A toy venture

During its inception, Toy 2 R was just another Hong Kong company with 10 employees at most. Mysteriously, it took less than two decades for the firm to emanate as a renowned market leader in designer toys and collectables. Its annual sales volume rockets to tens of millions Hong Kong dollars...

In the toy world, there are almost countless number of toy. Raymond Choy, however, set a clear goal when he launched his business: his design and product is not those“common stuff” for children but toys which are going to become items for toys connoisseurs.

Choy has been a toy lover since he was a kid. In 1993, he accidentally found an “X-men” action figure and ascertained that collecting these items could generate a lucrative income. That inspired his intense interest in collectables, as well the huge potential of that specialized toy market.

Raymond recalled, “The price of vintage toys that were preserved along with their original packaging can cause a stir and command a considerable sum of money. Once I unwrapped a figure costing ten dollars initially, it depreciated to eight dollars immediately. Nevertheless, if I kept the packaging intact, it could over the long haul be worth three times, six times or even ten times in price.”

Raymond left his American shoe factory and founded Toymart, a toy retail shop, in Mongkok, two years after his X-men investigation. He had been working at the shoe factory for a decade and was the quality control section chief for years. Such credential taught him the significance of a complete understanding of product standards and customers service, empowering Choy’s exposure in areas such as merchandizing, quality inspection and compensation claims.

Another two years later, Raymond moved his toy shop from Mongkok to Tsim Sha Tsui, when he met some American toy manufacturers. Since then Raymond shifted his focus from retail to wholesale, beginning with some unique toys from small American toy makers, hoping he could launch his own brand in the long run.

However, a setback in American and Japanese toy markets slowed both Raymond’s retail and wholesale businesses. It was a time for him to better understand the operation of the industry as well as characteristics of the market. Choy was convinced that selling other manufacturers’ products was not a way out, and only brand owners survived in stormy economic weather.

On the other hand, he realized that branding itself is not an overnight undertaking. It requires unique design and a dear promotional budget. To overcome these barriers, Raymond’s firm (his companyhad been then renamed to Toy 2 R, which stands for “Toy to Raymond”) entered a joint campaign with Easy Finder, a youth magazine, promoting “Penny”, a “living dead doll” special edition series, which was a hit.

Savoring this initial victory, Raymond spared no time to promote the character of his brand. He adopted a skeleton doll as the company logo. For years, Raymond was adamant in making scarcity a must for his collection. All his products had a limited run of only 500 to 1000 packs; each of them is with a unique identity (a serial number).

Toy 2 R also reinforced its product design capacity, thanks to the release of its “Toyer”, “Qee” and a patent detachable key ring. Raymond said, “The patent design has established our brand as we seized the opportunity to enter joint ventures with internationally renowned companies. If we had failed to file a patent, it would have been hard for us to beat those infringers. “

Besides, Raymond knew that he had to be flexible especially when he lacked capital and resources. At the end of 2002, Raymond was invited to a trade show in France, where he met more than ten designers from all over the world.

He recalled, “I had prepared more than ten white dolls for bringing to France. When I met those designers, it just popped up in my mind that I could invite them to paint patterns or graphics on them... Looking them drawing those dolls pleasantly while smoking, I felt it was is virtually a dream-come-true. These precious dolls are still my favorites since you don’t often have stylish artists design exclusively something for you.“

While designing his own products, Raymond was busy at marketing too. Several monthsfollowing the France trade show, Raymond embarked on his World Wild Tour exhibition, which was materialized with the assistance from various local agencies. Raymond said that designer toy show was then an unprecedented idea. This excited many local media from the show cities and resulted in massive coverage. Through these shows, Raymond was able to have a better grip of market opportunities and customers’ tastes in different places, which are very valuable information for marketing purposes.

Raymond remembered that a Los Angeles design student remarked during one of the shows at San Diego, “Wonderful, fantastic, awesome, (but) I can do it better.” It is that murmuring triggered Raymond’s initiative to provide a platform for designers all over the world to display their creativity. He launched DIY dolls for his “Qee“ series, allowing everybody to design his or her original design, including the package. People could send back these designs and the selected works would be on display during the next world tour show. Besides, as a token of appreciation, the winning designers got a not-for-sale special edition doll.

The tour events were an unexpected success as Raymond gathered hundreds of “Qee” designs and purchased their patents at a relatively low price. This laid the foundation for the forthcoming rapid growth of Toy 2 R. Raymond has so far ushered in 1700 different designs of “Qee” series dolls, which involves some 200 designers.

The financial tsunami in 2009 plunged Raymond’s business quite badly as many US clients were unable to honor due payments. Fortunately, the setback was compensated since Toy 2 R has from 2007 onwards drummed up its mainland China business. Growth in mainland could be attributed to the assistance from a former schoolmate, Sammy Mak. Due to his effort, Toy2R was able to recruit a Mainland licensee who launched 15 franchise chain-stores in various mainland cities within a two-year period. Later, Raymond and Sammy formed a company to become the exclusive agent for promoting Toy2R licensing business in China. However, Raymond is not a hothead. He always cautions himself not to act too hastily. The emerging wave of designer toys still takes time to ripe, Raymond reminds.

Yet Raymond had to clear some hurdles, including escalating production cost, and the plethora of imitators using Raymond’s DIY formula. He chose to outpace his competitors by making even bigger strides. Toy 2 R has entered joint ventures with famous brands such as Adidas, Starbucks, Microsoft, Nokia, Sony, Mitsubishi, Samsung, Swatch, Budweiser and DKNY. In these joint ventures, exclusive design was tailored made for their partners. Meanwhile, original designs from Toy 2 R have surged from 30 per cent to 70 per cent.

Raymond concluded, “We have to focus on intellectual property, making sure that the artworks we collected, some from our designers, are all licensed.”

Still, Raymond was willing to take the chance when necessary, as he knew that market is ever-changing. He said, “We are planning to solicit the right place, the right management personnel to set up our own factory in the coming five years. We have plenty of orders to feed this new factory, and I think this can enhance smooth operation.”

Site Map Copyright © 2010 Center for Entrepreneurship. All Rights Reserved.