Cheers for all Seasons

This is the season of gift-giving. The tell-tale chill in the air teams up with the burst of exciting color all around in making every-one feel young and think of gifts. Shoppers take a beeline to the malls and flea markets to get ahead of others on choice buys and to head off the panic and the traffic as Christmas day nears. Gift-giving gives a lift to the heart.

And speaking of gifts, nothing stops the imagination, the form, the price, or the whim, in making a choice – especially when this is tinged with romance. It can start with the moon, take the form of a castle, a condo unit, an expensive car, haute lingerie, signature jewelry and scents, or it may come unexpectedly as an all-paid holiday cruise, electronic gadgets, a year-round subscription to a fond read – or end up as a simple but dear thought written by hand in a card.

But between the improbable and the simple is a whole forest of traditional items and novelties, even non-traditional types turned as gifts, through which one has to wade to get a choice and fond item expected to draw instantaneous or staying cheer, surprise, excitement, recall, or plain human gladness in the receiver. The variety and the burgeoning demand for gifts, toys, novelties and products used as such have grown so in the present time that the craft of making them has ballooned into a sizeable and highly competitive global industry.

Gift-giving takes a high note in Christmas, a time when youngsters – and toys – take center stage. One easily conjures the image of Santa Claus off on his night forays in the magical December sky with a hefty carry-all full of gifts for kids, an avalanche of toys cascading in the wash of his passing sleigh. Toys galore – in a kaleidoscope of colors and sizes, each a warren of design and wizardry, all loosening a reservoir of cheer and excitement as only the young know and adults wish to recall.

In the rush and the excitement, the thought does not occur to ask how toys, gifts, novelties and other interesting items ever get to the display shelves.

Making toys happens to be a serious business, quite far from the light-heartedness and youth they generate in the heart. Their designs appear whimsical, and the craftmanship may look simple, but it had to take a plant visit and a talk with a toymaker to get to know how they come to be, how long it takes to make one – which means just one kind.

The search takes one to a government agency, the Department of Trade & Industry, and to one of its operating units, the one handling toys and dolls, to get information to start with. One gets a list of names of toymakers, preferring one within a day’s travel, and goes to the phone.

Pressed for product photos, and not about to engage a photographer, this writer was in luck to chance upon one who sounded hearty in person and buoyant about the business. Lorna Redempta Kalaw is the woman behind Lokal Industries, and operates a plant on Dagat-dagatan Avenue, in Malabon. She is also the incumbent vice-president for external affairs of Philtoy, the umbrella organization of Philippine toy manufacturers.

There are about 117 firms listed as engaged in making toys, dolls and novelties. They operate mostly within the Metro Manila area and the metropolitan periphery. Others are in Tarlac, Angeles City, Bulacan, Cavite, Laguna, Cebu, Negros Occidental. Most are small and medium-sized cottage industry types, with from 50-100 workers per firm. Many started as self-funded homelot cottage activity, but a few have grown, having been pumped by foreign investments, notably from Taiwan and Italy.

It is not known to many but the Philippines has had a mark of distinction in this global industry sector, earning the tag of “Italy of Asia” for the attractiveness of local products and creativity of its designs.

Toys, which generally are designed as human, animal, and non-human figures, and other gadgets, are of three types: stuffed or plushed, wooden, and plastic. Stuffed toys are mainly made of cloth and fabrics. Wooden toys are made of mahogany or of softwood like almaciga, palosapis, palochina, malacauayan, or plywood. Plastic toys come from high-impact polyester, polypropylene and ABS resin, which are heated to soften, colored, and passed through an injection molding machine, then through a welding machine, and then cooled.

With the baby boom unabating, especially in Asia, global demand for toys has continually grown. In a five-year span, it has grown from US$10.8 billion in 1991 to US$18.2 billion in 1995 – and still rising. The biggest export player through the period has been China, bagging 61% of the pie, with Hongkong and Italy a poor second, with 4.36% and 2.98%, respectively, followed by Germany with 2.91%, and Taiwan with 2.83%. The Philippines ranked only 27th, with an export total of US$42.01 million, accounting for 0.23% of the total global trade in 1995.

Performance of local products, covering 24 top of the line items, peaked the year following, with a total export of US$42.8 million in 1996, only to decline a bit to US$41.8 million in 1997. From there it continually slid to US$32.3 million in 1998, US$27.5 million in 1999, US$24.6 million in 2000, and to the US$17.8 million (as of August 2001) in the current year.

The export pinch has deflated local toymakers, affecting the country’s over-all performance, stressing stiff regional competition as the monkey, one of many, on their backs. China tops as the monkey wrench, followed by Hongkong, Korea, Taiwan, and Vietnam.

Not all the local toymakers and gift creators are fazed by the prospect, least among them Lorna Kalaw, who has orders from as far as China itself. Also, other lines have sprouted from the native creativity of Filipino craftsmen, successfully penetrating foreign markets and becoming promising subsectors, among them parlor game gadgets and puzzles, musical instruments, scale model assembly kits, doll accessories, and others.

Ms. Kalaw showed me designs she said she had submitted to her contact in Hongkong, and laid out how a toy gets on the market. “After an order to buy is received, we have to submit a design, which must be approved by the buyer. When approved, we procure the raw materials, most of which are imported items, the rest available locally. Then, we start making the toys and, when due, send the order over to the buyer, and get paid.”

She said Lokal has only 15 regular workers, and, when big orders are landed, they have on call workers contracted on per-piece basis. Since her company specializes in stuffed toys, it uses only sewing machines. In fact, she said she started the business 13 years ago as a sub-contractor. It was the time when she had just married a scion of the prestigious Kalaw line and stayed home most of the time. Her family being in the textile and garment business, she thought stuffed toys would be best for her. She has not looked back or sideways since then.

With the export market bleak, Ms. Kalaw has worked the domestic market. Her stuffed toys have recently found their way to local international food chains as promotional items. The domestic market is sizeable, she said, and “it has sustained my business through the present global recession.”

Among the Philippines’ top toy and novelty export items include educational, collector and gift items, embroidered products, games for children, Easter novelties, dolls and doll dresses and accessories, toy baskets, Christmas decors.

One Philtoy member company, Tinkerbell, was exclusive manufacturer for Wallace Berrie and Co. for three years. Tinkerbell was one source of supply of the Smurf characters that made Wallace Berrie world famous. It also served the CAM Toys of Italy, license holder of Walt Disney characters.

Also, in terms of revenue performance, while in 1999 and 2000 traditional exports registered negative growth rates of 24.45% and 33.17%, the new designs and industry subsectors mentioned earlier registered a phenomenal performance of 3,000% from musical instruments and children wheeled toys, 878% from puzzles, 282% from doll accessories, and 141% from scale model assembly kits.

With such beachheads and winners on its cap, the “Italy of Asia” is not without its cards. Designing and artistry still tilt the balance to its favor, even with the entry of high-profile toys and items. One weak area is source of raw materials, but moves are being made to promote the entry of firms engaged in the manufacture of plush, stuffing materials, adhesives, glitters, and other items used by this sector.

In the business of gifts, toys and novelties what is crucial is fine grasp of the consumers’ tastes and sensitivity to market need. Color favorites, material preferences along with trends in design have to be closely watched by producers to stay with competition. After all, the buying decision of consumers is based on any or combination of these factors. The product appeal can influence the emotion of buyers. That in the final analysis, is what closes a commercial deal.

by: Tony Calsado