Toys"R"Us is not the only overseas toy seller that has found that China is a promising market while at the same time facing obstacles in their global businesses.
Danish toy seller The Lego Group, headquartered in Billund, for example, saw its global revenues slump 5 percent year-on-year in the first half of 2017. The company was also reportedly going to cut 1,400 jobs, Bloomberg reported on September 5.
In China, however, Lego achieved a double-digit growth in revenues in the first six months of this year, according to Lego's half-year financial report.
High-end Dutch toy seller Instore Kids Corners (IKC) has also found growth in the Chinese mainland recently after entering into the market in 1999. The company witnessed 7.05 million yuan ($1.06 million) in sales in the first eight months of this year, up 29.08 percent year-on-year. Furthermore, in 2016 and 2015, the company experienced 15.23 percent and 3.73 percent sales growths, respectively, according to data the company sent to the Global Times.
Doris Zhang, marketing manager at IKC, said that China has now grown to be the company's second-largest market, lagging just behind Europe.
'Two-child bonus'
According to data that London-based business intelligence company Euromonitor International sent to the Global Times on Tuesday, retail sales of traditional toys in China reached 69.3 billion yuan in 2016, up from 64.5 billion yuan in 2015.
Meanwhile, Javes said that China's prosperous economy has been one of the reasons behind the escalating market demand for toys, but the change in mind-set regarding the core purpose of the toy is an even more important reason.
"In the past, a toy was used only as a reward for a child's good behavior when studying. But today, mothers and fathers see that toys are also essential to children's comprehensive growth, including their social development, imagination and creativity," he said.
"We see good prospects for the Chinese market. The [recent] two-child policy is a bonus, but even without it, the market's future would still be bright," he noted.
Carol Lü, senior research associate at Euromonitor International in Shanghai, told the Global Times that China's growing middle-class population and growing personal disposable income allow Chinese consumers to purchase more overseas toys with higher unit prices.
"Besides, Internet retailing allows more consumers to purchase overseas toys even if they cannot find the toys in physical stores," Lü noted.
Seeking top quality
Several Chinese consumers told the Global Times that they prefer to buy overseas toys as they believe they are of better quality.
Dong Yaqi, a mother who lives in Shanghai, said she prefers brands like Lego, whose toys' structures have "precisely made curves and angles."
While many Toys"R"Us products are manufactured in China, Javes reassured that the country has high-quality standards and that his company oversees strict tests on all the toys it sells.
But there are also consumers interviewed by the Global Times who argue that Made-in-China toys which belong to overseas brands are of a worse quality than those made overseas.
According to a report published in March by money.cnn.com, nearly 90 percent of all toys sold in the U.S. are made in China, but some U.S. toy sellers are still reluctant to offshore their production factories to China because they fear losing control over quality standards.
"It's understandable that overseas toy sellers would have such concerns, as it's hard to make sure that a company's overseas manufacturing standards always keep up with the requirements of the headquarters," Zhang said.
"However, an overseas company can send management staff to China to supervise manufacturing in the early stages, and gradually the Chinese factories develop a management system that helps employees understand what [standards] the brand requires during production," she said, while stressing that Chinese manufacturers now have a heightened awareness of quality in comparison to the past.
"I don't think companies need to worry too much about Made-in-China products these days," she noted.
