- Letter from CEO
Greetings from Leona 2017Hi everybody. 2017 is almost done. I sincerely hope you all are doing well in every aspect.
For us it has been a rough and bumpy year.
As usual, it is my duty and also my passion to share with you how we did this year:
The 2017 highlights:Under China's new normal, a transformation from an investment- and export-led growth model to one that is driven by consumption and innovation, the traditional Chinese manufacturing industry is facing headwinds. Capital and talents have been diverted elsewhere.
The GREEN POLICIES in China have transcended from rule-building to extensive on-the-ground inspections. Many industries have been troubled because the obvious gap between target and reality is not easy to be filled by the private sector alone. Transitional policies, tolerance period, central-planned hardware (e.g. certified drainage and purification facilities, regulation-compliant science parks,etc.) are essential to the final success. The across-the-board approach of the new policies can be disastrous to these industries! Like the paper industry, supply-driven price hiking blankets the whole market! Under the new policy, supply is curbed and centralized to a few key players. The increasing cost AND short supply have co-existed for over a year.
The good news for China’s toy industry is the easing of the customs procedure with China and some overseas markets, which brings down cost and time. (Remark 1)
Our numbers could not grow in the NON-TRADITIONAL markets. The different price expectations and quality requirements in these markets are still the key obstacles. Of course our stress response is to fight and not flight.
We have not yet finalized our tone on our ECOMMERCE & WEBSITE. The new ECOMMERCE DEPT is searching to find their way. I feel that we will need lots of luck to hit the perfect note. After almost a year, we are still struggling with the major elements of our new website, in order to make it a truly useful device to both customers and ourselves. Hopefully it can be launched before mid-2018.
Our development of "INTELLIGENT" toy products has been much faster, comparatively. Product development/manufacturing is within our comfort zone.
Structurally, we have expanded our ENGINEERING team to prepare for the coming new waves.
The 2018 outlook:Some people challenge the "safety" of INTELLIGENT AND INTERACTIVE TOYS & GAMES. As necessary debugs and utilization testing is the routine of responsible manufacturers, the majority of the products in the market should be reasonably secure and user friendly. While the way of life is changing, toys do help to prepare people for the future world, as they always do. The proper use of this tool should be interesting and not a risk. However, I don’t recommend too much violence and killing in any games. That can sicken minds in the long run.
We have assessed our overall MANUFACTURING COSTS and SUSTAINABILITY thoroughly in 2017. The conclusions are:
- For our FIGURINES production (all materials), we will retain our operations in Southern China.
- The overall HONG KONG and CHINA facilities will be upgraded, whenever appropriate.
- Facilities in VIETNAM will remain under the current status quo.
- Direct investment for further toy business in other countries is unlikely for 2018.
For decades, we were out of the direct RETAIL arena. I have noticed that my Chinese fellows are creating a whole new world over there, proposing a new shopping experience and laying down new rules this time. My big salute to their wits and bravery! However, in spite of the high-speed urbanization in the Mainland, we are not ready for this pie. We have seen a few bloody demonstrations on their Diversification (Diworsification). Curiosity killed the cat. Joint venture projects may be possible if conditions allow.
Lastly, let’s do an interesting survey this time: WHAT ARE YOUR TOYS FOR?
For appearance appeal, comfort, stimulation, inspiration, fashion, sociality, show-off or money-making?
Your answer must be more or less the same as or similar to one of the above, right?
A toy may serve different purposes, depending on your preferences and occasions. It’s very personal, isn’t it?
It is proven that SHARING toys or games cultivates a higher level of mutual understanding, creativity and knowledge transfer than joining a playgroup or going clubbing. Instead of continuously expanding the collection of toys for yourself or your kids, you may consider spending your time TOYING WITH YOUR FAMILY & FRIENDS TOGETHER and enjoy the PROCESS. To me, over-consumerism is never the genuine purpose of toys. The old tradition of passing toys down to siblings or even over generations is a very beautiful thing, if you can appreciate the passion behind it. We all have stories that we want to tell, from the ancient cave paintings to the blogs on modern social media. Next time, you may use a toy to communicate. It can be even more interactive.
I vote to keep TOYS in the world. Let’s use toys to cement relationships and build bonding.
Wish you all a Merry Christmas and a Happy New Year ~~
(Remark 1 : The Sino-American discussion on the tariff issue has not been started at the publishing date of this letter.)