For China, 1985 will be the Year of the Toy.
At least that's the hope of the People's Republic of China as it prepares to exhibit hundreds of Chinese-made toys sold under Chinese brand names for the first time at next week's annual American International Toy Fair in New York City.
"This is a major export venture," said Derek Chu of GL Trading Co., a New York company that promotes trade between China and the United States. GL Trading is involved in the venture. "We expect toy sales at the fair to be between $20 million and $25 million." The Chinese estimate annual sales will climb to $100 million, Chu added.
For years, Chinese companies have manufactured toys or parts of toys for American companies. Some of the popular Cabbage Patch Kids products sold by Coleco Industries Inc. are examples of toys produced in China.
Now, Chinese firms, under the auspices of the Chinese government, want to break into the $9 billion American toy market by selling toys under their own brand names.
"For the Chinese, this is a gigantic step," said Vivian Shapiro of GL Trading. "It's the first time they will be marketing toys under their own name."
Shapiro said the toy effort kicks off a Chinese export campaign that may next be focused on leather items.
Some American toy makers who will be at the toy fair, however, are skeptical of China's new toy effort.
"I would be very surprised if their expertise could produce a market which could meet the mass marketing tastes of the American public," said Douglas Thomson of the American Toy Manufacturers Inc., which is sponsoring the show. "It takes far more than presenting a product to penetrate the American market. A company needs successful promotion and advertising along with a reliable track record."
The Chinese trade delegation, however, eagerly trying to enhance its toy industry, is determined to penetrate the vast U.S. market. Representatives from eight Chinese provinces, led by Zhao Zhen Fa of the China National Light Industrial Products Import and Export Corp., are planning to make a strong pitch next week for the toys that are indiginous to their particular regions.
China's Zhejing and Heilongjing regions produce wooden toys. The Jingsu area produces soft, flannel toys, such as hand puppets. Peking produces wooden and metallic products, including children's cars. Hubei and Tianjin are famous for their stuffed dolls and children's cars, Chu said, adding that China also is known for its exquisite hand-made dragon kites.
Up to now, China, like Korea and Taiwan, has been considered a "contract country" that can manufacture toys with lower labor costs than U.S. toy makers. But China's toys have been sold under other countries' brand names since 1954. Some U.S. toy manufacturers doubt whether China can successfully break out of that mold.
"China, whose role is best as a contract country, is probably not a source of original toys that will be imported into this country," said Thomson of the toy manufacturers trade group. "The U.S. dominates the design and marketing techniques of toys."
The success of the popular robot toys that can be transformed into cars and trucks, which were first marketed by the Japanese, is a good example of unsuccessful marketing techniques from the Far East, toy makers said.
The toys were first made by Takara Co. and Bandai Co. Ltd., both leading Japanese toy makers. Bandai introduced the toys -- then called Machine Men -- here in 1983, but they languished on the shelves for a year before Tonka bought the marketing rights and renamed the toys GoBots.
The rest is history. Hasbro followed close behind with its highly successful Transformer. GoBots and Transformers, armed with massive American promotional and advertising campaigns, invaded the U.S. toy market. Movable robot sales last year soared to $222 million, according to the Toy Manufacturers of America Inc.
"The Japanese weren't successful because they were unfamiliar with the U.S. market," Raymond E. McDonald, Tonka's director of marketing, has said. "They weren't prepared to support the introduction of the line in the same way as Tonka. And they failed to develop a story line."
But, David S. Leibowitz of American Securities Corp. said that there is nothing barring the Chinese from success in the highly competitive U.S. toy market, providing they meet certain criteria.
"Their success will depend on the creativity of the design, the pricing and quality of their product, the categories they're going after and their ability to deliver," Leibowitz said.
China's toy effort is not just an export effort, GL Trading spokesmen said, but is part of a larger effort by the country to establish a reciprocal trading relationship with the United States. "They're hungry for 20th century technology," said GL Trading's Shapiro. "They're not only eager to expand their toy export market, but they also can provide a huge market for U.S. exports. They want to import everything from ice-cream makers to knife sharpeners."