Toymakers in Chenghai bank on IP from growth

Toy businesses in the Chenghai district of Shantou, Guangdong province, are ramping up efforts to tap more consumers, with a focus on intellectual property protection.

Home to more than 50,000 toy businesses, Chenghai produces nearly half of China's plastic toys, generating over three-quarters of the district's total industrial output. Toy exports account for 20 percent of the city's total, according to local government.

In Chenghai, tailor-made measures in securing licenses of world-renowned IPs and nurturing its own IPs for its toymaking sector have borne fruit. The district ranks top among its peers in obtaining IP licenses, with more than 10,000 toy-related patent authorizations clinched annually in recent years.

For example, in 2019, building blocks major Sembo obtained the rights to make toys based on the blockbuster Chinese sci-fi film The Wandering Earth.

Products inspired by the movie have been one of the company's best-sellers, generating more than 100 million yuan ($14 million) in annual sales, said Lin Zezhe, co-founder of the company.

Guangdong Qunyu Interactive Technology also draws inspiration from traditional cultural IPs, using robotic technology to develop building block toys that can perform the Yingge dance, a national intangible cultural heritage.

"We're trying to inject more technology and cultural elements into toys to fuel the industry's smart transition," said CEO Chen Ruifeng.

Alpha Group, listed on the Shenzhen Stock Exchange, has cooperated with IP owners in film, stationery and gaming. The company teamed up with a South Korean entertainment firm and launched preschool animated series Super Wings in 2015. Its Super Wings-themed products, including toys, have thus far raked in $2 billion in sales worldwide, Alpha said.

"The success of a toy product is moving beyond its reliance on appearance or craftsmanship — it must be imbued with cultural connotations," said Yang Wenshuo, administrative manager at Alpha's manufacturing center.

Many of the world's leading toy companies are also IP powerhouses. Mattel's CEO Ynon Kreiz has doubled down on transforming the company into an "IP-driven toy company" since taking office in 2018. Bandai Namco, the seventh-largest toy company globally and owner of the One Piece, launched its "IP axis strategy" in 2010, viewing it as its "greatest strength".

Chenghai's supportive move is in line with the global trend, as its planners recognized that toymaking businesses should adapt to changes in leveraging IP.

Currently, local toy companies in Chenghai with annual revenue each exceeding 20 million yuan make up less than 2 percent of the total. To enlarge the group, the government announced a plan in 2023 to support local enterprises in developing a global edge, with a focus on big-name IP cultivation.

irisli@chinadailyhk.com