including “the Return of Superman”, “Matrix II” and “Batman: the Dark Knight”.

Three: function reform improve toys’ value

The toys are only used for play? Lego said no! In 2008, Lego still had good performance despite the depressed economy. Its growth rate of profits reached 32%.

In 1955, Lego put forward the slogan of “Play and Learn”, advocating the new concept of combining the playing and learning. It developed a new kind of plastic toy bricks with round protruding parts on one side and round sunken holes on the other side, through which each piece of brick can be snapped together. There are more than 1300 different shapes of toy bricks and each brick has 12 different colors. It can help the children to develop their imaginary power.

Lego is not only a toy. The module concept from it has been used in the semi-conduct, IT and furniture industries. Google founder Larry Page said that his knowledge and ability of using the mechanic equipment came from those Lego bricks. When Google was initially founded, Larry and Sergey Brin, another founder, used the Lego bricks to build the case for server. Fortune magazine considered the Lego bricks as the “century toy”, which played an important role in people’s lives in the 20th century.

Four: Business pattern reform build up a network platform

In the second and third-tier cities of China, the toy sellers are unable to learn the latest development trend of products, which results in the lag of the spread of new toys.

Therefore, it is necessary to introduce the business sharing pattern, which means a large number of toy manufactures and sellers build up a business platform in order to reduce the communication cost. The toy supermarket “Edutainment Toys” is a good example. It adopts the Alibaba business pattern to integrate every link of toy industry. The toy sellers can know the knowledge of the products and buy goods online. People can also join in its distribution team.

Five: Industry integration reform join with animation and innovation industry

The old Chinese toys, like tangram and Chinese ring, were once very popular in the world. The Chinese ring was once thought to be the most intelligent toy by the westerners.

However, today’s Chinese toys lack innovation. When the foreign cartoons attract so many Chinese boys and girls to sit before TV sets, their derivative products are also quite popular in China. The Mickey Mouse, Barbie Doll, Gundam and some other toys are always laid in the noticeable place of the shelves and the foreign toy manufacturers also earn a lot of money from China.

The animation industry has the largest influence upon the toys. Maybe connecting toys with animations is the best method for the Chinese toy enterprises to walk out of the present difficult period and to catch up with the development trend of the world’s toy industry.