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Booming Business(HKTDC Toys & Games , Vol 01,2009)

Chenghai Toys Industry

Chenghai's toys industry clearly demonstrates strong capabilities in product innovation, which is helping it gain a leading position both domestically and overseas.

One of the most important and dynamic industrial districts in Shantou city on the southeastern Chinese mainland, Chenghai covers an area of more than 345 square kilometres and boasts a population of about 720,000.

Today, apart from being a leading "toys and gifts city", Chenghai is also well regarded as a "high-grade model" of the entire toys industry in Guangdong Province.

After many years of development, Chenghai's toys industry has evolved into a highly innovative centre housing numerous own-brand manufacturers.

Production is concentrated in three main areas - Fengxiang, Chenghua and Guangyi - and eight specialised zones that form a conglomerated industrial base with a full production chain incorporating everything from design to manufacturing and shipping to sales and distribution.

Leading the charge are some 20 well-known and large-scale toys enterprises, such as Auldey Huawei, with an annual production value of RMB50m each. The industry is further energised by the activities of a highly motivated group of enthusiastic small- to-medium-sized companies.

There are almost 3,000 toys companies in Chenghai at present, and a total workforce of more than 100,000. In 2007, Chenghai's total production value of toys and gifts reached RMB14.5bn.

In recent years, technological advances and brand-name innovations emerged as the major concerns of Chenghai authorities looking to lead its toys industry into a highly competitive market demanding high grade, quality products.

Thanks to these efforts, five enterprises in the area have now been graded as "nationally recognised hi-tech entities". A further 18 firms are provincially recognised as being technologically innovative, while 25 more are regarded as privately owned technological enterprises.

With the number of patented products reaching more than 6,000 items, Chenghai's toys industry clearly demonstrates strong capabilities in product innovation, which is helping it gain a leading position both domestically and overseas.

In fact, Chenghai has implemented a "brand name" strategy, encouraging toys makers to establish their own brand names. Toys manufacturers are also urged to register their products as "Chenghai Toys", and to take advantage of Chenghai's promotional efforts in order to build an internationally recognised brand name.

At present, Chenghai is producing three national brand names in addition to 12 Guangdong Province brands. It also caters to four licensed mainland trademarks and 33 Guangdong Province brands. It is this ability that has enabled Chenghai's innovative toys industry to progress rapidly into a famous high-end manufacturing sector.

Financially, Chenghai's toys industry has achieved a breakthrough in gaining direct loans for development by means of public listing. For example, Alpha Animation's application for public listing has finally been approved, making it the first "toys stock" listed on the A-share market of the Chinese mainland.

Meanwhile, other well-established manufacturers, such as Huawei Toys, Xinghui Toys and Qunxing Toys, are also showing great enthusiasm and making preparations for public listing.

To further enhance the quality and innovation levels of the toys industry in Chenghai, the local government has purposely established a foundation fund for the development of a large-scale animation industry. In early 2008, the government signed a cooperation contract with CCTV Animation Co Ltd to further build their relationship as strategic partners. This was a major factor in the ability of Chenghai to become the appointed production base for various toy characters created by CCTV Animation.

Undoubtedly, Chenghai's toys and gifts industry has stolen the limelight in a severely competitive market. In future, Chenghai will continue to focus on the aims of "building an international toys and gifts city" and "establishing a regional brand-name toys empire".

Furthermore, the industry is eager to expand and enhance its brand-name reputation as "the major toys and gifts city on the mainland" and by continuing to be "the most aggressive region for technological advancement".

In conclusion, technological advancement, brand-name innovation and rich capital resources have helped upgrade the industry's competitiveness for a healthier, faster development. There is no doubt that Chenghai will claim its place as a renowned, quality and safe production base for toys sold on the mainland and worldwide.