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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

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The Greatest Toy Market


WHEN YAMASHINA MAKOTO DECIDED to manufacture outside Japan, he knew just the place where toymaker Bandai should build a plant. "China," says the CEO. "It has 300 million children 14 years and younger, almost three times Japan's entire population. The number of Japanese kids has been dropping. And believe it or not, the average price of Christmas toys in Japan has been $20 for years." Bandai's first non-Japanese manufacturing center opened in the Fujian town of Fuzhou in 1985. When China Fuman Toys celebrated its 10th year last September, it was employing 2,000 workers in three factories. Fuman's turnover now surpasses $15 million. One of ten Mighty Morphin Power Rangers and Ultraman toy figures it makes is sold in China. The others go to the U.S., Europe, Hong Kong, Taiwan and the rest of Asia.

Bandai is positioning itself to sell more of its products in what it calls "the world's greatest toy market" as China grows more affluent. Last year, it opened a Beijing facility in partnership with the local apparel subsidiary of Japanese trading giant Itochu. The factory has started producing T-shirts, towels, socks and other items imprinted with Ultraman, which is by far the most popular Bandai character in China. The products have been selling in major department stores in Beijing, Shanghai, Dalian and three other cities since September. Bandai expects first-year sales to reach nearly $1 million -- and five times that in three years.

One problem: copyright infringement. Small operators have long been pirating Bandai action figures and garments. The company is counting on more protection from the government, which is also under pressure from the U.S. on the same issue. For now, though, the Japanese toymaker is focusing on mastering the ways of Chinese business. To commemorate its anniversary, for example, Fuman organized an exhibit of Ultraman products at the Fujian Province Museum. "It served to test Bandai's approach to character merchandising in China," says the company. It's working. Fuman has been chosen one of Fujian's best foreign companies every year since 1989. That also helps assure Bandai and its CEO access to the world's biggest market.

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