Cautious Courtship at the Hong Kong Toy Fair
|Jan 13, 2008|
The Hong Kong Toys and Games Fair, Asia’s largest toy show, like any trade show, plays out like a sort of singles bar for the industry’s executives. Buyers and sellers congregate in one location to check each other out, hoping to find suitable partners for mutually beneficial relationships. When you hear the words, “is that your best price?” you know things are getting serious and a deal is close to being consummated.
By the end of the show, the sign of success is a notebook full of contact details because money rarely changes hands here. Instead it’s the promise of future exchanges and dealings that draws these partners together. This year, however, a new wrinkle was introduced, a kind of industrial variant on the nasty social mishap that can mute the ardor in any single’s bar.
Sweeping through the ranks of toy factories in China has been a virus of substandard manufacturing practices that led to the recalls of millions of consumer products last year. With the biggest players in the toy industry affected, like Mattel, the shock was considerable. Contaminated pet food and toothpaste, substandard tires, and toys painted with lead-laced paints have led to intense scrutiny of China’s manufacturing industry and clearly not all is well.
The president of the Toy Industry Association in the US, Carter Keithley, gave his prognosis by saying, “The lead paint recalls were particularly troubling because the use of lead paint on toys has been forbidden for more than 30 years. Our analysis of what happened is that our toy safety standards are excellent, as they have been for years, but toy safety testing at the manufacturing level failed us.”
The toy industry is big business for both Hong Kong and China and despite the recalls, the toy industry is still vibrant. Hong Kong’s toy exports, almost all of which are made in Guangdong, grew 25 percent in the first 11 months of this year to US$11.4 billion. Exports to the United States and the European Union grew by 4.7 percent and 24.2 percent respectively.
R. Mistry, a toy buyer visiting the show from the UK, thinks concerns about quality standards are overplayed. “Those recalls only affected Mattel and the companies they deal with. If you have any problems with quality, then you should find a different supplier.”
Mistry has been coming to Hong Kong’s toy fair for over 10 years. His shop in Leicester, England caters primarily to tourists and he says the scare is not a bother. “The toys we sell are for older kids so we don’t have the same safety concerns as those toys meant for young children.”
A seller who does produce toys for young children, up to 3 or 4 years old, is Franky Gao, a Shanghai-based toy manufacturer. At the midpoint of the four-day fair, Gao acknowledged that sales were down from past years past due to the product recalls. His company is trying to address the issue, he says.
Gao’s company has been in business for more than a decade and he’s been to the toy fair at least six times. His booth stands out for its basic and rustic feel. The toys are all made from chunks of wood, far too large to fit into a child’s mouth. There’s a wooden train, a wooden clock, and lots of wooden blocks of varying dimensions. Red, green, and yellow are the only colors used, sparingly, to complement the lacquered wood of the toys. “Because of the problems with Mattel our idea is to show less color so people will know they’re safe,” he said.
“Our motto is simple, safe and environmentally friendly. There’s only one other booth offering natural products like ours. We also have some inflatable toy products made from TPU [Thermoplastic Polyurethane] rather than PVC [Polyvinyl chloride] which is not very healthy for small children,” he added. PVC often contains chemical additives that could be absorbed into the body through repeated exposure. American giant retailer Toys R Us withdrew some of its toys made with PVC several years ago.
More than 21 million Chinese-made toys have been recalled by Mattel so far because of lead paint or small magnets that could be swallowed. The shadow on the fair was symbolized in many ways by Cheung Shu-hung, the owner of Lee Der Industrial Co., who hanged himself in August after Mattel recalled nearly a million plastic Big Birds and Elmos made by the firm because they were adorned with lead paint. Lee Der later said their boss was done in by a close friend who supplied the tainted paint.
Li Qingxiang, an official in the Guangdong Province Entry-Exit Inspection and Quarantine Bureau acknowledges that “some enterprises have chaotic management systems,” that make it impossible to trace the sources of their supplies. But he also tried to put the best face on it, saying, “Quality issues are inevitable within the manufacturing industry… but toys exported from China are basically safe.”
True to form, boosters from Hong Kong officialdom were quick to proclaim everything good and getting better. Hong Kong Trade Development Council (TDC) Toys Advisory Chairman Jeffrey Lam praised the industry’s “adherence to the highest standards of product quality that made 2007 another gratifying year.”
Hong Kong’s Financial Secretary John Tsang praised Hong Kong toy companies at the fair for responding quickly and effectively to the recent recalls. “A growing number of firms have recruited their own in-house testing teams and are developing their own testing facilities. They are using independent performance monitors to ensure that their products are safe. And all companies are subjected to heightened inspection and supervision procedures in the mainland,” he says
The American government is stepping up its own health checks on the industry. A law has already been drafted but not yet finalized that will place new restrictions on companies importing toys into the US. Richard O’Brien from the US Consumer Product Safety Commission discussed the new measures during a toy safety seminar at the fair. He said that the allowable lead content will be pushed “close to zero,” there will be mandatory third-party testing and labeling of the date and location of production will also be required.
Meanwhile, out among hundreds of booths displaying rows of shiny new toys, business was still being done, but the free-wheeling days of the past have disappeared as buyers become more selective and demanding of their partners.