Vietnam toys sector thrives, but struggles to keep up with new design demand

Vietnam's toys made of natural materials are highly sought by buyers abroad.

Domestic toy manufacturers are producing safe wooden toys that stimulate children's intellectual development at reasonable prices, greatly appealing to international consumers. Export value increased 10 percent over three years since 2011. Their highly customizable, eco-friendly products are able to suit the needs of buyers.

Yet, despite their many appealing products, some enterprises are struggling to keep up with buyers' demand for new designs. For even large local companies, it can take approximately two months to create new product designs. Due to limited resources, suppliers are still working to develop new product designs and upgrade production technology.

Another factor that limits designs of toy companies is their difficulty in employing skilled workers. They have to train new employees from scratch.

Unavailability of some materials in domestic markets restricts manufacturers from innovating or inventing designs.

Exports

The export value of Vietnam toys and sports requisites, parts and accessories thereof hit $484.4 million in the first eight months of 2015, increasing by 1% compared to the same period last year.

The export value of Vietnam toys, games and sports essentials have over 10-percent increase during 2011 to 2014, according to the International Trade Statistics. From 2014 to 2015, sales rose by 94 percent of $650 million, which was 32.6 percent increase from the sales in 2013.

Top markets include the United States, European Union, Japan and South Korea. However, some suppliers have seen a decline in the export to South Korea because of economic downturn.

Competitive advantages

Suppliers can utilize available local rubber wood and wood processing technology, as wood industry is Vietnam's strength. They make safe and good quality plush toys, and launch new original technological toys like a robot toy that can dance in the music and the longest-spinning top.

Suppliers can offer 100 percent customization in OEM orders, launching about 10 new models per month to attract more ODM orders. Tech toys companies continue to innovate increasingly advanced versions of a model of toys and launching new models once a year. Vietnam suppliers accept low MOQ orders with high level of handmade elements.

Challenges

The industry faces a few challenges such as having only a few tech toys suppliers in the country.
The prices are higher than those imported from China because they are made in a way that is safe for children. Their models are made of good quality paint, without sharp edges and expensive materials.

Plastic toys, on the other hand, lack design diversity and creativity. Suppliers have not yet fully focused on investing in research and development, design, and marketing, among others.

The copyright violation is also a challenge for Vietnam toys suppliers. Many toys suppliers just copy hot designs of branded toys and sell copycats at a lower price.

Some companies said the lack of state support has kept the industry underdeveloped. In other countries like Denmark and China, the toy industries are subsidized by state in terms of tax, land rental, interest rates, export and import logistics.

Another challenge is the use of imported materials, as they surpass local products in terms of availability, prices and quality.

See a comparison table of toys suppliers on GlobalSources.com