7 Dec 2011
Cartoon characters will be one of the main categories exhibiting at the HKTDC International Licensing Show next month
Faced with rising labour and material costs, international toymakers increasingly rely on the licensing industry to help them find new ways to turn a profit. Nowhere is this the case more than in Asia, and Hong Kong, in particular, given the city’s close proximity to toy manufacturing in the Pearl River Delta.
“Obviously, the toy industry is facing quite difficult times,” says Frank Padberg, Business Development Manager, Mercis BV. “The sharp rise of manufacturing costs in China – the world’s main toy supplier – has hit the toy industry relatively harder than other categories. This is because of the relatively high labour component in most toy products compared to, for instance, electronics. Toy manufacturers and toy licensees cannot, or can only partly, pass on this increase to retailers,” he says.
“On top of that, the toy retail landscape has diminished, as independent toy retailers are suffering heavily and toy licensees and manufacturers have to increasingly deal with the few buyers at the remaining toy chains.”
Miffy the Movie
Coming to a theatre near you: production started this year of the first film featuring the cartoon character Miffy
“With the changing toy retail landscape, it is important to ensure good distribution,” says Mr Padberg. “As Internet toy sales have also become common, we are looking for partnerships with major webshops. In mainland China, distribution is still a major challenge, therefore we opened our online flagship store in the brand section of Taobao in November. Through this store, we hope to reach into all of China,” he says.
To reach an even wider audience, Mr Padberg says, the Dutch character will debut on the big screen. “After developing the successful Miffy and Friends TV series, stage shows and musicals with Miffy, the logical next step was to bring Miffy to the big screen,” he says. “We started production of Miffy’s first movie, together with partners Telescreen and A Film in June this year. We want this to become many pre-schoolers’ first cinema experience and we expect the film to bring a lot of buzz and new opportunities for the brand that will extend to licensing.”
The movie is expected to hit cinemas in Europe by early 2013, but Mercis BV is preparing to present the production to partners at next month’s Hong Kong International Licensing Show.
“I think the market is changing, definitely,” says Noletta Chiu, Medialink Entertainment Ltd’s Vice-President of Licensing. “Take something such as Garfield, which has been traditionally known as a kid’s brand and we are now extending that into a fashion brand. This is a new look and we have been lucky enough to find a new licensee in China that will be launching this line very soon.”
While toys remain at one end of the market, modern demands have sparked the need to look out of the box.
Garfield is set to launch as a fashion line on the Chinese mainland
“We have other major clients that are also expanding into fashion brands and we see this as a growing trend,” she says. “With kids today, you will find that most of them are getting more mature in their tastes rather quickly. Traditional toys are no longer enough. We actually think that these pre-teen, teen and high-teen markets are getting bigger and bigger and fashion is one way to tap into it.”
The popularity of online gaming characters such
The Hong Kong-based international licensing agency picked up on the Angry Birds Internet game phenomenon and has helped its march through the Greater China region.
Ivan Chan, President of Promotional Partners Worldwide, which has introduced popular game characters such as Angry Birds in Greater China
It is, again, a reflection of the changing marketplace, Mr Chan says.
“Traditional toys are only attractive to kids who are aged below six,” he says. “Instead, video games, computer games, online games and iPad apps are now the things that occupy kids, and this is where a lot of the opportunities are now coming from.”