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Playing For Fun And Profit(HKTDC Enterprise, Vol 04,2007)

Playing For Fun And Profit



The focus was firmly on play value rather that "look at me" hi-tech capabilities, according to visitors at the recent American International Toy Fair 2007.

Traditional play, from board games to other non-electronic toys, was very much on display at the show, which ran from February 11-14 and attracted more than 1,200 exhibitors and in excess of 13,000 buyers to New York's Jacob K. Javits Convention Center.

Many playthings were aimed at getting kids off the couch and into a variety of physical activities, with ride-on toys and activity mats just some of the ways toy makers are fighting the "obesity wars".

Education was another major product area, with toys ranging from learning to read to sophisticated science kits aimed at older children and teenagers.

Seamless use of technology to enhance play value and enjoyment was evident throughout the show, with several companies offering children's laptops with safe, controlled Internet access allowing kids to reach only permitted, child-safe sites.

There was also attention to making things easier for parents, with materials that don't create a mess at home and toys designed for easy portability when travelling.

Given this wealth of choice, it's not surprising that information company the NPD Group reported that US retail toy sales were up 0.3% to US$33.3bn for 2006.

Average retail prices increased 5% over 2005 as mass merchant/discount channels showed continued growth, accounting for 55% of total sales, while toy stores were the second-largest channel at 18% and online toy sales rose 12% over the previous year.

Much of this healthy showing could be attributed to suppliers from Hong Kong and the Chinese mainland looking more closely at the costs and turnaround times for toy consignments.

Ever-nimble, these suppliers are adapting Full Container Load (FCL) and Less than Container Load (LCL) to shipping and sales targets, with a growing number of players seeking to balance business across mass and specialty channels.

Hong Kong's Silverlit, for example, set up specialty, hobby, "dotcom" and "mom-and-pop" distribution in the US to go with its mass market/big box channel.

"You can't have the volume you need with specialty stores alone," observed Silverlit US president Cathy Shull. "You have to supply the mass market."

Focusing on the big chains, exhibitors at the Hong Kong Trade Development Council pavilion were also looking for US distributors - as well as seeking to develop networks of smaller retailers.

Wuston, for example, works with different factories to deliver its orders of holiday and seasonal decorations such as artificial flowers (US$1-20 retail) for overseas customers.

"Our job is to put together the American customer with the Chinese factories," said president Kent Wo, explaining that this calls for combining small orders from US customers into an order big enough to be profitable for the factory.

But, regardless of the shipping quantity or method, the focus at any toy fair is firmly on the product and Hong Kong and mainland companies definitely had the goods buyers wanted.

Timber Ocean keyed in on the remote control action with new trucks, including the Kenworth and Big Head models that cost US$23 FOB Hong Kong or US$55-60 retail and feature full-function remotes, LED lights, horn, and speeds over 10 km/hr.

Ontex Int'l addressed international travel and language buyers with its Lingua Genie (US$60 retail), which uses cards and a reader to translate key phrases to and from English, Japanese, Korean and Chinese.

Ontex plans on selling it through wholesalers into specialty channels, particularly bookstores and language schools, so wholesale orders can be as little as 100 units. "Orders have to be available in smaller batches," said marketing director Benny Kwong.

Eastcolight rode the learning curve and added science projects in seven categories (US$4.90 retail), including chemistry and mechanics, to its science education lines.

Silver Dragon targets three-year-olds and older with its arts and crafts and modelling clay lines (US$5-20 retail), with smaller items like pens and markers selling for US$1 or US$2. "They're aimed at educational and back-to-school markets," explained sales manager Alain-Jean Etienne.

Preschool and education were the focus for Benjamin Toys, which featured an AM/FM radio kit as well as a range of scientific and remote-control toys and was primarily at the fair to explore US distribution opportunities.

Soft vinyl toys and sports goods from Yip's (Harbour) are aimed at safe play, while Out of the Blue - whose categories include toys and games, giftware and costume jewellery - drew interest with its wooden toys.

Now active in Europe, Out of the Blue was looking for an importer or distributor in the US and looking to plan for next year, with an interest in reaching smaller stores.

Fellow wooden toy manufacturer Interglobal was also drawing plenty of buyer interest with wooden toys and games that sell into OEM and other channels.

South China Development displayed its playing cards, which can be customised as promotional items in addition to sales on retail shelves, as well as its packaging and boxing lines.

East Asia Ornament sells its Christmas, Easter and seasonal decorations to big box retailers and through distribution to smaller customers, said manager Anthony Choi.

Advanced General Group introduced plush toys with integrated MP3 players (US$30-70 retail, depending on download format and other features).

The newest upgrades include radio control through touch points on the feet. "It will appeal to everybody - young children to teens and adults," said managing director Khan Arshad.

Kids aged 3-5 will love the scooters, ride-on motorcycles, pogo sticks, and skate boards (US$29-69 retail) from Nicer Holdings that encourage the physical activity now considered so important in the face of concerns about overweight children.

Fisher-Price of the US addressed the obesity and health issue directly, introducing its new Smart Cycle (approximately US$99.90 retail), which combines learning and physical play with an appearance by an American fitness expert.

The Smart Cycle, which plugs into the TV and allows kids to play learning games by cycling and steering, complements Fisher-Price's TMX Elmo, which won both Toy of the Year and Infant/Pre-school Toy of the Year awards.

Not to be outdone, Hong Kong's VTech had its new Whiz Kid Learning System (US$99.90 retail), bringing interactive reading and learning to kids in the 3-6 age group with 40 activity pages offering more than 120 activities.

The company also showed updates for its V.Smile Baby Infant Development System and other lines, while mini-laptops retailing from US$29.90-129.90 offered overlapping features for kids in the 4-10-year age range, letting parents make the buying and cost decision.

Also new from VTech is Gadget (US$99.90 retail), which marks the company's entry into the "tweens" market with a multimedia format that combines a digital camera, MP3 player, FM radio, games and voice and text messaging in a single hand-held device.

Gadget is VTech's first venture outside the learning sector and reflects marketing data that show electronics as a major focus in toys, said VTech vice president of marketing Julia Fitzgerald. "It makes all the sense in the world that we should move into youth electronics and outside the learning aisle."

Silverlit's Palm Z infrared indoor miniature plane (US$39.90 retail) has strong appeal in all channels. "It appeals to bigger boys as well as little ones," Silverlit's Shull said.

The company also has a new DIY series for eight-year-olds and up. The child gets the plane parts in a box, with models available from easy to advanced levels. A Ferrari Enzo (retailing at US$49.90 for the car alone; US$119 in a metal carry case) was also a focus this year.

Also new from Hasbro, Baby Alive now has anatomically-correct boy and girl babies (US$29.90 retail) which "drink" water and then need their diapers changed.

Hasbro will be keying in on the summer release of the live-action Transformers feature film along with Spiderman 3, showing action toys aimed at boys.

Wild Planet had seven new introductions in its Spy Gear line, including the Intruder Trap System of wireless alarms (US$29.90-44.90 retail) and the Agent Action Briefcase (US$19.90-29.90 retail). "We give the kids the tools to create their own scenarios," said media relations coordinator, Robin Russell.

Meanwhile, Mattel has taken Barbie electronic with introductions that include the Barbie Tune Blossom personal CD player (US$34.90 retail) and a selection of other electronics up to the Bloom Tube, a 13-inch TV (US$139.90 retail).

Mattel also introduced Polly Pocket Polly Wheels, the first die-cast vehicles from the company for girls, which, like its Planet Heroes Figure Assortment, are aimed at encouraging all-important unstructured play.

MorScience kits and DIY activities, such as sets for making power screwdrivers (generally US$2.90-16.90 retail), are the focus of Maxitronic's lines aimed from pre-schoolers to teens and distributed via mail order, chain stores, and other retailers as well as schools.

The focus of the show's Techno Source, however, was Rubik's Revolution (US$19.90 retail), an interactive electronic version of Rubik's Cube with built-in games that feature light, sound, and voice effects. It will ship in summer 2007 to small retailers via distribution as well as through mass-market channels.

Plaja International, headquartered in the US and with a Chinese mainland manufacturing centre, introduced a new concept in plush with its Plajapets (US$19-22 retail), patented both in the US and China.

They're designed to provide extensive replay value by allowing children (and older people) to interchange detachable heads and tails to create new pets.

There was certainly something for everyone at the American International Toy Fair, with Hong Kong and Chinese mainland manufacturers leading the fun.