For Baiju Town The Home Of Toys, How to transform and upgrade ?
Trouble of Industrial Upgrading for Baiju Town the Home of Toys
When the car traveled to the town centre of Baiju, there were a number of toy enterprises’ factories on both sides of the road appearing one after another. Although it was September, the Christmas spirit was in the air as workers were sewing Father Christmas plush toys in advance of the large volume of toys needed to meet foreign Christmas demand.
Located in the southwest of Dafeng District, Yancheng, Jiangsu Province, Baiju Town, with a total population of 41,000, is one of the top 100 towns in Jiangsu in terms of comprehensive economic strength and has a reputation as a meeting point and the home of toys.
The title of “Toy Township” is not a vain name, official data show that Baiju Town has more than 120 toy enterprises, employing more than 20,000 people, products are exported to more than 20 countries and regions around the world, with annual sales of more than 1.5 billion yuan, was awarded by the Commerce Department of Jiangsu Province as “Jiangsu Province Toy Export Base”, becoming the new toy manufacturing center.
In the 1970s, two workers from Wuxi City, Jiangsu Province, came to Baiju Town, Dafeng District, Yancheng City, Jiangsu Province, and set up a plastic toy factory, the predecessor of the Toy General Factory. 1988 to 1993, the Toy General Factory gradually evolved into more than ten private enterprises, and to date, Baiju Town has eight large-scale toy enterprises with annual sales of more than 20 million yuan, and more than 500 processing points of various sizes.
Back then, Baiju Town had a large amount of idle labour, which was very much in line with the development needs of the labour-intensive industry of plush toys, and with the advantage of human resources, the present toy industry cluster was formed. The toy industry has developed in Baiju town for over 40 years and has become a local pillar industry.
Compared to agriculture and heavy industry, home textiles are similar to light industry and are more likely to drive the local economy. Based on the mature industrial chain of the Yangtze River Delta generation and the location advantage of Dafeng Port, it facilitates the export of toys from Baiju Town.
Ltd. (hereinafter referred to as “Yitong toys”), Li Shenghua, chairman of the board, Baiju Town, Yancheng Sugito Toys Co. Ltd. and Dafeng Hongda Toys Co., Ltd. are basically export-oriented. His Yitong toys can achieve 100% export, of which 70% are exported by themselves and 30% through foreign trade companies.
Severe ageing of the workforce
The village of Lion’s Mouth, where Kaile Toys is located, is the very place where the Red Legend took place.
On 10 October 1940, Comrades Chen Yi and Su Yu led the New Fourth Army, which swung northwards, and the Eighth Route Army, led southwards by Comrade Huang Kecheng, to a victorious rendezvous at Shishikou Village. The village of Shishikou was a major local transport route and belonged to the town centre. It was also a village with a high distribution of toy factories and processing points in Baiju Town, with a concentrated population living in the area and a high number of toy factories.
At the beginning of the reform and opening up, the toy industry was able to take root in Baiju Town and develop mainly under the influence of national policies. Experienced and skilled people chose to set up enterprises, and the whole toy industry began to fracture from then on, developing from five or six to more than twenty, then forty or fifty. The Dafeng district government and town government have supported the development of all aspects of the toy industry and correctly guided the development of toy enterprises.
Li Shenghua, who comes from a design background, still remembers that in 2001, when he attended a large trade fair in Guangzhou, he touched the current trend and immediately drew up a design, and within three days, the factory produced a sample, which allowed him to receive an export order of US$150,000 at once.
Due to the plush toy processing work threshold is not high, quick to get started, and labor-intensive work has a great demand for labor, even the local 70-year-old people also joined the toy processing queue. According to local government staff, the total population of Baiku town is currently 41,000, with more than half of the adults, about 12,000 people working in plush toys, is a veritable “toy township” Baiku town
The income generated by toys has become one of the main sources of income not only for Baiku township but also for households. As a result, the per capita income of the whole township ranks among the highest in the Dafeng District.
The new factory building built by Li Shenghua in recent years was officially put into use. The first financial reporter saw at the factory site that, in addition to the material room, production room, packaging room and distribution room being managed in an orderly manner, Yitong Toys also set up a children’s experience area and a toy exhibition area in an important area of the office building.
Over the years of his career, he has watched the plush toy industry develop and grow in the region, and he has also felt deeply the boost in economic income that toys have brought to local people. Li Shenghua provided a set of data to the first financial reporter, in 1996, the per capita salary of the whole factory was US$282 to US$314 per month, rising to about US$550 in 2008, and adjusted to US$566~US$597 in 2013 and 2014. The current per capita wage is about US$660.
According to local media reports, more than 40 farmers from the community have found jobs at Jiacheng Toys in Baiku Township, which is located near the Majia community, with an average monthly salary of US$628. Relying on the work at the toy factory, some villagers who were impoverished due to illness have even regained their income and are living in new houses.
Kaile Toys is a large local toy enterprise, the company chairman Zong Shengwang said that 80% of the company’s employees are local villagers, not only to drive the village villagers employment, but also attracted villagers from other villages to their place.
However, the lack of a young workforce is still one of the pressing issues that needs to be addressed. The proportion of employees aged between 45 and 50 years old is nearly 17%, while those aged below 40 years old account for 5.38%. The largest proportion is still between 50 and 60 years old, accounting for 50.54% of the total number of employees. Li Shenghua believes that although this part of the population is highly motivated, but because automation in plush toy production has always been a difficult point in the industry, so there is still a need for a younger workforce to supplement in.
Although the threshold for toy processing work is low, the work is more strenuous. Zong Shengwang told the First Financial Reporter that, in addition to the normal hourly rate, employees are provided with appropriate incentives and subsidies. On balance, US$628 per month for a regular employee is the basic level, which is higher than the average local income level. The development of the toy industry in Baiju town has helped to raise the income of the people. Both men and women, young and old, can use it as a side business in their spare time.
Baiju Town the Home of Toys: Avoid Price Passivity by Innovation
Since 2013, Yitong Toys has started to focus on the infant market from 0 to 6 years old. In the display area, the reporter saw that Yitong toys new baby soft rubber toys in a wide range of styles, there are some incorporating technological elements, according to the introduction of small pillows and small blankets for infants and toddlers have also become a hot selling varieties. Li Shenghua believes that after the expansion of production capacity, the number of staff is not enough, the enterprise will adjust accordingly to promote diversification by increasing the added value of products. For example, making plush toys more technological and adding more functions.
In recent years, in the face of changes in productivity, sales channels and product innovation, entrepreneurs in the local toy industry have been thinking most about “the way forward for toy production”.
The toy market has always been extremely reactive in terms of price system adjustments. Li Shenghua recalls two important points in time that have had a considerable impact on prices in the plush toy market. 2007, the year of greatest change, saw a surge in orders and an increase in plush toy prices; 2021, after an explosion in production, will bring another price change, he believes.
Li Shenghua revealed that Yitong Toys’ revenue in 2019 will be US$7.85 million; in 2020, affected by the epidemic, revenue will be US$5.5 million; revenue in 2021 is expected to exceed that of 2019, and the company is expected to exceed 100 million yuan in revenue in 2022.
As more than 70% of the business is exported and settled in US dollars, Li Shenghua keeps an eye on changes in the exchange rate as it directly affects changes in the revenue of the business. In times of high volatility, losses exceed US$160,000.
The development and progress of enterprises cannot be achieved without the support of the local external environment. Zong Shengwang mentions that government guidance coupled with close contact from various enterprises has led to a joint study of the master plan for the development of the toy industry, with more emphasis on the cluster advantages of the toy industry. Baiju Town also hopes to develop the toy industry into a complete industrial chain with everything from fabric manufacturing to the production, design and sales of toys.
In order to create a better brand influence, Kaile Toys has set up a company in the United States to develop the “Baiju” brand of plush toys. In the ground floor exhibition area of the Kaile Toys factory, this reporter not only experienced the history of the toy factory’s development in the region, but also saw a number of toy products produced by leading companies. Due to the cooperation with Universal Studios, the ground floor exhibition area of Kaile Toys displayed more toys with IPs, such as Little Yellow Man and Teddy Bear.
Whether it is the local government or the companies themselves, the participants in the toy industry form a cohesive force that brings life to the local economy.
In addition to developing channels, Zong Shengwang also plans to make his own innovative brand, in his view, design is as important as sales. During the local collaborative discussions, entrepreneurs began to find their own characteristics, to differentiate themselves and then to create a brand, so that Baiju, the “township of toys”, could provide more jobs for local people and attract more talented young people to work and live in Baiju.
On August 11, according to local media reports, Baiju town is taking a number of initiatives to strengthen the foundation of financial and tax revenue, which mentioned that the transformation and upgrading of traditional industries such as toys and machinery, to create a full industrial chain ecosystem and promote the development of industrial integration. The company’s main goal is to provide the best possible service to its customers.
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