Baby strollers: Positive outlook amid challenges

China's strollers and travel systems industry is showing a marked increase in expenditure as growth indicators fuel optimism over faster global economic recovery.

The recent financial downturn and the consequent credit limitations imposed by banks and other lending institutions forced many companies to implement cost-cutting measures to keep cash reserves intact. Some went as far as closing plants.

Manufacturers, however, are getting more bullish with projections as so-called reen shoots?in the US economy surface. Their willingness to allocate more funds for product development, QC and marketing are hinged on continuous positive growth indicators such as higher business and consumer confidence, and lowered interest rates.

Companies are also benefiting from tax rebates that have risen to 15 percent this June from last year 13 percent. The yuan stability and its effect on keeping material costs level have made exporters optimistic about the future.

Makers are updating product lines in anticipation of stronger demand. A growing number of suppliers are spending more than 5 percent of annual revenue on R&D. They have become more aggressive on the design front and in researching prospective markets.

Smartland International Ltd, one of the interviewees for this report, is based in Taiwan and operates factories in mainland China. It has developed a four-wheeled standard stroller specifically for South America.

Another company, Yellow River Enterprise Development Ltd, is focusing on travel systems this year.

Manufacturers are also moving upmarket under this endeavor. Smartland is exporting high-end three-wheel joggers to Russia, recognizing the growth potential there amid the country's rising economy.

Marketing expenses has also risen as makers sign up for exhibitions, and advertise in trade magazines and websites.

More companies are opting to conduct QC procedures in-house to ensure that products conform to the standards of their intended market.

Further, under efforts to bolster fragile buyer confidence, makers want to show existing and potential clients their financial capability.

Suppliers have purchased QC equipment such as stroller dynamic durability and wheel performance testing machines, and stroller drop testers. These simulate motion, road conditions and impact. More inspectors are also being hired.

Apart from performing in-house inspections, makers also send finished products to accredited testing facilities. Doing so helps ensure that models meet the different requirements of key export markets.

These include the US?ASTM F833, the UK BS 7409, the EU EN 1888, Australia and New Zealand AS/NZS 2088, and Canada SOR/85-379.

While most companies do spend on QC equipment upgrades and third-party examinations, some are also being practical about expenditure and other business strategies.

Standards compliance is difficult due to the different stipulations across export destinations.

As such, many suppliers concentrate on certain markets with less stringent requirements, including South America, the Middle East and Russia.

Those that continue to target traditional markets focus on only one or two that have similar requirements. The strategy not only makes it easier for companies to comply with the standards but also helps them improve product quality.

China-made high-end strollers with a steel assembly and nylon or canvas canopies and bodies are lightweight and more durable. Meanwhile, upscale travel systems have extra car seats and carry cots. Production of these models has increased, driven by strong demand for designs with solid price-to-performance ratio.

Midrange models have aluminum frames and handles, and reclining cotton bodies. The line between high-end and midrange versions, however, is starting to blur as many features usually found in the upper segment are making their way into the more affordable designs.

Multiple position and reclining seats, one-hand folding structures, shock suspension, and angle-adjustable push-and-pull handles are now found in midrange releases.

Models also have double safety locks, 5-point safety harnesses, a rain cover and canopy, and additional diaper bags. Products are equipped with air-pumped wheels for better traction.

Makers are also including large three-wheeled joggers and multifunction travel systems to their lines as a way of expansion. New joggers featuring 7 to 16in air-pumped wheels teach children to progress from walking to running. Strollers that can fit more than one child are also becoming popular.

Releases for the low end come in simpler constructions compared with upscale models. The accessories are also very few. Models in this category have spray-painted steel frames and EVA wheels. The body can be made of T/C or cotton.

This article "Baby strollers: Positive outlook amid challenges" is originally posted in Global Sources.

Long Faith Industrial Co., Ltd.
Smartland International Ltd
Xiamen Gen Import And Export Trading Co.,Ltd