Christmas "Robbery" - Shenzhen Toy Enterprises' Internal And External Difficulties, Orders Dropped By Two Or Three

On the afternoon of December 18th, Wu Jidong took his luggage to T108 train and returned home from Shenzhen to celebrate her new year in Fuyang, Anhui.

More than a month away from the Spring Festival, but Wu Jidong's toy factory had to leave early because there was no order to do.

This situation is not uncommon recently in the Pinghu town of Longgang District, a large and small toy factory.

The end of the year is the off-season for toy production but it is a toy

Data obtained from authoritative departments show that toys have been in the country for many years.

Through a longer period of observation, it can be found that Shenzhen has been built as a city since its establishment.

On the one hand, we are constantly exploring new overseas markets or domestic markets. On the other hand, we need to increase product innovation or create our own brands. Some of Shenzhen's toy enterprises are beginning to redeem themselves in all kinds of hardships.

Christmas robbery

Gu Wu, general manager of Shenzhen huun Kun Industrial Development Co., Ltd., said this year's Christmas order has long been over, and the whole toy industry is in a very bad state.

Gu Wu said, in fact, this miserable situation has been shown as early as May this year.

Song Junpeng, sales manager of Gongming Xinrong gift factory, Shenzhen, which has been doing export trade for more than 10 years, has also revealed that the foreign Christmas orders this year will probably drop by 20% compared with the previous years, and the volume of enquiries has also decreased.

Industry information shows that about 90% of the world's Christmas gifts and toys are produced in China.

According to past practice, starting from the second quarter of the year, domestic gifts and toy manufacturers began accepting orders from Europe and the United States for Christmas products, and then shipped them to the European and American markets according to planned production until the end of December.

For this industry, many manufacturers rely on the Christmas market for their annual profits.

Not only Christmas orders have dropped significantly, but most toy companies have seen a sharp decline in exports throughout the year, and even the entire toy industry is facing another heavy blow.

Yatake Naoko, a resource rich buyer, is under immense pressure: "the new EU Directive on toy safety, which has been formally implemented since July 20th, is very desperate. Our orders in the European market this year dropped by about 50%."

In December 13th, the Vice Minister of Commerce, Zijin Mountain, revealed that China's share in the US and Europe market has not risen since the beginning of this year's foreign exchange pformation and upgrading demonstration base and the overseas marketing center exchange conference. The toy industry has dropped by 2%, which is higher than that of traditional manufacturing industries such as textiles, clothing and furniture.

Liu Yanfang, Secretary General of Shenzhen toy industry association, said that most toy companies' orders this year dropped by 20% to 30% compared with last year, and some even dropped by half.

According to customs statistics, the first three quarters of 2011, Shenzhen exported toys $2 billion 130 million, an increase of 2.5% over the same period last year.

But Liu Yanfang stressed that the export situation could not be judged by the increase in export volume because the increase in export volume was largely due to the increase in export prices due to increased production costs.

According to customs statistics, the total toy exports in Shenzhen amounted to US $6 billion 500 million in 2006, accounting for 37% of the total export volume of US $17 billion 700 million, accounting for 46% of the total toy export volume of Guangdong province by US $14 billion.

But in 2010, China's toy exports totaled 21 billion 6 million US dollars, while Shenzhen toy exports totaled US $4 billion 100 million, accounting for 19.5% of the total toy exports of the country, accounting for 31.7% of the total toy exports of Guangdong.

It is certain that the proportion of toy exports in Shenzhen will continue to decline in 2011.

Be beset with troubles internally and externally

The experience of Shenzhen toy enterprises is essentially different from that of traditional manufacturing industries such as clothing and electronics in recent years.

Many Taiwanese and Hong Kong toy enterprises have long dominated the OEM (Foundry) industry, and have no product development and marketing capabilities. The number of Taiwan funded or Hong Kong funded toy companies that have been closed down in the past two years is large.

In July 14th, as the world's second largest toy brand agent factory, Dongguan Su Yi Toys Co., Ltd. suddenly collapsed due to cost pressures, causing the exclamation of the fate of toy enterprises.

The high cost of comprehensive cost and the appreciation of the renminbi have led to the profits and profits of toy companies.

A toy manufacturer in Shenzhen said that the price of rare earth metals has been soaring this year, resulting in the price rise of motor.

In April 1st, a motor supplier telephoned and directly increased the price of the motor from 2.95 yuan to 5.8 yuan. "I said before I paid you 600 thousand of the advance payment, it would not work." the other side said, "sorry, I am calling you to raise the price now."

From mid November to mid December, the Hongkong Federation of industry, Hongkong Toy Association and Hongkong toy manufacturers' survey of 149 Hongkong toy manufacturers in the mainland found that rising prices of raw materials, rising wages in the mainland and weakness in export markets were the biggest challenges facing Hongkong toy manufacturers at this stage.

62.4% of the respondents said their turnover in 2011 was worse than last year, and 57% expected business to deteriorate next year.

Liu Yanfang and Gu Wudu believe that the economic situation in Europe and the United States is low, the European Union and the United States have improved the standards of toy safety, and the cost of labor and raw materials has risen sharply.

The simultaneous attack of various factors is the direct reason for Shenzhen toy enterprises to suffer from both sides.

But the fact proves that the OEM survival mode of toy enterprises is not sustainable.

Shuffle, find a way out

Some mainland private toy enterprises have escaped from the process of export to domestic sale in the past two years. The different experiences of domestic and foreign toy manufacturers have led to industry reshuffle.

Gu Wu said: "the closure of a large number of Taiwanese and Hong Kong toy enterprises led to the pfer of market orders to domestic enterprises, many of which inevitably shifted to us. Some of the surviving foreign toy factories began to seek OEM production from us, while private toy manufacturers in Shenzhen and Shantou also absorbed the production orders or sales management talents of these foreign enterprises."

Opening up a new export market is a helpless choice for toy manufacturers.

"We have decided not to take the EU as our main export area," Gu Wu said.

Gu Wu made good growth in its exports throughout the year by opening up the Russian market in 2011. "We have done very well in the Russian market this year, and have taken orders for about about 3000000 US dollars."

But in recent months, emerging markets such as Argentina, India and Mexico have also seen the trend of strengthening trade protectionism.

In addition, an analysis report of Shenzhen Customs said that since the beginning of this year, the state has raised the interest rate of deposit and lending and the deposit reserve ratio of financial institutions for many times. The financial strain has seriously affected the normal production activities of enterprises. Most of the small and medium-sized enterprises in toy enterprises are facing more severe pressure. For example, in Dongguan, Shi Pai Town, known as "toy city", more than 60% small-scale factories have been shut down, and the toy industry is facing a sharp increase in the risk of a new round of shuffling.

Many interviewed insiders admitted that, on the one hand, toy enterprises needed the cultivation of core competitiveness, and on the other hand, the state support policies should be introduced. Otherwise, Shenzhen toy enterprises will have a large area of bankruptcy.