Toy giant Mattel seeks major opportunities in the mainland

Updated 2017-02-17 10:30:51 China Daily
A girl plays with toys at a store in Beijing.

A girl plays with toys at a store in Beijing.

It's been a busy week for US toymaker Mattel.

On Tuesday, the California company announced a strategic partnership with Alibaba Group Holdings Ltd to develop products for Chinese e-commerce site Tmall.com.

Mattel also announced that one of its companies, popular doll maker American Girl, would add a boy doll, a drummer named Logan Everett, to its lineup.

Mattel will market and sell to China via Alibaba's business-to-consumer marketplace Tmall.com.

But it also said in a statement it would be "leveraging the company's media ecosystem to develop and promote learning resources and educational content-inspired by Mattel's beloved brands and characters-to help parents and families get the most out of play".

Mattel will in addition work with Alibaba's artificial intelligence lab to develop products designed to aid child development through the use of technology and interactive learning.

"Play has a tremendous impact on a child's cognitive, social and emotional growth," said Margo Georgiadis, a former Google executive who took over as Mattel CEO on Feb 8.

"By combining Mattel's unmatched expertise in childhood learning and development with Alibaba's immense reach and unique consumer insights, our goal is to help parents in China raise children to be their personal best," she added.

Daniel Zhang, Alibaba CEO, said the company looked forward to "supporting Mattel's growth through our robust data and commerce technology infrastructure, which will help to elevate their overall business from product development to brand-building to rural penetration for this unique and massive market".

Georgiadis added that the multibillion dollar toy category in China is highly fragmented, with tremendous potential for growth. Working with Alibaba, we see a terrific opportunity to develop and lead the category.

Mainland parents buy fewer toys for their children compared with parents in some other countries, according to Patty Wu, Mattel's vice-president of China Growth, in an article on Alizila.com, a website for Alibaba news.

Wu said many parents believed idle play distracted them from homework and hurt academic performance.

She said that was a reason why toy sales in China underperformed relative to other child-related products. The market in China for baby formula is three times that of the US, while the diaper market is 30 percent larger according to Wu.

"But in terms of the toy category, China is only 30 percent the size of the US," she said.

Mattel, which began selling offline in China through distributors in 1999, opened its first flagship online stores-for Barbie and Fisher-Price-through Tmall.com in 2011.

Fisher-Price, Mattel's infant toy and product line, has been the leader in the toy category during Alibaba's 11.11 shopping day for five years in a row.

"Many first-time parents are seeking advice and knowledge," said Jeff Wang, head of Mattel Greater China, adding that "they hop onto the internet for guidance and advice on parenting and to shop for quality goods for their kids".

Wu said that "the post-1980 and post-1990 generation in China, people who are just now becoming parents, are starting to realize that children need intellectual development in a wider sense".

The exposure in China could help Mattel, which reported holiday-quarter sales and profit far short of analysts' estimates last month, hurt by increased competition from rivals such as Hasbro Inc and weak demand in North America.

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