Economy, Business And Markets

Flooded with Chinese products, Iran Toy Sector Limps

Flooded with Chinese products, Iran Toy Sector LimpsFlooded with Chinese products, Iran Toy Sector Limps

Iran’s fairly large toy market is filled with 80% of Chinese products, leaving only 20% for domestic production.

A major problem Iranian toymakers complain about is the fact that there are no major union or association to support the sector.

Currently, entities in charge of toys are Iran Haberdashery Guild and the Institute for the Intellectual Development of Children and Young Adults that supervises both production and imports, the Persian daily Forsat-e Emrooz reported.

Iranian toymakers believe that if import tariffs are raised, importers will be discouraged and Iranian toys can grab 50% of the domestic market share. Yet more than 100 containers of toys enter the country daily and the total amount of tariff they pay amounts to 50 billion rials ($1.5 million at market exchange rate) per day. This, being a source of revenue, renders the government reluctant to change regulations.

Only 10% of the foreign toys found in the market are smuggled and the rest is imported legally. Almost anyone can import toys, which is unheard of in other parts of the world.

“Some 140 toymakers are operating in the country, five brands out of which have the lion’s share of the market,” said Mohammad Saeed Najafi, a toy producer.

Najafi noted that an important factor behind success in this sector is using good quality plastic materials rather than recycled ones.

“The reason for the popularity of foreign toys among our children is due to the electronic technology used in them, enabling the products to talk, play music and perform other actions. In Iran, we don’t have the facilities to add such features to our products since this requires government support and low-interest loans,” he said.

According to Manaf Yahyapour, an official with the Institute for the Intellectual Development of Children and Young Adults, the institute is trying to provide bank facilities to toymakers.

“The bulk of what the institute has done in this regard up to now has been to set up designing festivals, create sales markets, register new designs and put hologram labels on the products to ensure their originality,” he said.

“In ideal situations, only 5,000 items of one model of a toy are produced in Iran. This figure in China amounts to 2 million. So we cannot really say that there is a toy industry in Iran. Industry means vast and professional investments, trained labor force, up-to-date designs, modern production and sales processes; none of which exists in the country,” said Amir Hossein Salamzadeh, another official with the institute.

He also noted that the private sector can be of great help, adding that the field is a profitable one to invest in and that if things go well, there are even hopes of exporting toys to countries such as Turkey.

“Most of the toys in the market are made of secondhand and recycled materials that make them hazardous for children. They are, nevertheless, sold since they are cheap and parents can afford them,” said Ashkan Hayati, sales manager of a company producing magnetic and mind games.

He believes that increasing tariff rates per se will not solve the problem and serious and consistent support to local producers is needed, since production costs are very high and producers are feeling the pressure.

“The field can be very lucrative nonetheless and countries such as China, Taiwan, Italy and Switzerland have made large investments in the field. We should not be absent from the market,” he said.