Meet Princess Secret, a potential best friend forever for the children of China's swelling mass of consumers, who increasingly demand better-quality toys at cheaper prices than foreign brands can offer. The doll's manufacturer, closely-held China Focus (Yiwu) Ltd, is among Chinese exporters seeking licenses to sell on the domestic market as overseas growth flags.
"Our products probably cost twice as much as those designed for the local market, but that's not a problem because they're still cheaper than imports," Maggie Zhang, a sales manager, said at the country's biggest trade fair last month, while staffing a stall stacked with Princess Secret pink dolls, gloves, scarves and cosmetic bags.
The nation's toy market is expected to double to 60 billion yuan (US$9 billion) by 2015 from 2010, according to the China Toy & Juvenile Products Association. In contrast, overseas sales grew 8.9 percent in the first nine months of the year, lagging the 23 percent growth in total China exports.
"Chinese toy exporters are coming to a turning point where domestic growth is starting to outpace that of overseas orders," said Hua Zhongwei, a macroeconomic analyst with Huachuang Securities in Beijing.
Economic growth
Three decades of economic growth averaging 10 percent a year has lifted hundreds of millions of people from subsistence levels of poverty, spurring sales of consumer goods such as Coca-Cola Co sodas and McDonald's Big Macs.
China's retail sales rose 17.7 percent in September, topping the 17 percent pace that was economists' median estimate and also the reported level in August. Per capita disposable income for people in towns and cities rose 8 percent to 19,109 yuan last year, and 10.9 percent to 5,919 yuan for those in rural areas, according to government data.
Gross national income adjusted for the cost of living jumped 58 percent to US$7,570 in the four years to 2010, World Bank data show. Still, that's lower than the US$47,120 in the United States and US$38,140 in Germany, and means toys like El Segundo, California-based Mattel Inc's best-selling Barbie remain expensive for most Chinese families.
Mattel in March closed its first Barbie-dedicated store in China two years after opening the six-story Shanghai outlet. The toy company, which didn't provide a reason for the closure, had lowered the outlet's sales targets by at least 30 percent.
Mattel is now expanding its distribution network into smaller Chinese cities, Jean-Christophe Pean, Asia-Pacific general manager, said in an e-mailed response to queries.
Chinese toy exporters, who made US$7.9 billion of overseas sales in the first nine months according to customs data, are also turning their eyes to home because of weak prospects in the US and Europe.
The US Conference Board's confidence index slumped in October to the lowest level since March 2009 as Americans' outlooks for jobs and incomes soured, figures from the New York-based private research group showed on October 25.
The US toy market is about US$21.9 billion and the global market is about US$83.3 billion, according to Port Washington, New York-based NPD Group, a market research company.
Growth in shipments to Europe, China's biggest export market, slowed to 9.8 percent in September, from 22 percent in August, amid the sovereign-debt crisis in euro-region nations. Outlook for trade this quarter and in the first three months of next year is "grim," Shen Danyang, a spokesman for China's Ministry of Commerce, said at an October 19 briefing in Beijing.
Source:Shanghaidaily