Playing Ahead of the GAME Toy-making expertise in Guangdong Province creates numerous products, often highly complex, that amuse and entertain people worldwide.
Standing at the forefront of the Chinese mainland’s opening and reform, Guangdong Province has used a successful “three plus one” strategy (combining custom manufacturing with materials, designs and samples supplied, plus compensation trade) to manufacture and export toys since the 1980s.
Fully utilising large-scale foreign investment and advanced technology, Guangdong surged ahead, and has been leading the nation in toy making since the 1990s. At its peak, the province accounted for 78 per cent of national toy production, and it remains far ahead of other provinces on quality, variety and market share.
Not only is Guangdong China’s top toy-manufacturing province, the province also ranks as the world’s largest toy production and export base. The US, EU and Japan are its major export markets. In 2017, Guangdong’s total toy exports reached US$22.7bn, representing a year-on-year growth of 24.1 per cent and 51.49 per cent of national toy exports in value. Among these exported products, traditional toys worth US$13.04bn, representing a year-on-year growth of 14.36 per cent and shared 54.47 per cent of the nation’s export in this category.
As early as 1998, David Miller, then chairman of the International Council of Toy Industries and president of the US Toy Industry Association, commented,“China is the largest toy export country in the world, and Guangdong is the largest toy export province in China. Toys from Guangdong are so much better in quality than those from counterparts elsewhere in the world, and the province always stands as a quality exporter to the US.”
Guangdong’s edge lies in its advanced technology and equipment and complete production chain. Abundant supplies of raw materials, including parts and components, and moulding, fulfil manufacturers’ every need. The toy industry offers richness in its variety without sacrificing quality.
There are about 150,000 types of toys in the world, all of which are produced in Guangdong. The Shenzhen area alone produces more than 100,000 types, with its plastic and electronic toys being the most popular. Statistics from Chinese Customs for January–September of 2018 show high demand for “other toy sets”, “dolls” and “educational toys”.
Most Guangdong toy enterprises operate on the Pearl River Delta or in the Chaozhou-Shantou area, home to many famous brands. Shenzhen, Dongguan, Shantou and Guangzhou excel in producing remote-controlled items, auto models, plastic toys and voice-activated toys that require sophisticated technology. Zhongshan, Zhuhai, Foshan and Jieyang are famous for their perambulators, children’s battery-operated vehicles, dolls and electronic pianos.
All seven toy companies listed on the A-share stock exchange come from Guangdong, namely Alpha Animation & Culture, Goldlok Toys, Huawei Toys Craft, Qunxing Toys, the Rastar Group, Banbao and Shifeng Culture. Moreover, SMEs such as Loongon Animation & Culture, Cheerson Hobby Technology and Kaidi Wei Culture are listed on the new National Equities Exchange & Quotations System.
Guangdong has now entered a new era of large-scale industrialisation. Its toy enterprises seek to add value through independent innovation by transforming from “Made in Guangdong” to “Created in Guangdong”. They aim to continue leading the world in the next round of competition.
Shenzhen, Dongguan: a tale of two cities
Neighbouring cities Shenzhen and Dongguan have similar structures for toy production.
Starting out as relocation bases for Hong Kong companies, they prospered using the “three plus one” strategy. Thirty years of evolution have made both cities famous for their advanced technologies and quality products.
By no coincidence, they rank first and second among Guangdong’s toy-producing communities. In 2017, Shenzhen exported US$6.227bn worth of toys versus Dongguan’s US$4.302bn, respectively 34.17 and 23.62 per cent of the province’s output. Their best-known, big enterprises include Shenzhen’s Early Light Int’l, Jauntiway Toys, Potex Toys and GBC Glory Business, plus Dongguan’s Lung Cheong Int’l, Chi Lok Bo Toys, Silverlit, Dongguan Maisto Industries and VTech.
After years as “the world’s factories”, Shenzhen and Dongguan have reached a development crossroads. Although still on a fast track to economic growth, both cities stand at the edge of marginalisation due to lagging added-value production.
This has led municipal governments to promote upgrades and transformation by providing “barrier-free access” for factories to become foreign-funded enterprises without deterring ongoing production. Dongguan leads the country in adopting this policy to achieve higher-level manufacturing through enhancing technological know-how, creating higher product profiles and establishing its own brands.
Chenghai: multiple capabilities
Strategically located on the Hanjiang River Delta in eastern Guangdong, Chenghai’s toy industry has followed an unusual path toward own-brand production and continuous upgrading, thanks to the municipal government’s guidance and support.
The vitality of Chenghai’s toys industry is evident in its quality and innovation. As at 2016, CCC certified enterprises in Chenghai amounted to 1,217, and together they hold a total of 4,006 valid certificates, representing one third of valid certificates held by their counterparts in the whole country. Moreover, the enterprises also own five national famous trademarks, two national famous brand names, 31 Guangdong provincial famous trademarks, and 27 provincial famous brand names.
Chenghai’s toy enterprises compete in innovations and advanced technologies. There are 33 newly recognised high- and new-technology enterprises, 4,140 new patent applications, 3,294 authorised patents, and 15 new PCT international patent applications.
Moreover, improvement in precision manufacturing in recent years saw the mushrooming of brand name enterprises with distinguished strength in advanced technology, innovation and quality control.
Chenghai’s toy industry enjoys advantages related to diversified development and product variety. Its major production categories include:
animation-derived toys like those from Alpha Animation & Culture or Loongon Animation & Toys;
electronic remote-controlled toys, which have excelled recently in product innovation and enhanced quality. The R&D on remote-controlled planes and cars now sets the pace nationally. Huawei, Attop Technology, MJX R/C and Guangdong Feilun Technology are leading the way;
scaled-model vehicles, which have advanced quickly into overseas markets, thanks in part to helpful authorisations from prestigious automobile brands, like Mercedes-Benz, BMW, Audi, Lamborghini and Land Rover. Among the standouts are Rastar Group, Xinyu Crafts & Toys, MZ Model and Shuangxin Toys;
electrical children’s cars, which form a flourishing new segment. Companies have undertaken intensive, large-scale roductions, and these products are winning popularity overseas. Qunxing Toys, Huada Toy and Hengtai Plastic top the list of famous manufacturers;
die-cast toys from Shifeng Toys, Hengdi Industry and others;
infant toys led by the likes of Huile Toys and Dove Toys, which are gaining rising market share; and
construction toys from leading brands such as Cubic Fun Toys, BanBao and LianHuan Toys & Crafts.
Zhongshan, Foshan: wheel rendezvous
China produces a wide range of wheeled products, including baby perambulators, baby walkers, scooters, powered ride-ons, bicycles and tricycles. Zhongshan excels at making perambulators while Foshan excels at making baby walkers. In Zhongshan, one county alone, Dongsheng, has a base of about 40 to 50 leading manufacturers.
The most famous enterprises include Baobaohao Children Products, Roadmate Group, Dorel Industries Inc and Newstars Baby Products, all of which are based in Zhongshan. In addition, Foshan is home to Yinghao Toys, Suihua Toy, Xingmuzai Children Articles and Yonghua Vehicle.
Baobaohao and Roadmate have been designated China’s famous brand names. They, together with Zhuhai’s Sunnylove Children Products and Dongguan’s Chi Lok Bo Toys, Child Star Toy Products and Chuanghua Ind’l, lead the toy industry in search of new ideas.
Guangdong’s sector specialising in children’s cars and toy vehicles started early and has enjoyed high levels of success. This has sustained the country’s first children’s vehicle enterprises. Both Hong Kong and Taiwan manufacturers participated in the early stages until private local enterprises became mainstays.
Today the sector features outstanding quality and innovation. With comprehensive and coherent production chain facilitating product design, supply of materials and model processing, quality is guaranteed. R&D on mid- to high-end products is providing even more vitality.
Enterprises are striving to establish distinctive brand names and to build solid reputations overseas. Years of effort have led to a mushrooming of famous brands and to sound OBM production with higher price bargaining power.
In many families all over the world, toy vehicles are seen as necessities, and so global demand remains high.
According to the US Toy Industry Association, American consumers bought US$1.42bn worth of children’s cars and vehicles (excluding perambulators) in 2017 while European markets consumed a similar total, and global sales are estimated at more than US$5bn.
Although challenged by keen competition and rising costs for raw materials, labour, rent and management, Guangdong Province’s toy industry remains confident that, with concerted efforts, it will establish an even stronger presence in global markets, especially in emerging economies.
For more information, please contact:
Guangdong Toy Association
2/F, 1 Zheng Ping St South, Tao Jin Rd North,
Guangzhou, Guangdong Province, China