Source: Yiwu sourcing agent Author: Date: 2008-12-21
The influence of world economic crisis on wholesalers engaged in foreign trade in Yiwu market gradually appears. However,enterprises in toy industry—one of the backbones of Yiwu—speed up the launch of new products to motivate purchasing. Some of them are even preparing for new products of next year now.
Sticking to innovation,
creating opportunities
Yang,boss of Emma Toys Co.,Ltd in Section C of the International Trade Mart who has been dealing with stuffed toys for more than 10 years,said that there is a dramatic decrease of order from foreign purchasers recently as world economic crisis influences the wholesale of daily-used commodities. Most buyers are domestic dealers who only buy a small quantity of goods. Considering the keen competition in Yiwu market,wholesalers must launch new products continuously and stick to innovation to attract purchasers.
World economic crisis is a real challenge for enterprises. Two buyers from Jinhua were placing an order for a new cow-shaped toy with Yang in her booth on December 8. Yang believes that innovation is especially important in the situation of economic crisis and she considers it essential for the survival and development of her enterprises. In her booth,newly-developed colorful stuffed toys of various shapes catch customers’ eyes. Stuffed toys such as white cows,red lucky bulls and fortune ox fill in the shelves in her booth. “Although the year of Ox hasn’t come,the ox-shaped plush toys are popular,” said Yang,“and we have developed twenty to thirty different styles.”
What Yang does implies that under the condition of world economic crisis,those who stick to innovation will have more opportunities. At present,competition among enterprises pushes Yiwu toy industry into the age of “the fittest survives”. Suffering from the economic crisis since U.S. subprime mortgage crisis,some toys enterprises realize that copy is not the right way to sustainable development. Now,they are making their great efforts to develop new products with high added value.
Toy industry：domestic
and foreign trades coexist
Influenced by the global financial crisis,many local toy enterprises have to turn their directions from foreign trade to domestic one. However,the greatest difference is that the latter requires higher innovation. One insider says that any product is sellable in the international market,but it is not the case in the national market,because it requires faster speed to produce new and fashionable commodities. If the products are out-of-date,the value will decrease rapidly. In Yiwu,small and medium-sized toy enterprises are in the overwhelming majority,so how do they make the adjustment？It will take time to build brands and distribution channels which are the key points for domestic market. At present,international brands like Disney and Barbie are dominant while domestic brands are few in the national market.
Manufacturing industry：
extend to the two ends
of the “Smiling Curve”
There is some experience for manufacturing enterprises to learn from the practice of toy industry. Recently,some toy companies strengthen the cooperation with other enterprises and transfer the labor-intensive process to some factories; therefore,they can focus on the development and marketing of new products. This is the route firms will take to upgrade,which is called “Smiling Curve”.It includes innovations,building of sale channels,quality improvement,branding,and transferring the process to other manufacturers.
According to the theory of Smiling Curve,only the two-end enterprises have high added value in the industry chain. Manufacturing is at the lowest point of this curve,which refers to the traditional manufacturing including processing,assembling and making and has the lowest added value. The two ends refer to the development,purchase of material and design as the front end,and brand marketing with various services as the hind end. It is essential for Yiwu companies to take up the places of the two ends during the course of industry upgrading and transformation.
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