The final portion of this three-part series tackles the industry challenges affecting the toy hub.
Plaything manufacturers in Shantou, Guangdong province are facing the possibility of fewer overseas orders and lower revenue in coming months. This comes amid decreased demand, higher safety-compliance fees and the yuan’s appreciation.
As economic woes plague major markets such as the EU and the US, the hub’s toy exports in the first three quarters of 2011 dropped about 7 percent compared with the same period in 2010. To boost sales, many suppliers are looking at alternative destinations such as the Middle East, Africa, Australia and Peru.
Businesses are also pressured by the recently implemented 2009/48/EC, which is considered the strictest standard yet. Conformance will require increasing product tests, and upgrading material sourcing methods and factory facilities. These are forecast to raise manufacturing costs by 5 to 20 percent.
Meanwhile, the unstable US dollar-yuan exchange rate is making it difficult to finalize prices. To avoid losses from sudden changes in monetary value, companies retain quotes for just one month or factor in possible fluctuation.
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Note: This article "Shantou toy makers tap new markets, adjust prices" was originally
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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