Toy Manufacturing; Is the Next Stop Cambodia?

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Those who engage in the business of play are always
looking for the next low cost labor country. 
The baton has, over the last 100 years been passed from Germany to Japan
to Taiwan to Hong Kong to its latest and seemingly final resting place in
China.

The fly in the ointment, however, is that though China
now produces 86% of the worlds’ toys it is no longer the low cost provider it
once was.  Is Cambodia the next stop for
those in search of a lower cost of goods?
 

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New York Times writer Keith Bradsher thinks so in his
article, “Hello Cambodia.”  He tells us
that companies are looking to move out of China in order “…to limit their
overwhelming reliance on factories in


China.” 
He gives us this description of the urgency to find an alternative: 

Problems are multiplying fast for foreign
investors in China. Blue-collar wages have surged, quadrupling in the last
decade as a factory construction boom has coincided with waning numbers of
young people interested in factory jobs. Starting last year, the labor force
has actually begun shrinking because of the “one child” policy and an aging
population.

At least at this moment in history I would not anticipate
Cambodia or any alternative to China making much of a difference. 
Just look at the numbers:  China has the second largest GDP in the world
(Cambodia is number 121) and a population of 1,354,040,000 people compared to
Cambodia’s 13,395,682.  Simply put, there
is no country in the world that can match China’s infrastructure, population
size and sheer manufacturing capacity. 

For the forseeable future, there is no next stop for manufacturing.

 

5 thoughts

  1. With textiles, U.S. companies are already starting the migration out of China. Vietnam seems to be destination #1 on the exodus. Why not Cambodia as well? The fact is China is becoming expensive, quickly.
    Of course, if Mexico ever pulled itself together it would be a remarkably attractive destination for manufacturing simply due to shipping costs and NAFTA benefits; but, it seems they’ve missed opportunities for over 2 decades to make themselves attractive (though there are some limited toy manufacturing endeavors in the Ensenada area).

  2. Then add in the fact that Cambodian export authorities are more difficult to deal with, you will need to be keen to spend the time developing a sourcing base there.

  3. I’m with you. I can’t imagine how Cambodia could compete with the ability that China has to mass produce. It will be interesting to see what comes of things.

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