Workers are testing "over-the-top" plastic toys, which will be exported to Russia.
Shantou Gaodesi Precision Technology Co., Ltd. factory automation production line.
China is the world's largest toy manufacturer and exporter, and Chenghai District under the jurisdiction of Shantou is one of the largest toy production and export distribution centers in China. After 40 years of development, Chenghai Toys started from a family workshop to undertake the processing of incoming materials from Hong Kong and Macao merchants, with a cluster of industries and a perfect supporting system.
Under the new crown epidemic, Chenghai toy manufacturing industry has suffered a chain reaction. The Southern Metropolis Daily Regional Coordinated Development Research Group's survey of the toy industry in Chenghai District found that many manufacturers are exploring the domestic trade market, the rise of cross-border e-commerce boom, "home economy" home toys and other new trends, powerful factories actively invest in automation equipment, turn to precision manufacturing, and precipitate brand value.
In recent years, Guangdong Province has guided more traditional manufacturing enterprises to jump to the highest levels of the value chain. Animation, online games, mobile games, IP, intelligent robots and other toy-related digital creative industries have emerged, intellectual property rights, scientific and technological content is the key to toy manufacturing to the high-end market.
"Variables" are everywhere
The epidemic has shaken the industry, and multiple pressures have superimposed
"The epidemic has hit hard", "many small workshops can't hold up", "several problems have collided together"... The COVID-19 pandemic has lasted for more than two years, putting pressure on the toy industry dominated by foreign trade.
Around December of each year is the most critical sales season in the foreign trade toy industry, which determines the annual revenue. According to the rhythm of previous years, before the Spring Festival, we must start to organize the selection of goods, orders placed in the spring from April to May, produced in the summer from June to August, and shipped in the autumn from July to September.
In 2021, the price of sea freight has soared, a cabinet is difficult to find, port blockages, land drivers are in short supply, etc., and the arrival time is delayed. Chenghai toy manufacturers reflect that the shipping time, Europe from 60 days to 6 months, the United States from 45 days to 3 months, freight increased by 5-10 times.
The epidemic has made the supply chain dysfunctional, accelerating the change in supply and demand. The speed of order turnover is accelerating. The overall elimination rate of new and old customers in Shantou Zefeng Toy Factory in the past two years has risen from 10%-15% to 30%. "After the epidemic, customers asked for fast shipments, which used to be shipped for 3-4 months under orders, and now they are shipped in 1 and a half months. Our response is to prepare raw materials in advance, organize production according to order forecasts, and make some inventory. The person in charge Cai Jinfeng said.
The common raw materials for toy process injection molding include polypropylene (PP), polystyrene (PS), propylene-butadiene-styrene copolymer (ABS), as well as hardware, electronic materials, packaging materials, etc., which have also encountered a "rising price tide", and the pressure is transmitted to the downstream industrial chain.
A number of toy manufacturers said that the raw materials purchased in 2021 increased by between 10% and 25%, while prices in previous years were relatively stable. Another manufacturer revealed that tens of millions of "pressure chips" have been taken out, and "chips" have appeared in the market.
Previously, Guangdong also suffered from a tight power supply situation. In Shantou and other industrial cities, high-energy-consuming factories adjust the rhythm of production, stagger the peak of electricity, and disrupt the rhythm of production. At present, the power supply has returned to normal.
E-commerce next journey
Traditional foreign trade channels were blocked, and the "exhibition hall model" was moved online
The epidemic has affected the operation of traditional wholesale channels, business has shifted from offline to online, and more and more manufacturers have invested in the tide of e-commerce. A number of young generation Chenghai toy manufacturers believe that cross-border e-commerce has grown rapidly and has great potential.
The "home economy" stimulated by the epidemic has stimulated cross-border e-commerce, especially beneficial educational home toys. Xie Weichun, general manager of Guangdong Yuxing Technology Industrial Co., Ltd. (hereinafter referred to as Yuxing Technology), has been engaged in foreign trade for 20 years. After the epidemic, its building block products have been sold to more than 100 countries around the world through e-commerce platforms, and the South American market will be added in 2021. Building block "enthusiasts" have strong community connectivity, expand to e-commerce, and can be more familiar with C-end customers. At present, the company's sales through e-commerce channels account for 50%.
Cai Jinfeng said that the ratio of cross-border e-commerce and traditional wholesale channels of his company's products to 2020 is 2:8, and the proportion change in 2021 is 4:6.
According to industry insiders, there are about 2,000-3,000 foreign trade companies in Chenghai, and 70% of toy orders come from overseas. There are many toy categories such as cattle feathers, "showroom mode" is unique to the local area, before the store and after the factory, merchants to Chenghai, first through the trade service provider to the exhibition hall to select products, and then sign a single with the manufacturer. The local leading Hongteng Toys Exhibition Hall exhibited more than 300,000 products and more than 2.2 million product databases. Before the epidemic, about 8,000-9,000 batches of merchants came to select products every year, from more than 100 countries.
When the epidemic struck, the "exhibition hall model" was moved online, and there were nearly 10 professional toy e-commerce platforms such as Xiao bird cloud in the whole district. Taking Xiao bird cloud as an example, it gathers more than 40,000 toy factories and more than 2.2 million toy products in the national industrial chain to select toys online and search for source factories.
At the same time, Chenghai Toys has opened up the domestic market through e-commerce, live streaming and other channels, and the toy trade format has shown diversified development.
The research group found that it is not easy for foreign trade enterprises to adjust their business and develop the domestic demand market, and they must make changes in terms of design style, production line, sales channels, etc. For cost and risk considerations, many manufacturers "dare not try".
"Do China's Lego"
Industry changes and intelligent manufacturing accelerates
The speed of change in the Chenghai toy industry has accelerated, especially in terms of categories. In the past, for B-end foreign trade sales, large and small enterprises won by volume, and the "price war" was endless. E-commerce will directly push manufacturers to C-end customers, "explosive models", "traffic", "surprising victory" and "IP brand" have more potential to carry goods.
Huada Toys Co., Ltd. (hereinafter referred to as Huada Toys) is a local leading building block manufacturing enterprise, the company's deputy general manager Chen Wei introduced, from the establishment of new products to the listing of two or three months, the company set up 3 R & D departments. The ratio of domestic and foreign trade of Huada Toys is about 6:4, and there are signed IP authorized building block products, such as Ultraman, Kumamoto Kuma and so on.
The quality of the mold determines the quality of the product. Taking plastic building block products as an example, the mold price ranges from 10,000 yuan to millions of yuan. To narrow the gap with lego, the international leading brand of building blocks, domestic manufacturers must compete in precision.
Chen Wei said that some precision machines rely on imports and cost a lot. Huada Toys Dust-free Processing Center has several imported wire cutting machines, and the company has invested 20 million yuan for imported machines. Chen Wei said: "Doing 'China Lego' is the dream of the building block industry. ”
Rising costs, difficulty in recruiting workers every year, and aging workers are thorny problems in front of manufacturers. Toy manufacturers say that at the beginning of 2021, salaries rose by 10% year-on-year.
Large factories are experimenting with replacing manpower with machines. Shantou Gaodesi Precision Technology Co., Ltd. was founded in 2017 and works for several local enterprises. The factory is equipped with a double-storey intelligent warehouse, with a total area of more than 10,000 square meters, a warehouse capacity of 120,000 boxes of building blocks, each box is equipped with a bar code, the robot sorts at a speed of three meters per second, and 36 robots replace 240 workers. Yuxing Technology's building blocks are also produced here.
In recent years, Huada Toys has invested 15 automated production lines, each line has invested more than 1 million yuan, started up 24 hours a day, and no longer needs three-shift assembly line workers. In the sorting workshop, building blocks of different shapes and colors are fished on the conveyor belt, distributed to the corresponding boxes, and then automatically packaged.
In the face of various changes in the internal and external environment, the Chenghai toy industry is also more and more aware of the importance of increasing the added value of the industry. Popular culture fuels the waves, the capital market intervenes, commercial operations drive "traffic", and the value generated by IP operations is sought after by the market. Yang Yusheng, assistant general manager of Aofei Entertainment, said that Aofei Entertainment transformed from a traditional toy manufacturer, and its trademark awareness began to emerge from the 1990s, and then introduced animation such as four-wheel drive kid, using animation IP authorization to drive the development of the toy industry. Relying on the R&D centers in Shenzhen and Guangzhou, Aofei Entertainment and other companies have established "industry-university-research" cooperative relations with universities to explore the transformation of "animation IP + mobile games + network + pan-entertainment" path.
China Shantou (Toys) Intellectual Property Rights Rapid Protection Center has settled in Chenghai, it is understood that the rapid examination of toy design patents and the issuance of authorization certificates, from application to authorization only take 3 to 10 working days. At present, there are 30,169 valid registered trademarks in toys.
"The low-cost, labor-powered way of making money in the past has gradually left us." Fan Wei, director of the Department of Electronic Information Engineering of the School of Engineering of Shantou University, said that Chenghai toys have a fast manufacturing and development speed and a high cost performance ratio, but many enterprises lack long-term planning and have a long way to go in increasing the added value of products such as industrial design, attention to research and development, and intellectual property protection.
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Chenghai District covers an area of 345.23 square kilometers, but the toy industry market has more than 43,000 households. Chenghai is full of family workshops, and three or five storeys of farmers' self-built houses integrate factories, warehouses and food and housing, supporting the urban ecology of "mixed production and residence". The upstream and downstream division of labor in the industrial chain is complete, the parts manufacturing is subcontracted layer by layer, which is very flexible, and the final toy product is usually completed by multiple collaborations.
In 2021, there are 332 industrial enterprises in Chenghai, of which toy companies account for nearly half, with 6 listed companies, 2 toy companies listed on the New Third Board, and more than 100,000 toy industry employees.