China’s plush toys already have rich cultural heritage. With the development of China’s economy and the continuous improvement of people’s living standards, the demand for plush toys is increasing. Plush toys have been very popular in the Chinese market, but they cannot be satisfied with this and need to go international. For the export of Chinese plush toys abroad, several key factors cannot be ignored.
（1） Advantages
1. China’s plush toy production has a history of decades, and has already formed its own set of production methods and traditional advantages. A large number of toy manufacturers in China have cultivated a large number of skilled labor; Many years of experience in export trade – toy manufacturers are familiar with toy production and export trade procedures; The growing maturity of the logistics industry and export agency industry has also become an important support for China’s toy industry to export abroad.
2. Plush toys are made of simple materials and are less limited by safety and environmental protection than other types of toys. The EU has implemented the Directive on Scrapped Electronic and Electrical Equipment since August 13, 2005 to collect back charges. As a result, the export cost of electronic and electric toys exported to the EU has increased by about 15%, but the plush toys are basically unaffected.
（2） Disadvantages
1. The product is low-grade and the profit is low. China’s plush toys in the international market are low-grade “bargains”, with low added value. Although it has a large share in the European and American markets, it mainly relies on the low price advantage and processing trade, and its profits are meagre. Foreign toys have integrated light, machinery and electricity, while Chinese toys seem to remain at the level of the 1960s and 1970s.
2. The technology of labor-intensive industries is relatively backward, and the product form is single. Compared with international toy giants, most toy enterprises in China are small in scale and use traditional processing equipment, so their design ability is weak; The vast majority of toy enterprises rely on the processing and production of supplied samples and materials; More than 90% are “OEM” production methods, namely “OEM” and “OEM”; The products are old, mostly traditional stuffed toys with a single variety of plush and cloth toys. In the mature toy design, production and sales chain, China’s toy industry is only in the marginal position of low added value, not competitive.
3. Ignore changes in the international toy market. An obvious feature of Chinese plush toy manufacturers is that they expect middlemen to sign more orders for simple toys all day long, but they have no knowledge of market changes and demand information. Little is known about the development of relevant laws and regulations in the same industry in the world, so that the product quality is not strictly controlled, resulting in market frustration.
4. Lack of brand ideas. Because of their narrow strategic vision, many enterprises have not formed their own characteristics and brands of toys, and many are blindly following the trend. – For example, a cartoon character on TV is hot, and everyone rushes to pursue short-term interests; There are fewer people with strength, and fewer people take the road of brand.
（3） Threats
1. Plush toys are overproduced with low profits. The overproduction and market saturation of plush toys have led to fierce price competition, a sharp decline in sales revenue and negligible export profits. It is reported that a toy manufacturing enterprise in a coastal city of China has specially set a brand for a toy company in the world to process toys. The sales price of this toy in the international market is 10 dollars, while the processing cost in China is only 50 cents. Now the profit of domestic toy enterprises is very low, generally between 5% and 8%.
2. The price of raw materials rose. The sharp rise in international oil prices has led to rising costs, and the continued collapse of retailers and manufacturers and other adverse situations have emerged – making it even worse for China’s plush toy manufacturers, which originally only earn meager processing fees and management fees. On the one hand, we have to increase the price of toys for survival, on the other hand, we are afraid that we will lose the original price advantage due to the increase in price, which will lead to the loss of order customers, and the production risk is more uncertain
3. European and American safety and environmental protection directives face many obstacles. In recent years, various trade barriers set up by Europe and the United States against toys have emerged in an endless stream, causing Chinese toy products to be repeatedly “hit” by the unqualified quality proposed by Russia, Denmark and Germany and the lack of protection of the rights and interests of toy factory workers, which makes many domestic toy manufacturers face difficulties. Prior to that, the EU has successively issued regulations such as the Prohibition of Hazardous Azo Dyes and the EU General Product Safety Directive for toys exported from China, which set strict environmental and safety standards for a variety of goods, including toys.
（4） Opportunities
1. The severe living environment is conducive to promoting the Chinese traditional toy enterprises to turn pressure into power. We will transform our business mechanism, enhance our capacity for independent innovation, accelerate the transformation of the growth mode of foreign trade, and improve our international competitiveness and risk resistance. Although difficult, it is difficult for enterprises to develop and progress without suffering.
2. The further improvement of export threshold is also an opportunity for brand toy export enterprises. For example, some large enterprises that have passed the environmental protection certification will be more and more favored by customers – newly developed high-end products will attract more orders. Enterprises that profit from complying with international rules will become the target of many small producers, which is not bad for the reform and progress of an industry.
Post time: Nov-15-2022