Global firms have lots to play for in China's toy market

Jerry Storch, chairman and CEO of Toys "R" Us, which is based in New Jersey, said at the opening of the company's Beijing store in August, "international expansion is a key part of our overall strategy, and we are committed to further growth and investment in our business in China".

"Our expansion into Beijing is an important next step as we aggressively extend the Toys "R" Us brand throughout Asia."

In August, two Toys "R" Us stores, including the one at Joy City Shopping Mall, opened in Beijing. The world's leading retailer of toy and baby products plans to open around 30 stores across 21 cities in China. It also launched its own online shopping site in China last month in a bid to tap into the country's fast-expanding middle-income group.

To appeal to China's education-minded parents, Toy "R" Us is also introducing more educational toys, such as microscopes. It has also designed toys specifically for Chinese kids, such as a doll in the likeness of Balala the Fairy for girls and Battle Action Role-Play for boys.

"We hope to put in more local Chinese characters that kids in China know very well," said Murphy, who added that there will be a wider assortment of educational toys in the future.

It's unlikely that every overseas toy company will have the clout or the expertise of a major retailer such as Toys "R" Us, but experts say in China's emerging market, there is still time to adjust strategies.

Mattel, based in California, spent millions of dollars to open a six-story flagship store in Shanghai in 2009, but closed it last year. The Barbie maker did not provide a reason for the closure.

"They didn't think long and hard enough about whether Chinese girls wanted to look sexy or they wanted to look something closer to what you'd associate with Japan - cute. So Hello Kitty is doing well, but Barbie is an example of crash and burn," said Karl Gerth, author of As China Goes, So Goes the World: How Chinese Consumers Are Transforming Everything.

Mattel is now expanding its distribution network into smaller Chinese cities, Jean-Christophe Pean, Asia-Pacific general manager of Mattel, said earlier.

And experts say that as China shifts from being a major toy maker to a toy consumer, the nation welcomes and needs these products from foreign companies. In order to expand their market share, Chinese experts suggest that international brands should actively promote the culture of play.

Liang Mei, executive vice-president of the China Toy and Juvenile Products Association, said the big problem with the market is that consumers, especially young parents, really do not understand the culture of toys.

"Most Chinese parents still regard toys as a reward to their kids, instead of a necessity of their daily life. But you know, to play is the nature of kids," she said.

Liang added that with China's population, it won't be too difficult for international brands to reach a sales volume as big as their traditional markets.

"According to the survey on toy consumption which the association conducts every year, major brands are not the most popular products, and international toy companies still have very limited influence in China, mainly in major cities," she said.

Liang suggested that international companies should cooperate more with local retailers to help them create a bigger network in China.

"The most important thing is to have consumers, especially those parents who understand the importance of toys in their children's lives. We need to arrange the events to have them and their parents playing together," she said.

Wang, the Beijing housewife, is beginning to realize that toys could be vital for her son's upbringing.

"Different from the stores in my childhood, where all the products were put on shelves, most stores today create play areas," she said.

"It seems that those toys are able to help my son develop his independence and interests on his own."

zhaoyanrong@chinadaily.com.cn