Eastern insights, global impact

Over the past several decades, Hong Kong has grown to become a world leader in the manufacture and export of children's playthings. As a major player in the industry, this global business hub has a keen sense of the market's activity, including trends and developments. PLAYTHINGS spoke with the Hong Kong Trade Development Council's Robin Chiu about some of them.

What notable changes have you seen in the toy industry during the last several years?

Chiu: What we've seen in the past decade is a very, very conspicuous movement toward original design. Back in the '80s there was a lot of "this is my design"—whether it was Fisher-Price or Hasbro or European or Japanese companies—and "just make it for me." In the '90s there was a maturation process. The production base has moved offshore from Hong Kong, as you know, but the design aspect (of toy making), product development, the packaging and marketing are all based in Hong Kong and are much stronger now. Original design manufacturing is the key now.

Another trend we've seen is licensing manufacturing. Licensed characters, licensed games and other licensed products are the big thing happening in Hong Kong right now. There is a lot of participation in the category.

The third change is outsourcing production, which has been to add value. Hong Kong is the largest toy manufacturer in the world, but we are outsourcing the production for efficiency's sake. China is definitely our largest producer. A lot of the toys are designed and specified by Hong Kong companies per se and produced in China.

To what do you attribute Hong Kong's growth as a leader in the toy industry?

Chiu: The quality has become better as there are now more designers in house. A lot of innovations and new ideas are coming out of Hong Kong.

And safety is a big concern. Particular attention is paid to safety and quality by our manufacturers, who are aware of all the specifications.

Another is logistics. Our logistics are very efficient. You know the world is very different; every one wants JIT (just in time). The efficiencies of Hong Kong's port are tremendous. We can turn a vessel around in 24 hours. The speed and efficiency of the port is really astounding.

Which toy category do you see having the greatest growth potential?

Chiu: Interactive toys, popularized by the widespread development of technology still have great potential; also the electronic and digital toys. And, again, licensing. It is a very important force here and important to Hong Kong. Its growth in the rest of Asia—to China and Southeast Asia—are still to come.

Which global regions do you see having the greatest potential for toy exports?

Chiu: It would be Asia and within Asia—particularly China. It is expected that China's trade with the world will double in five years, and, to my mind, that is a conservative estimate. With the softness in the world economy right now, China is a bright spot. Exports to China grew 4.2 percent for toys, and we don't see any substantial slackening.

What about export of toys to the United States?

Chiu: The volume has slowed down. Through August 2001, toy exports to the United States were down 13.4 percent, which is stronger than the overall decline, which is seven percent. Only a slight reduction had been forecast. This is no longer a slight reduction, but retail as a whole has slowed.

We are not looking for the downtrend to turn around miraculously. The outlook for next year depends on how consumer confidence and spending turn around.

As regional director, the Americas, for the H.K.T.D.C., Robin Chiu oversees 12 offices and is responsible for an active program of trade development events.