China's importance as a toy market grows

0 Comment(s)Print E-mail Shanghai Daily, June 9, 2014
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NO sooner does the latest movie in the series "Transformers" show up in China than toys related to that show are available on the shelves of local Toys "R" Us stores.

Mark Murphy [Shanghai Daily]

In fact, the China market has become so important to toy makers that sometimes movie-related toys show up in the shops even before the movie. That was the case when "Transformers 4: Age of Extinction" toys appeared on the shelves here last month, concurrently with market overseas. But no date has been set for the film's release in China.

Manufacturers are now more willing to meet the needs of the China market, and the toy industry seems to be one that can weather a slower economic growth, said Mark Murphy, managing director of Toys "R" Us China.

The US-based company operates 58 stores in China and has its headquarters in Shanghai.

Murphy sat down with Shanghai Daily to talk about changes in the toy market and the company's business plan in China.

Q: Have you felt the impact of the Chinese economic slowdown in recent years?

A: You read a lot about China's economy slowing down. Our business is much better than what we hear about. We think that because of the importance Chinese parents place on children, demand is high for safe, quality toys. So our business is growing.

Q: What trends have you observed for toys in China?

A: Traditional toys, such as action figures for boys, dolls for girls, and seasonal products, are all growing very well. Learning toys are especially important in China. We sell a bigger percentage of educational toys in China than in other countries. If parents can buy a toy that also helps the child learn, they really like that. But we do see a slowdown in the "family fun" category, including board games, as more apps and more electronic (games) became available. Games are moving online. It is the only area where we see a decline.

Q: It's uncommon for a high-profile toy to be introduced in China at the same time as the rest of the world. Why are toys usually delayed in China?

A: The synchronized launch of "Transformers" toys is significant because it's the first time it has been done. A launch in China is usually delayed because it takes a long time to take a new toy through a testing standard called CCC. That can cause delays of 60 to 90 days. As the China market grows, manufacturers are speeding up when toys arrive in China. This time we worked with manufacturers to produce the China goods first, so we have time to take it through testing. As China becomes a bigger toy market, manufacturers are trying much harder to make toys available at the same time that they are available in the rest of the world.

Q: Could you describe your performance in China and what's your plan for the future?

A: Our brick-and-mortar stores are expanding quickly in China, showing double-digit sales growth in recent years. Growth rates in our existing stores are very significant. I think China is the fastest-growing market in terms of percentage, though in terms of revenue, it is still fairly small to us. We opened 23 stores in China last year and so now have 58 stores. By the end of this year, we project to have 75, and our goal is to have over 100 stores in China by the end of 2015. For online stores we have an outlet on and we also have our official website The brick-and-mortar stores are our main business, and the online business complements what we are doing in the stores. We also market actively in social media such as WeChat and Weibo.

Q: How do you meet the competition of e-commerce?

A: Our stores have always been very interactive. Toy shopping is still very much a family experience. Normally it involves children, parents and, in many cases, also the grandparents. We have areas in stores where children can play and can touch and feel the actual toys.

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