Industry profiles - introduction

Hong Kong produces a wide range of toys with particular strength in plastic toys, including dolls, doll houses and other accessories, action figures, construction sets, toy guns, make believe toys and gimmicks such as beauty kits and doctor's kits. Other major categories are electronic toys and games, radio/remote controlled toys, battery-operated toys and metal toys. Taken together with re-exports, Hong Kong is the world's largest toy exporter.

Hong Kong is famous for producing high-quality toys, and a large share of industry revenues is derived from contract manufacturing for overseas manufacturers and license holders. Production on the Chinese mainland has enhanced the price competitiveness of Hong Kong exports. Hong Kong's role is shifting towards quality control, management, marketing, product design and production planning.

Competition has remained keen, especially from indigenous Chinese enterprises in open items. Orders received are getting smaller in terms of lot size while shorter delivery lead time is generally required. Merging activities of overseas toy companies may further raise their bargaining power in sourcing, thus depressing toy makers' profit margins. Product safety and ethical sourcing are increasingly a concern among overseas buyers.

Computer and video game interactive entertainment is expected to continue to be a major growth area, while technology allows the development of "smart toys". With the popularity of the cyber world, linking toys with the Internet is another new development. The trend of mass customization gives the toys and customers a sense of uniqueness.