Mattel reworks China strategy amid elusive growth

Dhaka,  Tue,  25 July 2017
Published : 11 Mar 2017, 17:50:20
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Mattel reworks China strategy amid elusive growth

Mattel reworks China strategy amid elusive growth
Mattel Inc is doubling down to corner a bigger share of China's fragmented yet lucrative toy market, but the success of its efforts hinges on its ability to navigate strict regulation and adapt to local preferences, reports Reuters.

The maker of Barbie dolls struck deals with Chinese e-commerce giant Alibaba Group Holding Ltd and online content developer BabyTree last month to sell interactive learning products based on its Fisher-Price toys.

The deals mark a shift for Mattel, which has built its business selling Barbie and Ken dolls in brick-and-mortar stores, and highlight the pressures US firms face as they try to expand in new markets with sales stagnating back home.

Alibaba's reach and China's preoccupation with education could give Mattel the thrust it needs to win over the country's so-called "tiger mothers", who aggressively push their children to be the best in school.

"Chinese parents tend to buy more educational toys, science kits and learning toys than all their counterparts in America and Europe," said Shaun Rein, managing director of China Market Research Group.

While Mattel has garnered a nearly two per cent share of the estimated $31.5 billion toys and games market in China, it has been unable to replicate the success it has enjoyed in the United States.

The company's inability to gain a firmer foothold in the Chinese market is in contrast to the brisk pace of growth in the country's toy market since 2010.

China's toys and games sector expanded about 10 per cent between 2010 and 2015, compared with a meagre 1.7 per cent increase in the United States, according to market research firm Euromonitor.

Market leader Guangdong Alpha Animation & Culture Co Ltd held 4.4 per cent of the market in 2015, while Danish toymaker Lego commands a 2.8 per cent share.

 
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