Why Indian Toy Factories Are Very Audit/Ethically Friendly…

Why Indian Toy Factories Tend To Be Manufacturing Audit/Ethical Working Friendly…

 

The toy industry is fast discovering India as a powerful manufacturing hub. In this first of a series of articles on Indian Toy Manufacturing we look at a practical factor which is encouraging/offers potential for much less bureaucratic hassle for companies looking to manufacture in the sub continent.

Toy manufacturers in India have numerous innate advantages, not least of which is comparatively low labor costs. Perhaps more importantly, one of the most practically important areas where toy manufacturers in India are well set to supply the global toy industry is ethical standards, employment conditions and many of the other factors that go into achieving important audit passes/certifications i.e. ICTI Seal, Walmart’s FCCA program & others.

Indian labor tends to be better protected in terms of legal and regulatory framework than many other Asian toy manufacturing countries. Workers in Chinese factories tend (nowadays) to be from further West, and therefore often need to live on site/at low cost, and when so far away from home may be more inclined/incentivised to work over time which can lead to issues with audits/working hour limitations etc. This doesn’t tend to happen in India (based on what we have discovered/been told), with most manufacturing workers being from within a reasonable distance of the manufacturing plants. Shift times and working conditions are heavily regulated, and so the kind of working practise transgression which may lead to ICTI ‘on probation’ status are less ingrained into the setup/working culture.

We spoke to the company regarded by many as the leading toy factory in India, and they told us that they are tending to exceed ICTI standards because they are legally obliged to do more by their state and national legal framework. In fact they appear to have achieved ICTI & other certifications faster than nearly any other toy factory we have spoken to!

This is one of many factors that leads us to predict exponential growth in Indian toy manufacturing in the next few years…more to come on this topic!

For more information on how to access Indian Toy Manufacturing, please visit our Toy Industry Consultancy company website: http://www.kidsbrandinsight.com/?page_id=332

Toy Manufacturing In Bulgaria: Klimbo Eco Toys Profile

Toy Manufacturing In Bulgaria: Klimbo Eco Toys Profile

We recently caught up with Pancho Panev, CEO and co founder of Klimbo Eco Toys Ltd, a Bulgarian manufacturer of high quality wooden products:

 

  1. Tell us more about your company Klimbo Eco Toys Ltd?

We firmly believe that our world will be a much better place, if children are growing up free in environment, full of beauty and opportunities to create.

This is how we decided to establish a company for design and manufacturing of ecological toys with high educational value. Thus, our first product, Klimbo portable theatre was created with emotion and attention to every detail, and it is distinguished by its enhanced functionality.

  1. What makes Klimbo Portable Theatre so special and unique?

First of all this is an entirely new playing platform, not just a single toy product. Famous tale stories like Red Riding Hood might be presented and narrated accordingly to kids’ individual perception for those stories. The kids also have a chance to create and present in an artistic environment their own stories with their own characters. As we know there are no yet boundaries set for creativity and imagination, and Klimbo Portable Theatre is helping kids to unveil and develop further their potential.

Second, Klimbo Portable Theatre is unique with its lovely design and the integration of all components of a real theater, starting from dimmable LED front and top stage illumination, mechanical music box, rolling curtains, rotating stage, etc. Klimbo Portable Theatre is made also of high quality natural materials.

Last but not least, Klimbo Portable Theatre can be easily assembled/dismantled and comes with very trendy, high quality cardboard packaging box. It has also built-in 3.7v Li-Ion accumulator batteries for the LED illumination.

OLYMPUS DIGITAL CAMERA OLYMPUS DIGITAL CAMERA

  1. Is this product already available on the market?

Assembling facility in Bulgaria is in full operation already, and we are working now on closing our first distribution contracts.

We’ve provided already a couple of samples to several customers, and the feedback is very positive.

But what makes us also confident in the success of the product is a consumer research conducted by reputable marketing agency in Germany, which showed us very high level of acceptance. The product was liked by 63% of the respondents, with 41% positive on buying it.

  1. And what about pricing?

The complexity and the enhanced functionality of this product puts it in the high-end segment of wooden toys. However, our strong intention is Klimbo Portable Theatre to be price competitive when compared to similar products in this segment, and we are continuously working in this direction.

  1. Finally, where we can find Klimbo Portable Theatre?

We intend to start from biggest toy markets around Europe (Germany, UK, France), and then expand further, if all goes well.

Besides with selected distributors/retailers, the product will be very soon available for direct purchase through our online store on www.klimboecotoys.com.

One of the key market segments, we intend to focus on are kindergartens around Europe, as Klimbo Portable Тheatre might be used also as educational and pedagogical tool.

Klimbo Portable Theatre will be also presented at forthcoming Spielwarenmesse in Nuremberg, hence I use this opportunity to invite cordially all interested participants to visit us at our booth   B35 in Hall3.

 

Klimbo Eco Toys

The Not So Secret Success Factor For Tech Driven Toys…

The Not So Secret Success Factor For Tech Driven Toys…

When you look at the top 10 selling toys in nearly every toy market in the world, technology driven toys will usually feature strongly. In fact THE top selling toy is very often a high price point tech toy.

But over time I’ve found that sometimes toy companies can get carried away by a nifty piece of technology, and miss the point – which is to create a compelling toy which a child finds exciting and magical. I’ve worked on dozens of tech products personally, and some of them featured good tech but a crappy experience for the consumer…some of the best experiences were created using basic or even old technology, because a child is not conducting a technical analysis of what’s making the toy work, they are are merely judging a toy by the end result.

The toy industry has proven long term hat it is expert in downspeccing/dumbing down high end tech functionality to hit a viable toy price. And what seems to have happened in the last 5 years or so is that price points have been pushed upwards as new technology creates products with have sufficient to bust traditional pricing paradigms.

We just need to ensure our adaptation of an exciting new toys delivers an exciting play experience, not a cool tech delivering a ho hum play experience!

by Steve Reece, CEO of Kids Brand Insight www.KidsBrandInsight.com,  a leading Consultancy to toy companies around the world, which helps companies with product reviews & awards, find the right toy & game factories, consumer research test their products with kids and parents and secure export distribution/market entry around the world

5 Features Of Highly Successful Toy Companies

5 Features Of Highly Successful Toy Companies

As we head into another toy fair season (once more into the breach…!), we can see that mostly the same old toy companies just keep coming back year after year. And while some companies have fallen by the wayside, there are still those companies that just keep going. The interesting thing about these companies who keep on coming back is that they have several factors in common:

  1. Strong product focus & pipeline – above all the toy industry is a product driven industry. Products that get listed by retailers and sell through to consumers are what this industry is all about. Successful companies with longevity either have very strong product pipelines, or in a very few cases have the sheer luxury of evergreen products that sell year after year.
  2. Strong operational disciplines especially stock & cash flow management – the one thing that will kill toy companies stone dead is loose inventory management, especially when combined with poor cashflow management/financing arrangements. This is a largely seasonal business, so you had better be prepared to manage the sharp end of the cashflow cycle. Moreover, if your cash is over tied up in stock that isn’t selling you need to be ruthless to ensure cash generated helps to fund the next cycle. Most importantly, managing what needs to happen if key product lines fail is critical to ensuring longevity. In the toy business something like 2/3rds of all products are new each year, and many of the huge litany of new product launches fail. The key is to clearout and move on cutting losses and avoiding emotional investment in products which just don’t cut the mustard!
  3. Maximising carry forward product lines and launch success propensity – if we look only at the huge amount of development effort, expense and resource that drives just 1/3 of sales in our industry, it’s easy to miss the other 2/3rds – the silent majority which is where all the profit is at! Carry forward products are proven performers, and often need less marketing expenditure (both trade and consumer) and certainly have less development cost to amortise/cover. Yet these trusty old warriors often get little attention versus the glitz and glamour of new product lines. Companies that thrive over the long term usually have silent behemoths in their product ranges – evergreen products that keep on performing year after year!
  4. Brands, Brands, Brands – brands are a crucial factor for most long term successful toy companies. Either you utilise someone else’s brands via licensing, or you create/build/acquire your own. When toy companies are sold, a major element of value is intellectual property – or brands! New product launches are often more likely to succeed as brand extensions versus completely new IP.
  5. Good people – the toy industry is a relationship/contact network driven industry. It’s not normally faceless business, success usually relies on forming strong relationships with retail, suppliers and other companies. Good people can make all the difference. Companies which employ a short sighted approach and who undervalue/under-compensate or under-acknowledge their people are less likely to succeed, and significantly more likely to fail. Also, in an industry with so many smaller (in global terms) and family owned/operated companies, successful management often depends on filling gaps in capability/temperament of management team i.e. employing staff who are good at all the things the managing team are not so good at!

So there you have it – 5 features of highly successful toy companies…as you walk around toy fair this time round, it might be worth observing those companies who just keep on coming back year after year, and seeing if you/your company can learn anything/observe the above 5 factors in action!

 

by Steve Reece, CEO of Kids Brand Insight www.KidsBrandInsight.com,  a leading Consultancy to toy companies around the world, which helps companies with product reviews & awards, find the right toy & game factories, consumer research test their products with kids and parents and secure export distribution/market entry around the world

Global Toy Industry – 2015 Highlights And Outlook For 2016…

Global Toy Industry – 2015 Highlights And Outlook For 2016…

As the new year begins, and toy company people roll back into the office saturated with turkey and good cheer (!), we can look back on a 2015 that overall was a very successful year for the toy business, and look forward to a successful 2016 for the global toy business.

 

THOUGHTS ON 2016

It’s time to get the crystal ball out! Here are some thoughts/predictions for 2016:

  1. Accelerated growth of manufacturing outside China – the following article we wrote for the leading UK toy trade magazine – Toy News – looks at the trend/necessity to be considering toy manufacturing outside of China. http://www.toynews-online.biz/opinion/read/manufacturing-movements/045473  In particular, we expect significant growth in India, where we’re seeing strong toy suppliers emerge. We’ve recently visited factories there offering cutting edge engineering and potential cost savings due to lower labor costs, and as India is the only Asian country with a similar sized population to China, with a significant manufacturing capability in other sectors, we expect to see India come more and more to the fore from 2016 onwards.
  2. Mattel Bounces Back – it’s been a rough ride for Mattel in recent times. The major issue was the impact of Frozen toy/doll sales on their own Barbie brand and the loss of Disney Princess fashion dolls to Hasbro. There was too little time to do anything significant for 2015, but for 2016 we’re expecting to see a powerfully ramped up product line at toy fair!
  3. Movies, movies, movies – again we’re set for a strong movie slate in 2016. In particular we’re intrigued to see how Batman versus Superman goes, but also there are new instalments for Captain America, X-Men, TMNT, The BFG, Finding Dory (the sequel to Finding Nemo which grossed nearly $1billion at the global box office originally) plus a Star Wars spin off movie.
  4. Star Wars drives strong Q1 2016 for Global toy industry – on the subject of Star Wars, December movie releases are usually unpopular with toy companies, as the 4-6 week toys on shelf date pre-release does not allow for sufficient time to maximise toy sell through…furthermore a December movie release most likely means a late Q1/early Q2 DVD release versus having both a movie in the summer with a boost via DVD release in Q4. HOWEVER…if there was one franchise with the potential to rewrite the rules, it’s Star Wars, and what you do get with a December release on a huge smash hit kid/family friendly blockbuster is a comparatively huge Q1 as the hype continues into what is usually a proportionally dead time for retail sell through.
  5. The Year Of Acquisitions – the toy industry is dominated by family run/family founded businesses, and sometimes for whatever reason the family decides to sell up and move on. If you look at the growth curves of both Hasbro & Mattel, they have been significantly influenced by acquisitions of brands/companies, but there are also other growth hungry companies with fairly large cheque books out there, we’re expecting to see several fairly large company sales as negotiations instigated around toy fair season grind through to completion in the summer.

Here’s a selection of popular articles from 2015 to reflect on:

The Top 10 Most Read Articles on Spielwarenmesse for 2015 (5 of which were written by Steve Reece our CEO): http://www.spielwarenmesse.de/magazine/article-detail/das-sind-die-top-10-artikel-im-spielwarenmagazin-2015/?L=1&cHash=9f16315323c52a6171aa94c71f3d860b

Global Toy Market Enjoys ‘Healthy’ Growth in 2015:

http://www.toyindustryjournal.com/?p=188

 

The European Toy Market, Large But Fragmented:

http://www.toyindustryjournal.com/?paged=4 

 

Where All The Profit’s At In The Toy Business:

Where All The Profit’s At In The Toy Industry

Finally, the following article was published in 2015, but may be useful for Toy Fair 2016 (although it’s a bit late now!)

5 Tips For Successful Toy Fair Events Management

 

Regardless of whether we call it right, we wish you a very successful 2016…

…and if you need some support/help, please consider our Consultancy business: Kids Brand Insight offers the following services:

  • Toy Business Consultancy
  • Consumer Insight/Playtesting
  • Toy Reviews & Awards (via www.TheToyVerdict.com)
  • Export Sales Consultancy
  • Factory Finding (in China, India and beyond)
  • Events Management

For more information, please visit: www.KidsBrandInsight.com

 

Star Wars & The Toy Biz – The Force Awakens Verdict

STAR WARS & THE TOY BIZ – THE FORCE AWAKENS VERDICT

In this 2nd article looking at Star Wars & the toy business we deliver our verdict on The Force Awakens, and what it means for the toy business.

At the time of writing, The Force Awakens is smashing box office records left, right and centre. Which isn’t particularly surprising when you think of how much this film has been anticipated/hyped.

The first point for us to make is – WOW The Force Awakens really delivers as a movie. It delivers in terms of a one off movie experience, it delivers in terms of authenticity versus the original trilogy and it delivers in terms of setting the scene for the raft of Star Wars movies to come (both sequels to The Force Awakens and spin offs).

As a childhood super fan of Star Wars I can say from a personal perspective that I am very deeply satisfied with The Force Awakens, and as I have told everyone who has had the misfortune to speak to me since viewing it, I believe again! I’m not the only person of my generation who found the second trilogy (in terms of release date) to be hugely disappointing. Well that’s all ancient history now, because now I believe again!

Such personal ramblings aside, from the perspective of the toy industry which has so much to gain from a successful reintroduction of Star Wars movies, The Force Awakens bodes well for the toy industry. In fact I would go so far as to say that the toy industry is going to be reaping the rewards of JJ Abrams fantastic film for some years to come!

I’m not entirely convinced by the plan for spin offs, as that kind of thing can look better on paper than reality, my suspicion is that spin offs like the feted Boba Fett spin off and for that matter Harry Potter spin off movies are risky. Nevertheless though, we’re heading into what looks like at least 5 years of ongoing Star Wars mania, which is huge news for the toy business.

I’m expecting Hasbro to do fantastically well out of both this movie and subsequent ones as the master toy licensee for the franchise, but there are numerous other companies set for a bonanza based on the massive media footprint/impressions created by The Force Awakens. And obviously the ultimate beneficiary is the Disney corporation, because this massively compelling iteration of THE toyetic movie brand must have increased the intellectual property value of the Star Wars franchise way beyond what they paid for it, and when they tot up all the royalty payments heading their way in the near future I imagine the bean counters at ‘Mouse’ headquarters will be mightily happy!

In terms of how The Force Awakens works for toys, aside from the old classic toyetic features like space ships, X-wings, hand held weapons and all the rest, we also have a few new heroes to add into the mix. BB8, the small droid that looks kind of like a rolling football/soccer ball stole the show in terms of being cutesy, funny and plucky. While I’m sure it has challenged some toy designers as it can’t be easy turning that into a working toy, in the end it represents a fantastic new icon for the franchise, while C3PO & R2D2 still had their part to play.

The new ‘baddy’ character – Kylo Ren – has a face mask as did predecessor Darth Vader, as well as a visually striking cross shaped light sabre.  Ren looks set to star in future movies, so expect the crucifix shaped light saber to be back/on toy shelves for some years to come!

Aesthetically, because The Force Awakens relies less on CGI than many sci-fi movies seem to do nowadays, there is more of a real/grainy feel to the backgrounds and sets featured, and more detail to be replicated within the toy world.

The bottom line is that Star Wars as the original toyetic movie is now set to wow another generation…when kids are seeing a Star Wars movie for the first time, you know it’s hooked them when they start saying ‘May the force be with you’ instead of goodbye!

by Steve Reece, CEO of Kids Brand Insight www.KidsBrandInsight.com,  a leading Consultancy to toy, game and kids entertainment companies around the world, which helps companies find the right toy & game factories, consumer research test their products with kids and parents and secure export distribution/market entry around the world

Star Wars & The Toy Biz – Analysis Pre Viewing

Star Wars & The Toy Biz – Analysis Pre Viewing

I’m writing this 24 hours before I take a bunch of kids and ‘kiddults’ to see the new Star Wars movie – The Force Awakens. All the kids attending have seen one or more of the previous movies, and all of the adults have a). seen all of the movies b). are fans/avid fans.

We’re looking to test how impactful the new movie is in terms of driving brand engagement in Star Wars for the next generation. (We’re doing this for our own industry understanding, it’s not an official project from Disney/Lucas to be clear!).

When I think back to my generation and the unprecedented levels of both brand engagement and resulting toy/merchandise sales, I struggle to see how this new incarnation can possibly have the same effect in an ever overloaded blockbuster movie environment.

But key factors I’m looking for are new aspirational characters full of personality and action/skills. Cool weaponry, amazing vehicles/space craft and a fantastic blend of good against evil.

While I’ve tried to avoid much of the commentary/spoilers so far, I’m loving the droid featured heavily in official trailers out there (BB8), and interested to see how the new generation of actors work out.

Critically from a corporate strategy perspective, I’m keenly interested to see how the movie sets up/if the movie sets up the raft of spin off movies which are due to hit the screens in coming years.

Watch this space – verdict to follow next week…!

 

 

 

by Steve Reece, CEO of Kids Brand Insight www.KidsBrandInsight.com,  a leading Consultancy to toy, game and kids entertainment companies around the world, which helps companies find the right toy & game factories, consumer research test their products with kids and parents and secure export distribution/market entry around the world

Bloomberg’s Article On How Disney Princess Toy Rights Won By Hasbro…

Bloomberg’s Article On How Disney Princess Toy Rights Won By Hasbro…

Industry insiders are often underwhelmed when business media look to convey what actually happens in the toy business. ‘Rolls eyes’ is often the reaction of those in the know behind the scenes.

However, every so often someone really cracks it and writes an in depth analysis piece featuring meaningful interviews with the players involved and with analysis/insight which unveils what actually happened.

One such article doing the rounds right now is Bloomberg’s article on how Disney decided to award lucrative rights to Disney Princess fashion dolls to Hasbro at the expense of previous incumbent Mattel.

In case you haven’t read the article, you can read it here:

http://www.bloomberg.com/features/2015-disney-princess-hasbro/ 

One of the most compelling features of this article is the candid nature of the interview feedback from many of the key players in what was one of the biggest coups of recent times in the licensed toy business. Key Hasbro people are very candid about what happened, how they went about impressing Disney and how they plan to take the franchise forward. Key Mattel people interviewed are also surprisingly candid in a world of smart/often meaningless PR soundbites, Mattel communicate in this article exactly why they think they lost the rights.

Well done Bloomberg!

Why Board Games Are More Relevant Than Ever…

Why Board Games Are More Relevant Than Ever…

 

As we move further into the texhnology obsessed 21st Century I still get asked “But are board games still relevant in this day and age? My kids spend all their time on tablets.” When I first started working with board games back in the late ’90’s I was asked the same question, except with TV and game consoles in place of tablets.

Despite people asking that question for at least a decade and a half, and despite many bumps in the road the board games industry is still worth $billions globally. The reality is that board games don’t play a central role in most people’s day to day activities. However, most people will enjoy (good) board games when they actually do play them.

Perhaps more importantly, board games remain a fantastic social interaction driver for families and adults, and a very strong developmental aid for kids. Moreover, quality parent-child time can be a lot of fun with a good game.

So the need and the benefits for board games are still there. It’s a bit like eating fruit and vegetables, we know we should do it because it is good for us, but we’re often waylaid by less healthy foods and less healthy habits! In an ever more gadget focused world, sitting round a table to play a game is not just a very occasional pastime we can occasionally engage in with a somewhat rose tinted nostalgic “I used to play this when I was a kid”, in fact it’s a platform for reconnecting with those around us, same as it always has been, but now our need for actual face to face connection has never been stronger!

What I’m really loving of late is the hugely positive impact of crowd funding platforms like Kickstarter which have massively freshened up product development pipelines in the board games industry. No longer do we just get what doesn’t get filtered out as too whacky or too risky! At last we can launch/play with nearly any game we the consumers may want, not just what retailers are willing to put on their shelves. And if a game is very niche, or utterly crazy, so what, there’s bound to be another 500-1000 people who might want that, and that’s enough for a manufacturing run.

If we look at Cards Against Humanity & Exploding Kittens for instance which have been hugely successful new product launches in recent times, neither of these would have stood a chance if pitched in the traditional way to retailers…there is just no way a mass market retailer would want to take the risk on risqué! By allowing game creators to go directly to consumers we at long last have a consumer driven model developing (yes, we’re still in the infancy of this trend, so it is still developing). Instead of only having the innovation killing retail listing driven approach of the past, we now get consumers voting with their hard earned cash as to what they want to play.

And the best thing of all is that because Games are hugely driven by word of mouth/played at a friends house, good games (even if not necessarily what you would see on shelf at your nearest mass market retailer) grow in a viral fashion.

Are board games still relevant? Hell yes!

 

by Steve Reece, CEO of Kids Brand Insight www.KidsBrandInsight.com,  a leading Consultancy to toy, game and kids entertainment companies around the world, which helps companies find the right toy & game factories, consumer research test their products with kids and parents and secure export distribution/market entry around the world

 

Global Toy Market Enjoys Healthy Growth In 2015?

Global Toy Market Enjoys Healthy Growth In 2015?

This week it was reported that the Global toy market grew by 7% in 2015 (Jan-Sept) versus the previous year for that time period. For the full data/press release from NPD just click here. Now we must note that the data covers the first 9 months of the year outside of peak trading only, so the key retail sell through period is not captured in this, so if for instance we had a particularly bad last quarter, the full years results could be significantly worse than this – however, we don’t see that happening at all. In fact there is a fair chance of the final full year figures showing even more growth, perhaps even sneaking to double digit growth.

The reason being that global toy market size for any given year is hugely driven by the movie slate for that year, and for the general momentum behind movie franchises. As I’ve written elsewhere, we are entering a golden period for toys where there is so much guaranteed movie activity on so many proven hit movie franchises which are guaranteed to shift toys off shelves in huge quantities, and with an ongoing year on year movie slate which toy executives from previous eras would kill for!

In previous articles written this year I highlighted how the toy industry was set for significant growth this year, and this latest release of data seems to support that opinion. I can’t however claim to be particularly prescient or brilliant in this prediction, if you sat down 100 toy industry people and showed them the movie slate for a given year, 99/100 of them would be able to accurately predict higher/lower years for the industry based purely on what movies are coming out.

Furthermore, when we look forward into 2016, we have not just a very strong movie slate (I’m not repeating the list, just click here for the year in film 2016: https://en.wikipedia.org/wiki/2016_in_film) but also an almost unprecedented forward momentum from numerous franchises. Above all Star Wars – that behemoth of toyetic movie franchises – launches very late for a toyetic movie (mid December), meaning that a large proportion of the expected monstrous toy sales resulting will definitely go into the traditionally quiet Q1 2016. By delivering a significantly higher Q1 than would usually occur, The Force Awakens will kickstart a year that may well surpass 2015 in terms of toy sales, and with a Star Wars spin off film among the myriad of 2016 blockbusters due to hit global cinema screens, the outlook is better for the toy industry looking forward than perhaps it has been for a long time.

The challenge of course is to remember the bottom line, because while consumers will buy licensed toys in gargantuan quantities, and retailers will lap up anything that moves off shelf quickly, toy companies neeed to work ten 10 times harder to push their own brands to protect both profitability and their own asset value…be interesting to see how many companies manage to protect their long term success/value at the same time as milking these licensed heroes to ensure that this growth is healthy for the long term!

 

by Steve Reece, CEO of Kids Brand Insight www.KidsBrandInsight.com,  a leading Consultancy to toy, game and kids entertainment companies around the world, which helps companies find the right toy & game factories, consumer research test their products with kids and parents and secure export distribution/market entry around the world