Stuffed Plush Toys. China Sourcing Report. Essential sourcing intelligence for buyers.

Transcription

1 Stuffed Plush Toys China Sourcing Report Essential sourcing intelligence for buyers December 2004 US$445 Beijing Tianjin Shandong Guangdong Jiangsu Shanghai Anhui Zhejiang Fujian Stuffed plush toy supply centers China manufacturer profiles Detailed profiles of 98 suppliers, including findings from in-person tours of 20 factories Product & pricing forecasts Prices and specifications of 120 top-selling export products Supply centers & market trends Coverage of leading and emerging supply centers, plus insight into capacity, output and R&D

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3 EXECUTIVE SUMMARY STUFFED PLUSH TOYS A ground-level view of supplier capabilities and product trends in China s stuffed plush toys export industry EXECUTIVE SUMMARY The stuffed plush toy industry in China has been recovering from major setbacks that slowed production in late 2003 and early Exports from the country amounted to an approximate $1.5 billion last year, a year-on-year growth of 2 percent. The growth rate in 2004 was marginally lower than the projected 5 percent, primarily due to the labor shortage in the more developed parts of China. Output of stuffed plush toys fluctuated as manufacturers took time to hire and train new workers, find qualified subcontractors, and reevaluate worker benefits and production procedures. Although these issues continue to impact the output of stuffed toys, suppliers are confident the next 12 months will be an improvement over the past year. The following are some of the key trends we see in China s stuffed plush toys export industry: Suppliers will continue adopting strategies to soften the effects of the labor crisis to prevent production delays and lose sales opportunities. Some makers will increase wages and provide workers with better working and living environments. While these steps will inflate operational expenses, most suppliers will keep prices at current levels in an effort to maintain competitiveness. However, the rising costs of raw materials such as polypropylene stuffing might compel some makers to increase prices. Toy safety will improve. Many suppliers will adopt the China government s updated guidelines on toy safety, released in October The standards are based on international toy safety standards, and are for the compliance of all toy suppliers. With the rise in demand for electronic toys, suppliers will produce more interactive stuffed plush toys that emphasize learning through repetition of words, music or other customizable features. The increasing availability of locally made IC modules and voice recorders will allow suppliers to bring down prices of such models. China makers offer regular stuffed plush toys, electronic and mechanical stuffed plush toys and DIY unstuffed toys. These product categories are discussed in detail in the Products & Prices section of this report. A price guide also compares low-end, Exports by product DIY unstuffed toys 4% Source: Supplier interviews Regular stuffed plush toys 85% Electronic & mechanical stuffed plush toys 11% midrange and high-end models in all three categories. The Manufacturing section highlights QC procedures, including safety monitoring of products from assembly to packaging. The stuffed plush toy industry consists of about 1,200 manufacturers, and an additional 1,000 companies that subcontract for exporters. It is predominantly composed of small and midsize makers, more than half of which are foreign-invested or joint ventures. The rest are state-owned or publicly listed. Production capacities of suppliers in this report range from 15,000 pieces to In this report 20 in-depth company profiles 78 short company profiles 210 top-selling export products Supplier rankings by key capabilities Supplier survey Industry statistics and charts 3 million pieces a month. Of the 98 featured companies, 61 have monthly production capacities between 100,000 and 500,000 pieces, 15 are capable of producing 500,000 to less than a million toys a month, and 11 can produce 1 million units or more each month. At 3 million pieces, Shanghai Haixin has the highest monthly capacity. The production of stuffed plush toys is concentrated in the provinces of Jiangsu, Shandong and Guangdong, which together accounted for 71 percent of China s total exports from January 2003 to September Twenty-eight of the suppliers in this report are from Jiangsu, 23 are based in Shandong and another 16 are from Guangdong. The rest represent Zhejiang and Fujian provinces, and Shanghai. Global Sources research teams toured the factories of 20 makers and spoke with top-level executives, who discussed their 2004 performance and forecasts for The report has an in-depth profile of each of these makers, as well as detailed profile tables of an additional 78 suppliers. All suppliers were asked to participate in a survey designed to provide insight into product and price trends, and major challenges facing the industry in the next 12 months. The results are presented on page 15. The report also features a product gallery, which provides details of 210 top-selling stuffed plush toys from China. Market Intelligence: Stuffed Plush Toys 3

4 CONTENTS INDUSTRY OVERVIEW...6 Industry structure Codes of conduct PRODUCTS & PRICES... 8 Regular stuffed plush toys Electronic & mechanical stuffed plush toys DIY unstuffed toys MATERIALS & COMPONENTS MANUFACTURING Production process QC and testing Production hub: Yangzhou, Jiangsu R&D/DESIGN...14 SUPPLIER SURVEY Export prices, export sales, capacity expansion, dealing with labor shortage, R&D focus, hot product lines, target markets SUPPLIER PROFILES Methodology Supplier capability Supplier statistics Supplier profiles PRODUCT GALLERY SUPPLIER CONTACT DETAILS NOTE: All prices quoted in this report are in US dollars, unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of the interview and may have changed by the time this report reaches you. Buyers seeking firm quotes on products mentioned in this report should contact the manufacturers/traders directly. 4 Electronics July Market Intelligence: Stuffed Plush Toys

5 INDUSTRY OVERVIEW INDUSTRY OVERVIEW Stuffed plush toy exports from China are expected to grow by approximately 2 percent in 2004 to $1.54 billion, from $1.51 billion in Although this is lower than the 5 percent growth rate in 2003, it is still significant considering the fact that the industry is highly mature, is continuously losing market share to radio-controlled and electronic toys, and is reeling under the pressures of increasing raw material costs and labor shortage. Insufficient labor continues to be one of the major challenges faced by stuffed plush toy makers in China, although the situation is not as severe as it was in Makers located in more industrialized areas, such as Guangdong, Zhejiang and southern Jiangsu provinces, are especially affected by the labor shortage, as workers have been moving from the labor-intensive low-paying stuffed toy industry to other high-tech higherpaying industries. Worst hit by the shortage is Guangdong, where the concentration of a range of industries offers workers ample job opportunities. In addition, many migrant workers are moving back to their home provinces where the manufacturing sector is prospering. Suppliers in these more industrialized provinces have been taking a number of steps to ensure the labor shortage does not affect delivery schedules. As in 2003, many suppliers continue to deal with the situation by subcontracting to factories, or by setting up their own supplementary facilities, in less industrialized provinces such as Jiangxi, Anhui or northern Jiangsu where cheap labor is readily available. These provinces also offer the added benefit of lower manufacturing costs. Labor is 30 to 50 percent cheaper in Anhui, northern Jiangsu and Jiangxi provinces, as compared to Guangdong and Zhejiang. Land and other overheads are less expensive as well, reducing overall production costs by up 6to Electronics 20 percent. July 2002 However, the shortage of skilled workers in these areas has limited the production shift to low-end and midrange stuffed plush toys. For highend toys, suppliers continue to rely on their factories in more developed provinces, where there are easy-totrain and experienced workers, as well as English-speaking managers and designers. Suppliers with factories in the more industrialized areas have had to increase salaries of their workers, and provide them with better living quarters and dormitories to prevent them from moving to other industries. Apart from the labor shortage, China suppliers have also had to deal with soaring costs of raw materials, especially the main stuffing material polypropylene, the price of which increased by 70 percent in As a result, some makers plan to increase their export prices in However, the majority of suppliers will not pass on the increased costs to their buyers, and will instead cut overhead expenses and make do with lower profit margins. Industry structure Of the 6,000 registered toy companies in China, approximately 1,200 make stuffed plush toys, and an additional Exports $ million Source: Customs statistics Jan03-Sep J F M A M J J A S O N D Industry snapshot No. of manufacturers 1,200 Annual exports $1.5b Export ratio 90% Capacity utilization 80% Based on supplier interviews and industry estimates. 1,000 companies do not export directly, but subcontract for exporters. Most makers in the industry are small and midsize, and only a few are large-scale enterprises. Almost all are privately-owned with a handful of stateowned enterprises and publicly listed companies. Half of the privately-owned companies are foreign-invested or JVs with companies mainly from Hong Kong, South Korea, Taiwan, Australia, Germany and the United States. Almost all major OEM buyers and retailers such as Wal-Mart, Kmart, Disney, Carrefour, Target and Woolworths source from China, where the majority of production is dedicated to OEM. More than 90 percent of the industry s output is exported, mainly to developed countries such as the US, Germany, France, the United Kingdom and Japan. Some suppliers are also By destination N. America 49% Other 4% S. America 3% E. Europe 4% Asia 11% EU 29% 6 Market Intelligence: Stuffed Plush Toys

6 SUPPLIER PROFILES Canfine Toys Ltd Canfine Toys is a specialized maker of stuffed plush toys established in The company produces 400,000 stuffed toys monthly, and exports its entire output to the United States, the European Union, Eastern Europe, the Middle East and Asia. About 50 percent of production is shipped to OEM buyers such as Disney, Wal-Mart, Dollar Tree, Hasbro and Tomy. The company s export sales increased by 40 percent to $7 million in Products Canfine Toys manufactures regular stuffed plush toys and models with light and clock functions. The company has been increasing its line of multifunction toys in the past 12 months. Among these are stuffed toy mobile phone holders and electronic toys with one or two movements. These models are priced at about $2. The company invests $250,000, 4 percent of annual sales in R&D. It has increased its R&D staff from 27 to 60 in The team releases its own themed products and accepts design ideas from customers. All designs are evaluated by production engineers and sales teams before they are approved for production. Manufacturing The 10,000sqm facility in Guangdong has 50 assembly lines, 1,000 flat bed sewing machines, nine mold cutting machines, three cotton separators, three stuffing machines and eight metal detectors. In 2004, Canfine Toys invested in additional machinery, particularly for inspection. The company has 150 QC members who inspect the toys at each production stage. The QC team sets standards for incoming raw materials and inspection guidelines. The company evaluates raw materials to international standards. All incoming fabrics and other raw materials are examined based on EN71 standards and approved after tests of suitability for making stuffed toys. The company performs pull tests of up to 90 newtons or 20 pounds. The stems for eyes and noses are melted so they attach to the toy better. After passing through a small parts test, the stuffed toys go through a metal detector, and then under an air blower to remove extra fibers and dust. Another QC inspection is done before the products are sent to the packaging area. Like other companies in the Pearl River Delta, Canfine Toys also experienced difficulties in hiring experienced workers. Problems in its Guangdong and Jiangxi factories have caused delayed delivery and decreased Company profile Production checklist Assembly lines 50 R&D staff 60 QC staff 150 Sewing machines 1,000 Fabric cutting machines 9 Stuffing machines 3 Cotton separators 3 Metal detectors 8 output. To attract and retain personnel, it has increased income and improved both living and working conditions. It has also built another factory in Jiangxi province. Outlook To counter higher raw material prices in 2004, Canfine Toys purchased raw materials in bulk. It also simplified Company facts Year established 1996 Head office location Dongguan (Guangdong) Business type Foreign invested Direct exporter Yes Factory location(s) Dongguan (Guangdong) Total factory area 10,000sqm Number of full-time employees 1,500 Total annual sales (all products) $7.0m Annual R&D spending $0.25m R&D % of sales 3.57% ISO certified Yes OEM % of exports 50% Sales & output: Stuffed plush toys Total annual sales $7.0m Share of total sales 100% Annual export sales $7.0m Export sales growth +40% Total monthly capacity 400,000 pieces Average monthly output 400,000 pieces Capacity utilized 100% Average monthly exports 400,000 pieces Export ratio 100% Major OEM customers Hasbro, Disney (Hong Kong), Tomy (UK) Exports by volume Products Regular stuffed plush toys 100% DIY unstuffed toys - Electronic & mechanical - stuffed plush toys Markets United States 47% European Union 40% Eastern Europe 5% Middle East 3% Asia 5% 24 Market Intelligence: Stuffed Plush Toys

7 SUPPLIER PROFILES the production process and aimed for higher efficiency to save on costs. These steps have allowed the company to improve its profit margins. The company experienced a 10 percent decline in its export volume in 2003 due to the SARS outbreak but it was able to maintain its sales in It expects to reduce prices in the next 12 months. It will also expand its markets in the US and the EU. Popular export models Image file name CF jpg Regular stuffed plush toy Model CF Minimum order 1,000 pieces Packaging type Polybag and export carton Delivery time 45 days Indicated price $2.05 Description EF-velboa fabric; 100% polyester fiber stuffing; 8 inches high; available in brown; not machine washable Ranking Total sales 25* Export sales 18* Capacity 31* Output 21* Capacity utilized 1* Exports 21 Export ratio 1* Assembly lines 1 R&D staff 1 QC staff 2 CF040882A-D.jpg Regular stuffed plush toy Model CF040882A-D Minimum order 1,000 pieces Packaging type Polybag and export carton Delivery time 45 days Indicated price $2.10 Description Skin material velboa fabric; 100% polyester fiber stuffing; 9 inches high; available in various colors; not machine washable Ranking among all surveyed suppliers *Indicates equal rank with other suppliers Ranking Total sales 25* Export sales 18* Capacity 31* Output 21* Capacity utilized 1* Exports 21 Export ratio 1* Assembly lines 1 R&D staff 1 QC staff 2 Ranking among all surveyed suppliers *Indicates equal rank with other suppliers Market Intelligence: Stuffed Plush Toys 25

8 PRODUCT GALLERY PRODUCT GALLERY Regular stuffed plush toys JO-T8346.jpg Baoshi Group (profile page 64) Model: JO-T8346 Minimum order: 5,000 pieces Packaging type: Polybag Delivery time: 30 days Indicated price: $0.40 Description: Skin material plush; PP cotton stuffing; 7 inches high; available in any color; machine washable TA jpg Changzhou Changjia Arts (profile page 65) Model: TA Minimum order: 3,000 pieces Packaging type: Carton Delivery time: 40 days Indicated price: $0.68 Description: Skin material plush and cotton; acrylic boa stuffing; 15cm high; available in red; machine washable JO-V6902.jpg Baoshi Group (profile page 64) Model: JO-V6902 Minimum order: 4,000 pieces Packaging type: Polybag Delivery time: 30 days Indicated price: $0.50 Description: Skin material plush; PP cotton stuffing; 5 inches high; available in brown and white; machine washable TA jpg Changzhou Changjia Arts (profile page 65) Model: TA Minimum order: 3,000 pieces Packaging type: Carton Delivery time: 40 days Indicated price: $2.11 Description: Skin material plush; acrylic boa stuffing; 22cm high; available in brown; machine washable CF jpg Canfine Toys (profile page 24) Model: CF Minimum order: 1,000 pieces Packaging type: Polybag and export carton Delivery time: 45 days Indicated price: $2.05 Description: Skin material EF-velboa; 100% polyester fiber; 8 inches high; available in brown; not machine washable TA jpg Changzhou Changjia Arts (profile page 65) Model: TA Minimum order: 3,000 pieces Packaging type: Carton Delivery time: 40 days Indicated price: $5.50 Description: Skin material cotton print; acrylic boa stuffing; 60cm high; available in yellow; machine washable CF040882A-D.jpg Canfine Toys (profile page 24) Model: CF040882A-D Minimum order:1,000 pieces Packaging type: Polybag and export carton Delivery time: 45 days Indicated price: $2.10 Description: Skin material velboa; 100% polyester fiber; 9 inches high; available in various colors; not machine washable TX22622.jpg China Jiangsu International (profile page 66) Model: TX22622 Minimum order: 600 pieces Packaging type: Carton Delivery time: 60 days Indicated price: $3.90 Description: Skin material plush; PP cotton stuffing; 42cm high; available in brown and beige; not machine washable; conforms to EN71 Market Intelligence: Stuffed Plush Toys 103

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