VietNamNet Bridge - Vietnamese manufacturers make toys for outsourced contracts and satisfy the strict requirements set by foreign partners, but cannot cement their positions in the home market.

The domestic toy market is described as a lucrative market with annual growth rate of 15-20 percent per annum. However, 95 percent of their products are for export, while only 5 percent is sold domestically.

Trinh Chi Cuong, general director of Dai Dong Tien Plastics said Dai Dong Tien has been doing the outsourcing for a Swedish company for years. The job is a large part of the company’s revenue. 

However, he noted that toy manufacturing is a ‘global playing field’ where the best known brands are very large manufacturers with many years’ experience. If joining the playing field, one must be powerful enough from production to distribution. More importantly, he must have the brand of international stature. This will take time and big money.

Some companies have smart and educational wooden toys which have been highly appreciated in the market. However, they only focus on export.

Over the last 20 years, a company doing outsourcing for Tahuky brand has been making high-quality toy products from timber and the products have been a favorite in both Vietnam and foreign markets.

However, the representative of the company admitted that the products were made only for export. 

“The life span of toys is short, therefore, manufacturers have to design new products regularly. One new sample can be churned out every two months. If the production volume is not big enough, manufacturers will suffer a loss,” he explained. 

The domestic toy market is described as a lucrative market with annual growth rate of 15-20 percent per annum. However, 95 percent of their products are for export, while only 5 percent is sold domestically.

“Meanwhile, the cost for designing and marketing a new product is very high,” he added.

Duc Thanh is well known as the company which has made heavy investments to develop Winwintoys branded toys for children one year old and older. However, its revenue from the domestic market remains modest.

Cho Lon Plastics Company has spent hundreds of thousands of dollars on the necessary machines and equipment to make toys and sell at the prices 20-30 percent lower than Chinese products and 59-70 percent lower than imports from Japan and South Korea. 

However, it still has to fulfill outsourcing contracts to earn more.

N2T Nam Thanh, after realizing that foreign-made toys are four times more expensive than domestic-made ones, decided to launch a new brand and sell products at ‘very reasonable’ prices. However, the sales were very slow in the first six months because the brand remains unfamiliar in the market.

A toy manufacturer admitted that it was very difficult to compete with Chinese cheap products.

“Chinese make products in large quantities, so they can offer very competitive prices,” he explained.


DNSG