Opportunities for toy manufacturing in Southeast Asia

During last month’s Hong Kong Toy and Games Fair, the Southeast Asia Toy Association (SEATA) hosted its Annual Summit. The event brought together experts from key emerging manufacturing countries in the region including Vietnam, Indonesia, India, Malaysia and the Philippines.SEATA was founded three years ago by a group of leading toy brands and retailers including Mattel and LEGO. Asia Pacific is the world’s most rapidly developing market for toy sales, and Southeast Asia plays a crucial role in its growth. Southeast Asia’s population is over 625 million and set to grow to 717 million by 2030. In addition, their economies are growing fast, with aggregated GDP growth of 4.7% per annum. At the event, established factories in Vietnam and Indonesia shared insights on the benefits their companies have seen after expanding in the region and diversifying their base. For Vietnamese manufacturing this including the logistical benefits of the close proximity to Mainland China and a reduced language barrier as most Vietnamese people learn Mandarin at school. Benefits of Indonesian manufacturing included a large supply of workers and lower labor costs. Our President and CEO, Carmel Giblin also presented at the SEATA event sharing insights on some of the top 5 most common social compliance risk areas we encounter in our work to raise standards at toy factories in Southeast Asia. These include a lack of Personal Protective Equipment, insufficient emergency evacuation processes, wages & compensation not meeting legal requirements, issues around clear emergency exits, and challenges around llegally required benefits not being provided. Southeast Asia is a region of opportunity for toy manufacturing, countries such as Indonesia and Vietnam typically have a high volume of workers with the necessary skills to support toy manufacturing. Labor costs can also be lower than other toy manufacturing regions, and benefit from our dedicated support in the region. After China, Indonesia and Vietnam are the countries where the Ethical Toy Program has the most Certified factories and so we are increasing the level of support we are offering to toy factories based in these countries. Last year, Ethical Toy Program opened an office in Ho Chi Minh City, Vietnam and hired a new team member in our South East Asia team dedicated to increasing our on-the-ground support to Vietnamese factories and supporting delivery of our Progress Visits which complement our audit program by providing increased capability building training and support for our factories. We are also developing more resources in Vietnamese such special guidance for our Audit Checklist which will soon be available in Vietnamese.For support in the region please email Jane Van at jane.van@ethicaltoyprogram.org who is available to help factories and all other stakeholders with any questions they may have.