First-Hand Tips for Importers from Chenghai, World’s Largest Toy Manufacturing City
Are you an importer looking for high-quality China toys at competitive prices? You have probably already come across the town named Chenghai in Shantou city. With its rich history in toy manufacturing and unique business culture, Chenghai is the global hub for toy production, where 50% of the toys made in China are made and 30% of the world’s toy production takes place. The Chenghai toy factories account for a significant percentage of the world’s toy output.
As someone who helped clients to work with toy suppliers in Shantou Chenghai in the past, I recently visited this toy city to visit several toy factories and showrooms to learn the current state of this market. I gained valuable insights into the current state of this city’s toy production market. I explored the opportunities and challenges of sourcing toys from this region.
Here, I will share my experiences and offer advice for importers looking to source plastic toys that are made in China.
Chenghai’s success story
Chenghai, as part of the Chaoshan region in China’s industrial Guangdong province, was one of the earliest 6 Special Economic Zones in the country that was allowed to produce for foreign trade in 1979. Dozens of companies specialising in the supply chain of toys set up in the early 1980s. Chenghai’s long-standing experience in toy manufacturing has allowed it to develop a strong foundation in toy design, production, and distribution, making it the no.1 toy-producing city in the world.
Chaoshan’s unique business culture
The Chaoshan region has a unique and strong local identity and business culture. People speak their own Chaoshan language, which is very different from Mandarin. The region also has their own food and traditions. Particular emphasis is put on entrepreneurship and business in their culture. There is high trust and cooperation within the closed social networks.
Companies strive to do business with the people in their direct networks. This culture of loyalty and support within the local business community can be within every company in the city. For every question or demand you have, your factory manager will have a cousin, classmate or friend in the city who can arrange it for you. But this fierce business culture also implies that Chaoshan people are known as fierce negotiators. Getting solid relationships with toy suppliers China as an outsider is also challenging.
This business culture has brought significant advantages to the region’s manufacturing sector. In addition, most of the components and materials used in toy production in Chenghai are sourced locally in Guangdong province. This gives toy suppliers in Chenghai a competitive advantage in production costs compared to other toy-producing areas inside and outside China.
Challenges faced by Western buyers when sourcing toys from Chenghai
When sourcing (electronic) toys from China, you will likely need to source from suppliers in Chenghai. This means you must face the inherent challenges of working with suppliers in this region and overcome these challenges. These are some of the typical challenges you may face:
1. Chaoshan’s complex business culture:
Have you experienced communication hardships when working with your toy suppliers in Chenghai? The Chaoshan business culture can be challenging for outsiders. When I worked with toy factories, I have seen them trying to dodge responsibility, seen quality issues arising and no willingness by the factory to improve and factories that constantly wanted to renegotiate everything. Working with these factories requires you to be willing to continually negotiate. You must be proactive and patient to protect your interests.
However, I noticed that if you build a personal relationship with the supplier, these issues can be solved for a big part. Personal relationships and trust play a crucial role in the business culture in China, and this is even more the case in this region. Companies prefer working with people they know from their personal lives, like friends and family. It may be challenging to build relationships with suppliers as an outsider. But making some personal connections and being willing to work in a give-and-take way can bring your company further. Buyers who don’t want to accept this business culture will have a hard time negotiating and establishing a good working relationship with their suppliers. They will see the factories always wishing to get the most out of themselves.
You must be patient, proactive, and constantly negotiating with your suppliers. But it also helps to build a rapport with them. Show interest and respect for the local culture that the people here are proud of. This will help you get much more done in this region.
2. Quality control issues:
Did you encounter quality issues that caused retention costs and damaged your brand reputation? Have you struggled with situations when the supplier simply denied your problem?
Quality issues in toys from Chenghai are often caused when a supplier prioritises personal relationships over quality when selecting suppliers within their network. This can lead to factories working with subpar materials, components, and packaging, ultimately producing a final product with quality issues. The culture of always maintaining harmony with their peers can make your supplier unwilling to hold their own suppliers accountable if quality problems occur. They may try to dodge responsibility and deny the problem, possibly bringing you into an annoying discussion with your supplier about quality issues that aren’t solved.
You could tackle this problem by inspecting the materials components and packaging yourself before production so you stay in control of the quality. Also, be prepared to negotiate to be patient and to proactively manage the suppliers to keep improving.
3. Unreliable suppliers:
When sourcing toys from Chenghai, you may encounter many middlemen, resellers, and trading companies. There is an abundance of these in the market, and many add little value for the customer. In recent years, the role of these intermediaries has largely been taken over by Alibaba and factories that have recruited English-speaking staff to serve their customers directly. Trading companies, therefore, have a hard time finding customers these days. Especially now that the whole market is shrinking, many middlemen companies still try to survive by misleading customers. They pretend to produce goods themselves or claim only they can deliver them. Additionally, factories in Chenghai often include products from other factories in their catalogues. All these practices are usually very untransparent and fully stay behind closed doors.
Do you want to stay in control over the price, quality and delivery of your orders? Then you should be aware of these practices and get to know your toy manufacturers in China. If your order amounts are big enough, know what supplier you source, and work with the factory directly.
4. Compliance with market regulations:
Are you worried that the goods you source may not comply with your market’s regulations?
Buyers must ensure that the products they import comply with relevant directives and certifications in their market. For example, toys from China, intended for sale in the European Union must comply with the European Union Toy Safety Directive (TSD) and the CE marking requirements. These regulations are stringent for toys. The regulations try to protect the environment and children’s safety and health.
Chenghai toy factories produce for the entire world. Complying and regularly testing for compliance with the strict regulations in Western markets is expensive. Producers of lower-priced toys not intended for the Western market are usually unwilling to invest in this. They may, however, still provide fake certificates if you push them to give you certifications. This is a common practice in China. In reality, many toys and other goods on platforms like Amazon don’t actually comply with the regulations. These days, platforms like Amazon are getting increasingly strict and let you prove that your products do comply with the regulations.
You are responsible that your products comply to your market’s specific regulations. You cannot fully rely on your supplier for this. It’s best to work with suppliers with experience in your home market. These suppliers usually can comply with the regulations. However, you’d still better check all test reports by yourself. When were the tests executed? Are the tests performed on the exact same product, and do reliable test labs perform them? Are all test reports genuine? If you get the answers to these questions, you can better know if your products comply.
5. Lack of innovation by the factories:
Do you have trouble finding suppliers of innovative toys that the children in your market are curious about?
The staff in the Chenghai toy factories usually does not have a deep understanding of Western markets and the expectations of Western consumers. Most people in Chenghai have simply never met or talked to a child in the West. This leads to a lack of innovation and differentiation because they need to figure out what to design. Many factories copy each other’s products rather than develop new and unique offerings. They even admit to doing this. For example, one factory driver admitted to me that their company always goes to trade fairs to see the competitors’ products just so they can copy them. The result of this behaviour is that many factories produce exactly the same products, which may not be very interesting for the consumers in your market.
If you’re looking for innovative products, you can do more research about what the toy suppliers in Chenghai can deliver. You can work closely with the factories to bring in your own ideas.
Opportunities for importing from Chenghai toy factories
Sourcing from Chenghai toy factories offers a wide range of opportunities for buyers. The city is home to an enormous variety of toy suppliers, from small factories to larger companies and trading companies that resell for lower MOQs. When visiting the city, you can explore warehouses and manufacturers, giving you a great understanding of what products they produce here and the wide variety of options available.
Moreover, some toy suppliers in Chenghai specialise in serving he EU and US markets. These companies are well-suited to serving Western customers and often have more knowledge and experience in the Western market. They can help buyers to tailor their product offerings to their specific market needs.
Another advantage of sourcing from Chenghai is the city’s specialisation in toy manufacturing, which has led to the development of an excellent infrastructure and networks to support the industry. It may help your business scale and grow with Chenghai suppliers easily and quickly. Many factories are efficient in their production methods and can quickly adapt to buyers’ demands, making it easier to meet market demand and stay competitive.
Finally, Chenghai has many technically skilled staff with lots of experience producing high-quality toys. Many factories have engineers, designers, and even PCB design teams who can help buyers realise their ideas for new and innovative toys with new materials or functions. As a result, buyers can benefit from shorter development times and faster time-to-market, allowing them to stay ahead of the competition.
Tips when sourcing from Chenghai toy factories
Based on my experiences, I have the following tips:
- Look for toy suppliers in Chenghai that specialise in producing the types of toys you want to import. This will help you ensure that you work with suppliers with the expertise and experience necessary to produce high-quality products.
- Visit Chenghai in person to meet with potential suppliers and inspect the products before making any purchasing decisions. This will help you build relationships with suppliers and ensure the products meet your quality standards.
- Be aware of the cultural differences when negotiating with suppliers in Chenghai. Show respect for their local culture and customs to build trust and rapport.
- Work in close cooperation with factories in Chenghai to stay in control of the price, quality, and delivery of your orders. This will help you avoid intermediaries and trading companies that may not add value to your business.
- Work with innovative toy factories in Chenghai that can help you with offerings that fit your specific market needs. This will help you differentiate your products from competitors and meet the unique preferences of your target market.
Get help from Sino Import Solutions
Sino Import Solutions can help your company in your toy sourcing challenges. Contact us to get expert advice on working with your supplier. Or visit our services pages to understand how our services can help you
