Big Tree Group, Inc. (BIGG) Punches Above Own Weight in an Inexorably Growing Chinese Toy Market

Big Tree Group, which is headquartered in what is regarded by many in the industry as the toy manufacturing capital of China, had a pretty solid year last year on the strength of robust export customer base growth from their subsidiary in Brunei, up 30.5% YoY, even as the company’s wholly-owned Shantou Big Tree Toys Co., Ltd. saw a $5.8M jump in sales, leading to a 17% rise in total revenues for FY13 compared to 2012. The success of the company’s one-stop-shop model for distributing, manufacturing and sourcing toys has produced considerable growth that runs straight on into this year, with a big push into Latin American markets in recent months underscored by robust performance in the company’s core Asian markets like China and Hong Kong, as well as continued performance strength in the U.S and Europe.

Tipped off by a $400k order in June for various dolls, electronic learning games, instruments and play sets from a retail chain in Costa Rica that offers its customers a variety of home and family goods, as well as hardware, BIGG’s push into Latin America is being bolstered by the company’s established reputation for quality control and customer service. BIGG sees a bright future in the Latin American market and anticipates more deals with this particular customer after they have wrapped the current deal sometime in late Q3 this year.

Emphasis by BIGG on value pricing has allowed the company to tap markets like Latin America with noteworthy alacrity and this initial $400k deal with one of the premier retailers in Costa Rica should pan out nicely for Big Tree, which sources its massive array of over 300k toy products from more than 8k different manufacturers in China. Of course, the burgeoning toy market in China itself is a healthy backdrop for BIGG’s international growth (70% or more of all toys on earth are manufactured in China), with business intelligence firm Euromonitor International indicating the domestic toy market grew at some 21% per year on average from 2007 to 2011, topping out around $8.3B just three years ago.

According to a 2013 report from top producer of broad-spectrum, multi-industry analytics, IBISWorld, China’s toy manufacturing sector was on track to generate $29.21B in 2013, up 8.5% for the year, as growing Chinese household incomes continue to result in more and more consumer spending on children (domestic demand up 16.8% annually over the last five years). China’s fourth baby boom, expected to last till around 2015, even accentuates extant one-child policy metrics that have been bullish for the toy industry due to the lavishing of many gifts upon an only child by parents. The benefits to BIGG of the fourth baby boom are also reinforced by strong demand in the domestic market for local toy brands. It is worth pointing out that the slowing growth in China and elsewhere has actually accelerated BIGG’s model, as more consumers have begun purchasing value-priced toys.

Extending their already successful one-stop-shop model with a sleek new domestic e-commerce store, Afangta.com, Big Tree Group is doubling down on their domestic customer base/supply chain with improved online ordering, as well as product distribution support. The new site does it all, from enabling bulk purchasing and review of extensive toy catalogues, to services like online trading, custom/personalized product manufacturing, quality testing/assurance and reputation assessment. Big Tree Group even added a third-party payment guarantee service to Afangta.com via a deal with the only domestic bank card organization in the PRC, China Union Pay.

Asia has edged out Europe to become the second largest toy market globally (just behind the U.S.) and Big Tree Group is well positioned to access international markets from their base in Shantou. Solid domestic consumption and future growth rates, optimum market focus that plays well into the prevailing global economic picture, and an extremely tight-knit relationship with a vast network of supply chain partners and customers puts BIGG right up there at the forefront of the sector for its size.

For more information on Big Tree Group, visit: www.bigtreegroup.net

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