Toys

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					ฝ่ายวิจัย บรรษัทเงินทุนอุตสาหกรรมแห่งประเทศไทย

ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

Toys
Toys are playthings intended for not only enjoyment but also creativity and intellectual development of children. In the early days, toys were largely an imitation of pets or wild animals made of carved wood or stone or any kinds of objects available in each community. Some samples of these toys were cockhorse, an imitated horse made of stalks of banana tree for Thai children, and balls made from bladder of goat or sheep for Indian children. Toys of some ancient tribes were used as playthings for children as well as home decorations or for worshipping the sacred images in their beliefs. Toys for sales were mostly made of tin and have been developed all along to metal and plastic nowadays. Today, toys are vital to the Thai industrial sector since they are directly and indirectly related to other backward linkage industries. For example, plastic toys are produced from plastic resin of the petrochemical industry, or wooden toys are primarily made of rubber wood. Furthermore, the toy industry not only is associated with packaging, transportation and insurance services, but also ensures optimum utilization of resources such as scraps of wood or cloth for making toy parts. Toys can be classified either by type of materials or by application. By type of materials, toys are classified into three groups: - Plastic or metal toys share the largest 70% of the total toy production. They are the type of Original Equipment Manufacturer (OEM) product, using production techniques and raw materials from abroad. They are subdivided into two segments: mechanical toys which are medium to high quality products mainly for export; and non-mechanical toys such as model airplanes made from plastic or metal chiefly distributed in the local market due to their cheapness. - Stuffed toys constitute about 15% of the total production, made of cotton, wool and synthetic fabric. - Wooden toys are largely produced from rubber wood, making up around 15% of the total production. Classified by application or HS code, there are three types of toys: - Wheeled toys, like tricycles or doll’s carriages, are made of metal or plastic, categorized under HS code 9501. - Dolls or stuffed toys are made of cloth stuffed with kapok or synthetic fiber in human or animal characters. They are categorized under HS code 9502. 1

ฝ่ายวิจัย บรรษัทเงินทุนอุตสาหกรรมแห่งประเทศไทย

ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

- Model toys are primarily assembled items or toys for educational purpose, classified under HS code 9503. Production The Thai toy production was originally small- and medium-scale industry producing cheap toys to serve the domestic demand only. Later, the Board of Investment began its earnest promotion of toy production to become an export-oriented industry by way of tax privileges such as exemption of import duty on imported raw materials, reduction of corporate income tax for exportoriented producers, etc. Such move could attract joint venture investments by foreign investors mainly from Hong Kong, Taiwan, Japan and the US. At present, there are over 300 toy manufacturers in Thailand. More than 80% of the total toy production is exported. In toy production, prudent selection of raw materials is essential since toys are subject to high safety standard requirements. Hence, a thorough inspection is a must. Examination is made at all production steps ranging from selection of raw materials to test of toxicity of chemicals applied. Toys produced must also meet the specifications of each importing country. Raw materials form the biggest part of production costs, accounting for 35%-60% of the total. For plastic toys, major raw material is unused plastic resin to ensure safety for the children. More than 70% of plastic resin consumed has to be imported owing to insufficient domestic supply. In the case of wooden toys, raw material used is rubber wood available locally. Raw materials of stuffed toys are also procured locally, including cotton, terry or materials left from other industries. Toys are a labor-intensive industry. Wooden toy production exploits the largest workforce, with labor cost accounting for 30% of the total costs as labors are needed at all stages. The labor cost of stuffed toys makes up about 25% of the total costs and plastic and metal toys 20%, which is the lowest of all since parts of these toys are machine-made while labors are needed at only some stages. Production cost structure (%) Item Raw materials Labor cost Other expenses Total Plastic and metal toys 60 20-25 15-20 100 Stuffed toys 55 25 20 100 Wooden toys 35 30 35 100 Source: Commodity Division, Department of Foreign Trade, Ministry of Commerce

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ฝ่ายวิจัย บรรษัทเงินทุนอุตสาหกรรมแห่งประเทศไทย

ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

Marketing The Thai toy industry is export-oriented, with as much as 80% of the total production shipped to the overseas markets. The primary export markets comprise: The US is the world’s largest toy market since the Americans give high priority to the children. Particularly, in such festive events as birthday, Easter and Christmas, parents usually buy toys as presents for their children. Best selling items are stuffed toys copying Walt Disney cartoon characters such as Pooh, Buck Bunny, which is best sold during Easter festival, Santa Claus dolls, which are in great demand during Christmas time, etc. Other popular items are creativity-oriented toys. Toys are available at department stores and chain stores like Toys “R” Us. China is the largest supplier to this market, accounting for 82.2% of the total toy imports. Thailand is in the ninth rank, sharing 1.02% of the total imports of about US$ 9.589 billion in 2000. The US’s Toy Imports Value by Country Countries Year 2000 China 7,885.581 Mexico 317.307 EU 262.020 Taiwan 231.513 Hong Kong 158.121 Canada 138.288 Indonesia 133.872 Malaysia 110.379 Thailand 98.312 Japan 73.329 Korea 58.300 Switzerland 48.558 Philippines 20.833 Sri Lanka 7.876 Others 45.480 Total 9,589.258
Source : The U.S. International Trade Commission

% 82.2% 3.3% 2.7% 2.4% 1.6% 1.4% 1.4% 1.2% 1.0% 0.8% 0.6% 0.5% 0.2% 0.1% 0.5% 100%
(Million of US Dollars)

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ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

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The EU comes second after the US, with Germany, France, Italy, Belgium and Holland as major markets. Buyers are primarily women purchasing toys for their children or close relatives. Selection is made based chiefly on design, quality, price and safety. Most popular items are plastic toys such as Barbie dolls, stuffed dolls and wheeled toys. The EU formerly imported toys from among its member countries, but later on shifted to China due to lower production costs as fueled by very cheap labor cost. In 2000, China occupied roughly 52.8% of the EU’s total toy imports of approximately US$ 6.626 billion while Thailand constituted 1.1% valued at US$ 74.85 million, ranking eighth. The EU’ s Toy Imports Value by Country
Countries China Intra EU Switzerland Taiwan Hong Kong USA Indonesia Thailand Czech Rep. Malaysia Vietnam South Korea Hungary Poland Israel Others Total
Source : EUROSTAT

Year 2000 3,498.870 2,063.960 175.875 108.643 91.636 87.617 81.649 74.847 53.328 43.991 41.768 4.233 2.352 2.351 0.846 293.938 6,625.905

% 52.8% 31.1% 2.7% 1.6% 1.4% 1.3% 1.2% 1.1% 0.8% 0.7% 0.6% 0.1% 0.0% 0.0% 0.0% 4.4% 100.0%
(Million of US Dollars)

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Japan is the leading toy market in Asian region. The best selling items are stuffed animal dolls and electronic toys. Most buyers are parents or old relatives purchasing toys for their kids or young relatives, with preference for toys of good quality or educational value and those that family members can 4

ฝ่ายวิจัย บรรษัทเงินทุนอุตสาหกรรมแห่งประเทศไทย

ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

play together. Products are partly supplied by Japan’s reputable manufacturers, Bandai and Sega, and partly imported. The largest supplier to Japan is China, followed by the EU. Thailand comes third, principally producing on a subcontracting basis under designs and trademarks of the Japanese importers. In 2000, Japan’s imports from Thailand amounted to US$ 49.5 million or about 3.9% of the total imports. Japan’s Toy Imports Value by Country Countries Year 2000 China 1,012.395 EU 59.211 Thailand 49.505 Taiwan 37.806 South Korea 29.111 USA 24.681 Philippines 11.589 Indonesia 10.681 Hong Kong 8.025 Vietnam 4.583 Others 21.930 Total 1,269.518
Source : Japan Customs

% 79.7% 4.7% 3.9% 3.0% 2.3% 1.9% 0.9% 0.8% 0.6% 0.4% 1.7% 100.0%
(Million of US Dollars)

Exports Between 1992 and 1998, Thailand’s toy exports amounted to over Bt. 7 billion or US$ 300 million a year, representing an average annual growth rate of about 1.8%. 1999 saw a 2.76% fall in such exports, triggered by economic stagnation in the major markets like Japan and Germany, which had consequently cut their purchase orders for Thai toys. Another negative factor was the more expensive Thai toys as compared with those of China and Vietnam which boast lower production costs. Some producers consequently relocated their production base from Thailand to China. In the US dollar term, the exports have slid steadily since 1996 on account of the baht fluctuation after the adoption of the managed float exchange system. During 1996-1999, the exports were valued at approximately US$ 310 million, US$ 265 million, US$ 220 million and US$ 230 million respectively. Total exports in 2000 in the dollar term remained unchanged at US$ 230 million against those in 1999, but posted a growth of about 6.1% in baht term, worth about Bt. 9.255 billion. This 5

ฝ่ายวิจัย บรรษัทเงินทุนอุตสาหกรรมแห่งประเทศไทย

ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

was because some kinds of toys were in great demand in the overseas markets. Among them were wooden toys which have won greater acceptance in the world market and been recognized as “Wood Toy is Thailand”. Due to the unique, magnificent and hard-to-copy designs, there are large purchase orders for Thai wooden toys from the overseas markets. However, the overall toy exports remain unfavorable. Thailand’s Total Toy Exports and Export Market Structure In 2000 THAI EXPORT VALUE Share of Export Value to Major Markets OTHERS Bt. Million US Million
7,855.52 8,284.51 8,972.50 8,724.56 9,254.75 310.00 264.09 216.88 JAPAN 230.50 19% 230.45

YEAR 1996 1997 1998 1999 2000

17%

USA 35%

Source: Department of Business Economics and Customs Department

EU 29%

The prominent export markets in 2000 still were the US, the EU and Japan. Exports to the US were the largest, accounting for about Bt. 3.263 billion or US$ 98.3 million, representing 35.3% of the total toy exports. Coming second was the EU market, with export value of Bt. 2.667 billion or about US$ 74.8 million, sharing 28.8% of the total export value. Major buyers in the EU were England, France and Germany, with export value of Bt. 824.7 million, Bt. 527.8 million and Bt. 513.4 million respectively. Japan ranked third, with the amount of Bt. 1.755 billion or about US$ 49.5 million, sharing 19% of the total exports. Other export markets included Canada, Malaysia, South Korea, Australia, etc., with a combined value of about Bt. 1.570 billion or 16.9% of Thailand’s total toy exports. Exported Items Ride-on wheeled toys - Exports of wheeled toys were worth about Bt. 141.7 million or 1.6% of the total toy exports in 2000, growing 37.6% from 1999 as spurred by increased exports to the US and Japan. The principal markets are the EU, the US, Japan and Australia. In 2000, the EU occupied the highest proportion of 43.8% of the total exports of wheeled toys. Major markets in the EU were England, France and Germany. Classified by country, the US came first at 20.8% of the total exports of wheeled toys, followed by Japan 7.9% and Australia 6.8%. Thai exports to the US, Germany and Austria increased threefold in value versus the figures in the preceding year.

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ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

Export value of Wheeled Toys by Country
2539 EU 49,450,507 U.S.A. 1,715,940 JAPAN 1,709,326 AUSTRALIA 20,485,344 CANADA 55,762 SAUDI ARABIA 8,700,705 KUWAIT 2,966,810 U. ARAB EMIRATES 13,102,091 NORWAY 6,726,967 ISRAEL 0 OTHERS 19,045,115 TOTAL 123,958,567

Countries

EXPORT VALUE (Thai Bt.)
2540 37,318,844 824,888 1,112,771 11,986,802 8,918 3,820,464 1,445,005 2,800,018 3,123,773 4 25,463,186 87,904,673 2541 55,377,380 4,260,901 380,307 9,601,818 2,752,160 9,278,808 2,902,631 10,317,979 2,830,658 27,949 18,975,079 116,705,670 2542 58,581,890 6,773,887 2,211,493 8,722,226 1,026,866 7,973,339 653,691 1,806,641 3,971,450 321,877 11,063,755 103,107,115 2543 62,113,278 29,525,994 11,217,501 9,702,262 3,859,367 3,621,520 2,358,345 1,995,113 1,646,855 1,512,639 14,110,441 141,663,315 2539 1,951,480 67,717 67,456 808,419 2,201 343,359 117,080 517,052 265,468 0 751,583 4,891,814

EXPORT VALUE (US Dollars)
2540 1,189,635 26,295 35,472 382,110 284 121,787 46,063 89,258 99,578 0 811,705 2,802,189 2541 1,338,588 102,995 9,193 232,096 66,526 224,288 70,163 249,407 68,423 676 458,668 2,821,022 2542 1,547,738 178,967 58,428 230,442 27,130 210,656 17,271 47,732 104,926 8,504 292,305 2,724,098 2543 1,546,645 735,209 279,320 241,590 96,100 90,177 58,724 49,679 41,007 37,665 351,356 3,527,473

Source: Department of Business Economics Dolls or stuffed toys - These items are in great demand in the overseas market. In 2000, the exports of dolls were valued at about Bt. 423.4 million or US$ 10.5 million, constituting 4.6% of the total toy exports and rising roughly 20% from 1999. The biggest market in 2000 was the EU, accounting for Bt. 166.2 million or 40% of the total doll exports, with Germany, Belgium and Italy as the key buyers. The second was the US accounting for 38% or about Bt. 164.7 million, followed by Norway, Australia and Japan with a value of Bt. 15.8 million, Bt. 13.7 million and Bt. 12.1 million respectively. Export value of Dolls by Country
Countries
EU U.S.A. NORWAY AUSTRALIA JAPAN TAIWAN SINGAPORE MYANMAR CANADA SAUDI ARABIA OTHERS TOTAL

EXPORT VALUE (Thai Bt.)
2539 227,585,781 131,698,691 14,386,666 2,457,698 12,855,079 703,881 3,490,724 479,950 1,521,776 201,760 24,436,744 419,818,750 2540 260,432,794 228,732,168 18,536,263 1,941,205 6,569,392 1,263,637 6,293,373 1,635,242 3,117,094 196,496 24,130,810 552,848,474 2541 188,216,151 178,856,806 9,416,742 1,984,798 13,649,922 327,085 3,896,762 1,603,900 5,689,353 904,236 24,867,209 429,412,964 2542 136,329,252 137,840,884 14,727,528 3,099,574 15,512,345 1,312,186 5,430,353 947,650 3,179,664 900,850 26,581,582 345,861,868

EXPORT VALUE (US Dollars)
2543 2539 2540 2541 166,149,668 8,981,286 8,301,970 4,549,581 164,650,842 5,197,265 7,291,430 4,323,346 15,756,913 567,745 590,891 227,622 13,694,383 96,989 61,881 47,977 12,127,813 507,304 209,416 329,947 5,239,043 27,777 40,282 7,906 5,215,060 137,755 200,618 94,193 4,134,132 18,940 52,128 38,770 4,060,554 60,054 99,365 137,524 4,058,738 7,962 6,264 21,857 28,263,936 964,355 769,232 601,093 423,351,082 16,567,433 17,623,477 10,379,815 2542 2543 3,601,830 4,137,193 3,641,767 4,099,872 389,102 392,353 81,891 340,996 409,837 301,987 34,668 130,454 143,470 129,857 25,037 102,942 84,007 101,109 23,801 101,064 702,288 703,783 9,137,698 10,541,611

Source: Department of Business Economics 7

ฝ่ายวิจัย บรรษัทเงินทุนอุตสาหกรรมแห่งประเทศไทย

ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

Assembled model sets and other toys for educational purpose - Thai exports of these items in 2000 totaled about Bt. 8.690 billion or US$ 216.4 million, making up 93.9% of the total toy exports and increasing 5% from 1999.
EXPORT VALUE (Thai Bt.)
2539 2,438,791,679 2,526,886,248 952,694,281 102,442,614 40,533,538 154,514,413 122,588,133 228,581,835 58,275,022 15,020,484 671,413,244 7,311,741,491 2540 2,481,888,455 2,496,503,917 1,208,219,881 126,591,572 41,871,585 129,229,676 113,920,763 228,191,191 62,354,138 26,019,338 728,964,743 7,643,755,259 2541 2,574,221,246 2,604,165,031 1,493,053,179 176,270,887 427,383,014 61,537,356 94,282,631 253,012,166 57,373,626 16,079,306 669,005,395 8,426,383,837

Export value of Model Toys and Other Toys by Country
2542 2,860,367,218 2,578,375,180 1,537,229,407 240,534,451 112,756,457 86,575,627 101,427,302 121,266,795 50,850,897 30,318,522 555,888,122 8,275,589,978 2543 3,068,563,783 2,401,219,418 1,731,819,491 246,650,391 220,476,799 133,770,153 110,137,931 96,592,017 91,387,968 69,558,751 519,563,047 8,689,739,749 2539 96,242,766 99,719,268 37,596,459 4,042,724 1,599,587 6,097,649 4,837,732 9,020,593 2,299,725 592,758 26,496,182 288,545,442

Countries
U.S.A. EU JAPAN CANADA MALAYSIA S. KOREA AUSTRALIA HONG KONG TAIWAN MEXICO OTHERS TOTAL

EXPORT VALUE (US Dollars)
2541 62,224,347 62,948,152 36,090,239 4,260,838 10,330,747 1,487,487 2,279,010 6,115,837 1,386,841 388,671 16,171,269 203,683,438 2542 75,571,129 68,120,877 40,613,723 6,354,939 2,979,035 2,287,335 2,679,717 3,203,878 1,343,485 801,018 14,686,608 218,641,743 2543 76,408,461 59,791,320 43,122,995 6,141,693 5,489,960 3,330,930 2,742,478 2,405,180 2,275,597 1,732,041 12,937,327 216,377,982

2540 79,116,623 79,582,528 38,515,138 4,035,434 1,334,765 4,119,531 3,631,519 7,274,185 1,987,700 829,434 23,237,639 243,664,497

Source: Department of Business Economics The major importer of Thai toys in 2000 was the US, accounting for about Bt. 3.069 billion or 35.3% of the total exports of assembled models and other toys, followed by the EU valued at Bt. 2.401 billion or 27.6%. The main markets in the EU were England, France and Germany. Exports to Japan, which ranked third, amounted to about Bt. 1.732 billion or 19.9%. Other markets included Canada, Malaysia and South Korea with export value of about Bt. 246.7 million, Bt. 220.5 million and Bt. 133.8 million respectively. Local Market The local market demand is partly met by some 20% of the total local production and partly by imports. The local market can be segmented as follows: - High-tech toys: These toys, mostly imported, embody beautiful colors, are mechanically operated and have superior quality. They are primarily expensive and sold in department stores. The target customers are highincome earners who prefer quality goods. - Medium-grade toys: These items are produced locally by medium-sized factories using OEM production technology. Some are imported from China,

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ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

India or Vietnam. The selling prices are not quite high. They are marketed at shopping centers or retail outlets in department stores. There is a wide diversity of these toys such as dolls, mechanical toys, etc. They have a broad market size. - Low-grade toys: Most of these toys are produced by small local factories or imported from China and Vietnam, marketed in small shops and stalls. They are of low quality, cheap and easily broken and largely made of plastic, like water pistols. The target group is low-income class. Imports The major imported items are high-quality model toys for educational purpose, mainly high priced and available in toyshops and department stores. Others of them are plastic model toys easily procurable. During 1996-1998, the total imports slipped continuously due to the crisis hitting Thailand which had dampened purchasing power. The imports fell 26.7% from US$ 35.6 million to US$ 26.1 million over such period. Thailand’s Total Import Value and Import Source Structure In 2000

THAI IMPORT VALUE Share of Import Value to Major Markets YEAR Bt. Million US Million China Hong Kong Malaysia Japan 902,594,294 35.62 1996 9% 63% 8% 4% 1,027,921,312 32.77 1997 1,080,057,359 26.11 1998 Taiwan 1,269,840,436 33.55 1999 4% OTHERS 1,382,070,341 34.41 2000
Source: Department of Business Economics and Customs Department 12%

In 1999, the imports could yet again grow, by 28.7% from 1998 with a value of about US$ 33.6 million. Such improvement was spurred by a slight recovery in Thai economy. Several importers thus started to place orders after having suspended for a while. Further growth of 2.4% was posted in 2000, with import value of about US$ 34.4 million or some Bt. 1.382 billion. However, the imports in baht term escalated constantly from about Bt. 900 million in 1996 to nearly Bt. 1.4 billion in 2000, representing an average annual growth rate of 12% as fueled by the unstable baht value.

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ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

Countries
China Hong Kong Malaysia Japan Taiwan OTHERS TOTAL

Thailand’s Toy Imports by Country (Bt.) 1996 1997 1998 1999

2000

461,079,571 552,002,324 668,656,496 804,290,528 864,847,487 81,290,508 82,768,667 61,252,566 50,969,987 127,413,185 6,292,125 2,428,287 130,202,982 195,053,470 108,051,896 56,893,516 115,320,188 137,285,184 72,613,014 42,612,211 55,924,747 59,718,170 40,365,429 34,734,901 31,441,526 178,893,732 213,071,421 112,597,400 145,472,714 168,939,510 902,594,294 1,027,921,312 1,080,057,359 1,269,840,436 1,382,070,341

Source: Department of Business Economics Major supplier in 2000 was China from which Thai imports were Bt. 864.8 million, or 62.6% of the total toy imports, followed by Hong Kong amounting to Bt. 127.4 million or 9.2%. Among others were Malaysia, Japan and Taiwan with Thai import value of about Bt. 108.1 million, Bt. 56.9 million and Bt. 55.9 million respectively. Imported Items Wheeled toys - Imports of wheeled toys in 2000 were valued at Bt. 22.1 million, up almost eight-fold from 1999, contributed by huge imports of scooters for sales in department stores and other shops. These toys are chiefly imported from China and Taiwan. Thailand’s Imports of Wheeled Toys by Country
Countries
CHINA TAIWAN EU HONG KONG U.S.A. SINGAPORE S. KOREA OTHERS TOTAL

IMPORT VALUE (Thai Bt.)
2539 1,143,914 8,332,167 1,609,168 0 1,079,241 77,013 2,711,274 348,086 15,300,863 2540 838,538 3,069,454 1,195,884 1,305,859 136,815 11,230 1,099,179 1,031,288 8,688,247 2541 559,085 265,808 37,831 0 70,356 0 32,193 1,209,295 2,174,568 2542 742,625 736,977 154,273 4,308 193,862 0 369,605 342,542 2,544,192 2543 11,296,489 10,228,107 370,691 95,671 64,728 44,404 10,135 11,395 22,121,620 2539 45,143 328,815 63,503 0 42,590 3,039 106,996 13,737 603,823

IMPORT VALUE (US Dollars)
2540 26,731 97,847 38,122 41,628 4,361 358 35,039 32,875 276,960 2541 13,514 6,425 914 0 1,701 0 778 29,231 52,564 2542 19,620 19,471 4,076 114 5,122 0 9,765 9,050 67,218 2543 281,287 254,684 9,230 2,382 1,612 1,106 252 284 550,837

Source: Department of Business Economics

Dolls or stuffed toys - Imports of these toys in 2000 totaled Bt. 61.9 million or about US$ 1.5 million, accounting for 4.7% of the total toy imports and jumping 41.5% from the preceding year. These items are mostly imported from China, occupying 78.8% of the total imports of dolls in 2000,

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ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

followed by Indonesia, Taiwan, the EU and South Korea constituting 8.1%, 4.0%, 2.6% and 2.2% respectively. Thailand’s Imports of Dolls by Country
Countries
CHINA INDONESIA TAIWAN EU S. KOREA JAPAN HONG KONG SINGAPORE MALAYSIA U.S.A. OTHERS TOTAL

IMPORT VALUE (Thai Bt.)
2539 32,500,787 5,405 5,654,373 1,672,688 2,066,752 3,888,615 935,836 36,762 246,877 2,324,224 2,064,798 51,397,117 2540 40,132,059 43,516 3,466,891 673,452 1,399,585 4,124,403 2,263,018 19,163 1,256,640 840,344 818,539 55,037,610 2541 24,362,613 561,541 1,852,033 821,069 414,409 881,375 14,203,901 42,058 33,686 88,557 1,400,485 44,661,727 2542 31,954,157 497,352 811,657 295,875 153,127 600,114 1,522,855 12,781 621,309 6,851,598 399,077 43,719,902 2543 48,742,409 5,040,369 2,498,737 1,624,085 1,373,899 612,122 571,742 562,869 464,145 238,540 147,747 61,876,664 2539 1,282,588 213 223,140 66,010 81,561 153,458 36,931 1,451 9,743 91,722 81,484 2,028,300

IMPORT VALUE (US Dollars)
2540 1,279,313 1,387 110,516 21,468 44,615 131,476 72,140 611 40,059 26,788 26,093 1,754,466 2541 588,896 13,574 44,768 19,847 10,017 21,305 343,338 1,017 814 2,141 33,853 1,079,568 2542 844,231 13,140 21,444 7,817 4,046 15,855 40,234 338 16,415 181,020 10,544 1,155,083 2543 1,213,705 125,507 62,220 40,440 34,211 15,242 14,237 14,016 11,557 5,940 3,679 1,540,754

Source: Department of Business Economics

Assembled model sets and other toys - In 2000, imports of models and toys for educational purpose amounted to Bt. 1.298 billion or about US$ 32.3 million, representing 97.8% of the total toy imports, about the same as that in 1999. Thailand’s imports of assembled model sets and other toys by country
Countries
CHINA HONG KONG MALAYSIA JAPAN SWITZERLAND TAIWAN SINGAPORE EU U.S.A. OTHERS TOTAL

IMPORT VALUE (Thai Bt.)
2539 427,434,870 80,354,672 6,045,248 111,431,573 13,417,266 45,731,630 6,118,996 94,248,977 29,485,423 21,627,659 835,896,314

IMPORT VALUE (US Dollars)

2540 2541 2542 2543 2539 2540 2541 2542 2543 511,031,727 643,734,798 771,593,746 804,808,589 16,867,990 16,290,460 15,560,425 20,385,568 20,040,055 79,199,790 47,048,665 49,442,824 126,745,772 3,171,060 2,524,698 1,137,265 1,306,283 3,156,020 1,171,647 130,169,296 194,432,161 107,587,751 238,565 37,349 3,146,466 5,136,913 2,678,978 133,160,781 71,731,639 42,012,097 56,281,394 4,397,457 4,244,845 1,733,905 1,109,963 1,401,429 6,715,711 3,498,552 24,001,683 43,921,107 529,490 214,081 84,567 634,126 1,093,653 33,829,084 32,617,060 29,892,892 43,197,903 1,804,721 1,078,390 788,423 789,773 1,075,645 6,834,939 3,230,176 54,916,295 34,518,005 241,476 217,881 78,080 1,450,893 859,512 138,344,129 63,517,369 26,571,342 32,641,894 3,719,376 4,410,077 1,535,349 702,017 812,796 28,106,944 14,030,190 7,231,814 20,578,432 1,163,592 895,982 339,139 191,065 512,411 25,800,703 23,643,319 23,481,488 27,791,210 853,499 822,464 571,509 620,383 692,012 964,195,455 1,033,221,064 1,223,576,342 1,298,072,057 32,987,226 30,736,227 24,975,128 32,326,984 32,322,511

Source: Department of Business Economics Thailand’s current export condition

11

ฝ่ายวิจัย บรรษัทเงินทุนอุตสาหกรรมแห่งประเทศไทย

ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

The past four to five year statistics show a small increase in Thai toy exports every year, except for 1999 when the exports shrank by about 2.8% or Bt. 247.9 million to Bt. 8.725 billion. In 2000, the exports increased again, to Bt. 9.255 billion, on account of the weak baht. However, in US dollar term, the exports went down continuously between 1996 and 2000, from US$ 310 million to US$ 230 million. The main reason for the Thai export contraction is the competition from China which occupies the world toy market share of over 80% which is likely to expand steadily. Aside from China, other key rivals are South Korea, Taiwan, Hong Kong and Vietnam which is seizing the market share from Thailand. As of the third quarter of 2001, Thailand’s exports were valued at Bt. 7.3 billion, a 8.1% yearon-year increase. The US was still the biggest export market, followed by the EU with main markets in France, the UK and Germany, and Japan coming third. Thailand’s Toy Exports In the Third Quarter Of 2001
COUNTRIES
USA EU JAPAN CANADA HONG KONG KOREA AUSTRALIA TAIWAN SINGAPORE MEXICO SOUTH AFRICA OTHERS TOTAL

TOTAL EXPORT VALUE 2000 2001
2,549,546,987 1,996,456,754 1,115,189,853 191,728,688 64,660,532 77,939,809 103,900,193 48,291,559 37,502,468 63,651,077 44,852,638 479,942,806 6,773,663,364 2,652,467,361 2,183,489,515 1,261,967,194 163,731,818 143,372,638 114,077,328 90,267,317 58,405,766 49,205,258 48,492,304 42,368,681 513,811,247 7,321,656,427

Wheeled Toys Countries Export Value
EU USA AUSTRALIA SAUDI ARABIA NORWAY CANADA JAPAN UAE JORDAN MALAYSIA KOREA OTHERS TOTAL 58,514,937 38,478,800 6,021,771 4,765,667 1,512,811 1,383,144 1,094,923 627,146 610,250 596,948 466,975 4,398,854 118,472,226

Dolls or Stuffed Toys Assembled sets and other toys Countries Export Value Countries Export Value
EU UNITED STATES NORWAY JAPAN SAUDI ARABIA PAKISTAN SINGAPORE HONG KONG CANADA AUSTRALIA ISRAEL OTHERS TOTAL 113,042,119 108,834,858 12,657,982 8,843,215 6,647,944 6,562,238 5,696,962 5,660,473 4,457,467 3,889,976 2,701,862 22,794,043 301,789,139 USA EU JAPAN CANADA HONG KONG KOREA AUSTRALIA MALAYSIA TAIWAN MEXICO SINGAPORE OTHERS TOTAL 2,505,153,703 1,983,862,423 1,252,029,056 157,891,207 137,712,165 113,243,852 80,355,570 63,961,365 55,992,599 48,492,304 43,360,332 459,340,486 6,901,395,062

Source: Department of Business Economics In the first nine months of 2001, the exports of wheeled toys grew about 22% from the same period of 2000, valued at about Bt. 118.5 million, thanks to increased exports to the EU and the US, which ranked first and second. The exports of dolls and stuffed toys posted a 4.1% year-on-year decrease, valued at about Bt$ 301.8 million. Other toys like electric trains, railroads and other parts, assembled models, musical instrument miniatures and toys for intellectual development took over the largest export proportion, altogether worth Bt. 6.9 billion by Q3/2001, up by 8.6% year-on-year. Standards Adopted on Toys 12

ฝ่ายวิจัย บรรษัทเงินทุนอุตสาหกรรมแห่งประเทศไทย

ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

- The American Society for Testing and Materials (ASTM) and the Consumer Product Safety Commission regulate the quality of imported toys and those sold in the US. An example of their regulations is the Potential Hazards of Stuffed Toys which pays attention to components of the stuffed toys such as eyes or other parts that are harmful to the children, etc. - EN-71 is the law concerning safety standards of toys imported to or sold in the EU. This involves safety and prevention of dangers arising from toys such as electricity, sanitation, chemicals and ignition. - Safety Standard Mark (ST Mark) is the certification of toy safety standard adopted by Japan. The Japanese government will pay compensation for the consumers who get injured from toys bearing the ST mark. All toys, particularly those for babies below the age of 18 months, must pass the formalin test under the Food Sanitation Law. - Australia Toy Safety Standard is applied to toys in Australia such as inspection of paints or toxicity of the toys. Such standard is quite similar to the US’s. Problems and Threats A major threat to the Thai toy industry is competition from lower-cost countries in terms of raw materials and wage rates such as China, Indonesia and India. Thailand has less price competitiveness with these rivals. China, in particular, has abundant labor force which gives it a competitive edge in labor-intensive products such as dolls or small plastic toys. China’s lower production cost has prompted several producers to move production base from Thailand to China. Another problem is shortage of skilled labors, especially in designing. The toy production in Thailand is primarily performed based on the standards and designs specified by the brand owners and buyers. This leads to a lack of own design creation or brand building and inability to compete with the European producers which offer a wider diversity of products. In addition, Thailand is falling short of certain raw materials like rubber wood for wooden toy production due to greater exports of rubber wood which has relatively resulted in a smaller amount of wood supply and a higher wood price. Thai exports are also threatened by the rigid product safety standards in such principal markets as the US, the EU and Japan. The EU has adopted the sanitation principles and precaution systems to safeguard their consumers. For instance, toys containing any of the six phthalates, i.e. DINP, DEP, DNOP, DIDP, BBP and DBP, by more than 0.1% are banned since such substances are harmful to health. Therefore, Thai producers must keep up with the movement and trend concerning safety standards of raw materials. 13

ฝ่ายวิจัย บรรษัทเงินทุนอุตสาหกรรมแห่งประเทศไทย

ภาวะธุรกิจและอุตสาหกรรมปี ๒๕๔๓

Conclusion Today, the toy industry, though meant for export orientation, still performs unfavorably in overall export value. Meanwhile, Thai imports of toys are mounting up after a slowdown during the crisis period in 1997-1998. The exports of toys amounted to US$ 230.5 million in 2000, close to those in 1999. As of Q3/2001, they expanded by 8.1% year-on-year, valued at Bt. 7.3 billion. The main drawback to the Thai toy exports is competition from the key rival, China, in the prominent markets such as the US and the EU. With its lower labor cost, China can capture over 80% share in the world toy market. As a result, the share of Thai toys in major markets, particularly for dolls which do not require high skills, has shrunk. Apart from the labor cost, problems also arise from raw materials. Certain materials such as plastic resin and cloth that must be imported are charged with high import tariffs, resulting in increased production costs. In addition, raw material like rubber wood is becoming scarce because it is increasingly exported. On the technical front, Thailand has lagged behind Hong Kong, Japan and the US as it must still rely on technology abroad, thus weakening Thai competitiveness in hightech toy markets. To bolster competitiveness in the toy industry, the Thai toy producers must develop skills and production technique with a focus on quality upgrading, product diversification, and use of modern and sophisticated production technology. More should also be done to create own unique designs, tap new markets to head off the ever-intensifying competition and upgrade the products to the middle and high-end markets to shift away from competition from China and Vietnam in the lowend markets. The producers should rely more on the local raw materials to ease the high costs incurred from imported raw materials and to create value added to the products, e.g. rubber wood used to produce wooden toys. The Thai wooden toys have a bright prospect in the global market and have enjoyed a sharp export growth since they are acceptable for quality, safety and beautiful design. However, as the wooden toys occupy only a small portion of the overall exports, the Thai toy exports on the whole remain bleak.

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