by Fredrik Grönkvist
Largely concentrated in Guangdong province, and Shantou city in particular, China’s toy industry is the worlds largest. Startups and Multinationals alike, are importing toys directly from Chinese manufacturers. In this Product Guide, we explain what importers must know about Toy Safety Regulations, Labelling Requirements and Testing Requirements. In addition, we also explain why compliance with overseas standards and directives cannot be taken for granted, when sourcing manufacturers in China, and other Asian countries.
For obvious reasons, specific safety standards and substance restrictions apply to toys, and other children’s products, in most developed markets. The scope of products fitting inside the definition of a toy, or a children’s product, is wide. That said, most applicable directives and standards can be grouped in at least one of the following categories:
Toy Safety Regulations are often regulated by frameworks or directives, such as CPSIA in the United States and the Toy Safety Directive (EN 71) in the European Union. However, these regulations often refer to ASTM and ISO standards, of which the importer is required to ensure compliance. As such, an assessment, both on applicable standards, and a supplier capability to comply, must be made before mass production begins. Don’t rely on the supplier to make such an assessment, as it’s always the importer that is ultimately responsible for ensuring compliance.
In addition, and often as a complement, to product and substance regulations, importers must ensure compliance with all applicable labelling requirements. Labelling requirements may either be part of of specific Toys and Children’s Product Standards, or part of other regulations, applicable to several product categories. Below follows a brief overview of what may be required, but beware that labelling requirements differ between markets.
As previously mentioned, importers shall never make the assumption that the supplier is already aware of a product must be labelled, according to regulations in a certain market. Instead, the buyer must provide all necessary documentation directly to the supplier, including ready made graphical files. The stakes are high, as improper labelling is illegal, and may result in a forced recall, major fines – or both.
A Certificate or a substance test report is only valid for that one specific SKU, or material sample, submitted to the testing company. Changing a material, for example a button or fabric, may render a product non-compliant. Therefore, the importer must go through the compliance procedure each time a new product is developed – or when a change is made.
In addition, importers may also be required to implement a compliance program, with testing on some, or all batches, even if no design or material changes has been made. Even if that is not explicitly required for your products, in your markets, it’s still highly recommended. Due to the lack of transparency, even between the manufacturer and its subcontractors, it’s impossible to eliminate the risk of a components and material suppliers changing specifications – without making either you, or the manufacturer, aware.
As testing costs are multiplied on the number of different SKUs, materials and components, in addition to batch specific testing, compliance costs increase with variety. For companies struggling with keeping costs down, this can only be achieved by reducing the degree of variety. In practice, this force importers to limit the number of different SKUs, materials, colors and components. Today, this is exactly what, successful, small to medium sized companies do.
Considering that compliance with overseas toy safety regulations is mandatory for accessing the world’s largest markets, it would be rather logic to assume that said compliance can be taken for granted. Yet, I know from experience that such assumptions can quickly result in immense losses, sometimes bankruptcy, as I’ll get back to in a bit.
Ensuring compliance with, for example EN 71 Part 1, 2 and 3, requires the supplier to posses both the necessary technical expertise, and the ability to control its incoming materials, purchased from subcontractors. In China, the latter can be incredibly challenging, as the domestic materials supply chain is all but transparent. In short, far from all suppliers can ensure compliance with European, American and Australian toy safety regulations.
Yet, far too many importers fail to realize this. Back in 2011, I received a call from a wholesaler, based in my native Sweden. This was around the same time that the European Toy Safety Directive (EN 71) was amended, for which reason the importer required updated documentation from his supplier. Quickly, it turned out that the supplier was not only unaware of the new changes, but a closer look also revealed that the previous documentation was not authentic. What made things slightly worse was that the local authorities, for reasons I was not made aware of, had questioned the product certificates held by the importer – and gave them a deadline to amend this. Until that requirement could be fulfilled, the company was not allowed to distribute their goods.
As it turned out that the toys where non-compliant, the authorities ordered a recall, essentially forcing them to buy back the delivered goods from their retailers. That is at least the last thing I know, as their purchasing manager never called me back since. Unfortunately, they didn’t do the groundwork, forcing them to learn this lesson the hard way. As said, previously in this article, it’s always up to the importer to ensure compliance – not the supplier.
Toy safety issues have made the headlines on a frequent basis in the last few years. In 2011, a report from IPEN and Greenpeace claimed that one third of the toys sold in China, contained excessive amounts of lead and other heavy metals. Worth noting, however, is that this study focused on toys made for the domestic market, but toy importers still have all reason to remain wary.
Fredrik Grönkvist is the co-founder of ScandinAsian Enterprise in Shanghai. Since 2010, he and his team have helped hundreds of companies worldwide, primarily in the EU and US, to develop and manufacture products in China. He is also the main contributor on www.chinaimportal.com, a leading knowledge base for small- to medium-sized enterprises importing from Asia. For further questions, you can contact him on www.chinaimportal.com/contact-us/.