Toys R Us, the largest toy retailer in the world, gears up in August, quickening up its step in China. It opens stores in Chongqing, Shanghai and Shenzen in succession, expanding its network from East to Southwest and South of China.

 

In addition, King Jouet, renowned toy retailing chain in France, is ambitious to explore domestic market as well. As increasingly more retailing giants tap into domestic China, balance of original market structure would be broken when all power groups are seeking for new marketing chance. It can be anticipated that, domestic channel for toy retailing will receive a new revolution.

 

At the end of 2006, with years of experience in global market, US toy giant Toys R Us enter domestic China with high profile, attracting widely concern in the trade. The first store is situated at Zhengda Plaza, Lujiazui, Shanghai, where over 7,000 kinds of toys are sold. It rises as the biggest toy store at one stroke. Moreover, its creative in-store arrangement and operation pattern have arrested a great number of consumers.

 

One years of trial business, TRU opens its stores in Nanjing Store, Hangzhou Store, Daning Plaza Store in Shanghai, Wuxi Store, Chongqing Store, Zhongshan Park Store in Shanghai and Shenzhen Store in succession. Totally 8 stores had been opened by the end of August, each of which covers a large area of over 1,000 square meters. All of them are situated at the busiest region in urban cities.

 

At the second half of 2007, with a history of over 50 years, well known French toy retailer King Jouet said an agreement with Carrefour, opened its chain stores with a wet finger and rapidly expand. Up to now, King Jouet has run 7 stores in China, located in Shanghai, Beijing, Shenzhen and Dongguan.

 

Generally, these stores are opened at the first floor in Carrefour, covering an area of around 600 square meters. Leading brands in toy industry are available, coming with abundant categories. The most impressive thing is that, the store pay extreme emphasize on minutia. Products are always displayed in creative way, offering fresh visual experience to consumers. Particularly for brand boutique, store director and sales staff will always make painstaking effort to figure out best demonstration method.

 

After tapping into China’s domestic market, TRU and King Jouet have been very ambitious in the schedule of setting 10 new stores in each year. They coincide with each other upon the focus on Pearl River Delta according to business expansion plan in 2008. Global brands entering retailing market would bring new opportunity to some people in the trade, but at the same time, some might get into a flap. However, affected by high inflation and depression of consumption as well as toy market, the two giants’ development has to be postponed.

 

 

According to their development strategy, TRU and King Jouet choose highly developed business urban regions. Furthermore, they adopt the mid- and high- grade of consumption. Such an attempt has constituted great pressures on toy sectors in department stores.

 

Before TRU emerged, Shanghai The First Yaohan was the largest brand toy store that coming with greatest turnover and popularity. However, after TRU opened its flagship store in Zhengda Plaza, shopper’s traffic and sales volume began to decline remarkably.

 

Mr. Wu, director for stationery and toy sector told TOY INDUSTRY that, area for toy sector in the store has been decreased in lately two years and the emptied-out space has been reallocated for other kids’ articles that see higher profit margin, such as shoes and apparel.

 

It is known that, it is not the only case. As retailing terminal is taking change silently, toy sectors in stores in large and medium municipalities like Beijing and Shanghai continue to see lessen sales area with each passing years.

 

Toy dealers are greatly impressed as well. A dealer told TOY INDSRY that, global chain brands like TRU will see around 50 percent of products that are original brands, which are designed, produced and sold exclusively. The left is directly introduced from makers. These chains are extremely strict with brand and quality of toys. It is hard for dealers to butt in. moreover, department stores always have its exam on sales index according to unit sales area (m²). When one fails in exam, he has to decrease the sales area or even quit. In view of this, “we are seeking survival in crack,” the dealer described.

 

In such a keen competitive environment, would toy sectors in department stores vanish in some day? Personnel in the trade do not think so. As a traditional category in department store, toy sector will survive and continue to develop. However, the weaker one will be eliminated undoubtedly. It is expected that, relationship between department store and vendors can be adjusted, so as to reduce the burden in various item of fee and gain mutual benefit.

 

Compared with department stores, supermarket that engaged in toy sales has been grown in fewer years. Only from 5 or 6 years ago, such a channel has emerged. As global supermarket like Wal-Mart, Carrefour, Jusco, Trust-Mart and Lotus enter China’s market in succession and expand rapidly, chain markets have accumulated greater power and imposed greater influence upon toy industry. Characterized by quick turnover and large sales volume, they allow no neglect.

 

However, high entrance price, holiday sponsor fee and promotion expense and high wastage rate make the channel both the favorite and hate of vendors.

 

It is said that, when there are increasingly more kinds of sales channel, supermarket appear to be a toughness selling place for vendor.

 

Some one has a vivid comparison. TRU and King Jouet have thrown a stone on peaceful lake, arousing lipper around. In the region where these chain stores are opened, dealers are exactly at the center of lipper, imposed by great impact.

 

“Unlike big city, in small one like ours, it would be a bad thing. There are only a small number of toy stores. First Yaohan’s Wuxi store is one among them. Now TRU opens in the place just opposite to it and sells products that are available in First Yaohan. Moreover, it has discount on RRP and also see exclusive toys that even professional dealers like us have not seen before. Consumers would be interested certainly. How can we win the battle? ” a dealer signed at the status quo.

 

Currently, many toy makers are actively open their direct sales brand specialty, which come forth in first-line municipalities like Beijing and Shanghai. These specialties always see a large area of 100 square meters, displaying dynamic and flexible operation pattern.

 

I believe that, the most important thing for establishing specialty business should be the choosing location. Even when it comes with high rent, it will finally be worth the payment, since the location determines that whether the opening of store is successful or not. At present, there is still a vast difference on consumption consciousness between China’s consumers with foreigners. Therefore, domestic market explorer should be cautious enough.