Latest News

Even with a Chinese obstacle, toys sales rise


[6/7/2011 12:33:52]

Companies try to overcome unfair market competition established by China, by reducing prices and offering a wide range of products to its clients.

After years of crisis and after a hard struggle against Chinese imports, Toy Industries are finally achieving market stability again. According to Synésio Batista da Costa, the president of ABRINQ (“Associação Brasileira dos Fabricantes de Brinquedos”), this segment is expected to increase its sales 15% more in 2011 than it did last year – in 2010, R$ 3,1 billion in revenue. The same percentage of increasing is expected to the resumption of the market share in order to better deal with this troublesome situation caused by the Chinese.

China is still the country which causes several problems to most of Brazilian manufacturers. Nowadays, the Brazilian market is divided between 55% share of local industry and 45% of Chinese manufacturing. “We’ve been attempting to regain market shares in the last three years. However, it is a situation difficult to revert. We have to face Chinese industries the best way possible if we really want to reach our aims”, unburdens Da Costa.

Taxation

The fierce competition is the result of Brazil’s economic plans and a partnership with China, resulting in a collaborative effort. One example is the reduction in import duties, which happened a decade ago. Brazil’s tax reality not only allows importers to have almost 50% of advantage in the Currency Exchange which the local industry does not have, but also allows them to have 15% of advantage in their landing in dry ports of the whole country. Besides, those who work in Brazilian companies are obligated to pay an interest rate of 3.5% per month. At the same time, competitors pay only 2.9% per year, which represents an abysmal difference between both rates. “As if it was not enough, Brazil gives importers customs of which the government has no control of. And this, results in an underpricing of 40% in our normal operation… I’d better stop talking about this now to not start talking about tax evasion and other issues”, warns the president of ABRINQ, referring to the contrabands. In the end, imported toys are continuing being sold at a lower price – an aspect that is decisive and crucial to the consumers. Part of Brazilian’s market gain has only occurred because of the country’s attempts to popularize the toys.

Not only in this year but also in the last one, Brazilian toy industries managed to reduce the prices of all products and due to that, they sold almost 70% of the toys in the whole country for R$50,00 at maximum. However, this is not the only strategy used by Brazilians.

The aim now is to invest more than R$200 million in companies’ modernization and in their development in order to make them able to produce state-of-the-art toys that will probably call the attention of many consumers.

Synésio Batista
President of ABRINQ
Source of the original text (in Portuguese): www.abrinq.com.br