Park Toy (Thailand) has recently suffered sharp falls in its annuai after once enjoying sales of US 6 million a years.
The toy manufacturer, which is owned by Korean businessman Young Tae Park, has been in business in Thailand for 17 years and focuses mainly on exports to the US and European countries. But like other exporters, it has faced tough price competition following China’s entry into its markets, Some toymakers are even seeing dim business prospects ahead in Asian markets.
However, Parks Toy is trying hard to turn a crisis to an opportunity. It sees some lights of opportunity still burning in the Us and European markets and is undergoing a change in business strategies.
Among other things, it has declared “pay-back” time for its Chinese competitors. It has developed a new brand of Grade A toys called “Anee Park” and is selling them in China.
“before we can fix the problem, we have to know its roots,” Park explains.
Chinese manufacturers enjoy a big advantage because of low labor costs. Although the cost of labor in china is rising slightly, Park believes Thailand’s labor costs are still acceptable, the problem is that workers here do not work to their full capacity, he says, especially during long holidays, when many are absent.
“our labor problem is that we can use only 70 percent of work capacity. This has a 20 major effect on the business because we are unable to manufacture in time to meet orders.”
Low labor costs aside, China also has its own raw materials. While Thailand still needs to import them from Korea. Some Thai toy manufacturers recently tried to source their materials locally, but found suppliers were incapable of meeting demand.
As a result, low labor costs and locally sourced material are the two main factors enabling Chinese manufacturers to produce toys at half the price of their Thai counterparts.
Park Toy pondered what its advantage might be and it concluded that they were quality, design and after – sales service. And these things , should be enough to create business opportunities.