Vietnam's toy manufacturers, distributors and retailers are thriving amid the economic downturn as the demand for their products just keeps on growing.
Nguyen Thanh Vu, sales manager at wooden toy and children's furniture manufacturer Nam Hoa Corp., said his company's toy exports in the first five months were up 10 percent from the same period last year.
Ho Chi Minh City-based Nam Hoa, whose biggest markets are Japan, the US and the EU, is optimistic of reaching its US$6 million export target for this year, even with the economic contraction.
The target is $1 million more than Nam Hoa's annual export revenue in recent years.
Vu said the target was well within reach, considering the export growth of more than 20 percent in Japan and the EU, and stable revenues from the US in the five-month period.
Pham Thi Phuong Thao, director of Phuong Nga Co. Ltd., which distributes Mattel, Lego and other big-name brands, said that last year Vietnamese toy businesses had forecast a rough year-end holiday season for their industry.
But things had turned out much better than expected and almost all companies had reported good sales, she said.
Her company's sales from January to May were up 15 percent year-on-year.
"Consumers may have to cut their spending but they don't have the heart to take joy away from their children," Thao said.
The growth in the local toy market is in sharp contrast to the global trend. Elsewhere around the world consumers are spending less on toys.
Barbie creator Mattel Inc., the world's largest toymaker, reported in April that its first-quarter net loss had widened to $51 million from $46.6 million a year earlier.
Mattel's closest rival, Hasbro Inc., which makes GI Joe and Transformers toys, said first-quarter profit had dropped 47 percent as consumers cut spending and retailers trimmed inventory, Bloomberg reported.
Retail sales in Vietnam grew 21 percent in the first five months of this year, according to the General Statistics Office in Hanoi.
The economy, on the other hand, expanded by just 3.1 percent in the first quarter, the slowest since at least 1991.
The "astounding" growth in retail sales in Vietnam "shows that consumption remains very strong," Bloomberg reported, citing an April note of HCMC-based fund manager Dragon Capital.
Bui Thi Minh Tu, director of toy distributor Mang Co. Ltd., said the domestic demand for toys remained strong.
Tu said her company, which owns the Toy City store chain, had posted a 20 percent increase in sales in the first five months.
She observed that consumers were tending toward expensive "toy products," especially those that help their children learn as they play.
Many retailers said consumers were willing to pay more for high quality toy products, fearing that cheap ones could be unsafe for their children.
With demand expected to rise this summer and in the year-end sales season, many companies have decided to put their expansion plans into motion.
Nguyen Truong Thanh Nguyen, deputy general director of toy retailer MB Care Group, said his company had recorded 40 percent sales growth in the first five months.
He added that the company would open 15-20 new stores this year in various parts of Vietnam to add to its more than 50 existing outlets under three different franchises.
Mang Co. Ltd. said it would "take its products into" Fahasa, the largest book retailer in HCMC, in an attempt to boost sales.
Vu of Nam Hoa Corporation said that, after a long time focusing on exports only, his company had realized there was a promising market at home, and had signed up Mang Co. Ltd. as its domestic distributor.