Toy maker shares the successes and challenges of trading in China
Archant Norfolk 2018
While countries including the US are quibbling with China over trade, one Norfolk toy maker is having unprecedented success in Asia's biggest market.
Orchard Toys secured a deal with a Chinese distributor last year to start stocking some of its 140 products in the country and set out a three-year growth plan.
But just 12 months in, the Wymondham firm has already exceeded its targets. China is now its biggest export market, overtaking the previous title-holder Australia, and revenue from the country is well into six digits.
Managing director Simon Newbery said Orchard Toys had been trying to break into China “for a number of years” before it finally secured a distributor.
“We laid out a three-year success plan which was smashed in year one,” he said.
“We are now in year two and a member of staff is going out to a toy fair in Shanghai next month and we are going to have a large stand there.”
Trading in China has required few alterations to its games – translated instructions are included with each product but the British branding is retained.
Mr Newbery said the picture-led nature of the games meant most were well-suited for international sales. “Some markets are more sensitive to translation than others but with China it is the fact that they are British products that they absolutely buy in to.”
He added: “Chinese consumers are very keen to have quality British toys, we have gone quickly from not being known at all to being well known out there.
“We said we could localise the products if the distributor wanted, but they wanted the authentic British product.”
He said Chinese consumers even have a similar taste in games to those in the UK, with its top sellers broadly similar in both countries.
Orchard Toys’ next target is the US – it already has a presence in the country and the team attended their first American trade show in New York last year, with plans to go again in 2019, but Mr Newbery feels the business has not yet reached its potential stateside.
The firm, which employs about 65 people, expects to make around 2.7 million products this year, up from two million in 2017.
All products are designed and packaged at its factory on Wymondham Business Park, with printing done by companies near its former home in the Midlands.
While selling in China has been a primarily positive experience for Orchard Toys, the company is facing problems with intellectual property (IP).
As rules around IP are more lax in China, the firm has had to confront several companies which have copied its products and designs.
While it is difficult to police IP misuse in individual stores, managing director Simon Newbery said the company has employed someone to find and tackle unauthorised uses of its IP by online retailers.
He said some Chinese companies “do not see a problem” in using others’ IP.
“In the first year it was not so much of a focus for us but it will be in the second year,” he said.
“It is an issue across the toy industry. China is trying to be better but they are lagging behind where we are.
“We have worked hard to build up a brand so we are not terribly keen to see other people making money off our efforts.”
This year has also seen Orchard Toys start a partnership with Norfolk Industries for Disabled People.
The business, led by Independence Matters, offers jobs and volunteering opportunities for people who struggle in ordinary working environments such as those with learning difficulties or mental health problems.
Orchard Toys began outsourcing some of its packing work to the company in January.
Sharon Tooke, service manager at Norfolk Industries, says the work is now almost constant with up to six staff and volunteers packing some 5,000 Orchard products every week – adding 10% to the number of products packed by its in-house team.
Orchard Toys managing director Simon Newbery said: “There was a need on both sides and it has clicked into place. In terms of the quality that has come back, I don’t think we have had any areas of complaint at all.”