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Toy-making a potential profit playground
Vietnam’s baby boom has created opportunities for local toy makers, although many seem slow off the mark, allowing cheap products from China to dominate the market.
Thirty-six percent of Vietnam’s population is aged under 14, making the country a potential profit playground for toy manufacturers, Nhip Cau Dau Tu (Investment Bridge) newspaper reported.
At present, cheap Chinese products account for about 80 percent of toy sales in Vietnam.
Vietnamese-made products make up a small portion of the remaining 20 percent of sales, which are mainly mid-range and high-end toys.
Before entering the industry, toy-makers must be sure they are able to meet all government safety requirements on children's toys.
“The toys cannot be too small, they must be sturdy enough not to break when thrown on the ground and any broken pieces cannot have sharp edges,” said Lieu, an employee of the Duc Thanh Wood Processing Joint Stock Company, one of largest Vietnamese toy-makers, known for its Win Win Toys brand.
“This is not the type of business that can reap super-fat profits because the customers are children, so the quality must be high,” Lieu said.
Catering for children, who become bored with their toys easily, means extensive research and development (R&D) is required – at considerable expense.
Most toy-making firms have teams of designers and researchers who work closely with teachers and families.
“The budget for R&D often takes up one fifth of our total spending,” said Nguyen Thanh Vu, sales director of Vietnamese toy manufacturer Nam Hoa Co.
The startup costs for a toy-making enterprise can be millions of dollars, Vu said.
But the virtually untapped market has brought encouraging results for a number of Vietnamese toy producers.
Duc Thanh reported sales of Win Win Toys brand of more than VND2 billion (US$117,000) last year.
Duc Thanh Wood Processing Joint Stock Company General Director Le Hai Lieu said sales of the brand were expected to reach VND5 billion to VND7 billion ($292,300 - $409,200) this year.
Luu Van Quang, general director of Hanoi-based toy production firm Veesano, also said his company was enjoying an average yearly growth of 20 percent.
“But by increasing our production scale, we could boost that to 25 to 30 percent,” Quang said.
Veesano currently has 500 toy models on sale and the firm is planning to introduce dozens of new products by the end of this year.
Nam Hoa is also planning to launch 30 new products in the last half of 2009.
Toy-makers say they are responding to an increasing demand from Vietnamese parents, who want reasonably-priced made-in-Vietnam toys for their children.
Domestic toys also have an advantage over imported brands because they are designed to suit Vietnamese culture.
“I often go on overseas business trips and bring back foreign toys for my kids,” Ho Chi Minh City resident Nguyen Thi Phuong Chi said. “But the prices are really high and the toys make my luggage heavier.”
“And not many parents are able to afford them so we really need domestically-made toys to give Vietnamese children the same joy as foreign kids,” she said.
vietnews, NhipCauDauTu
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