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Int'l toy companies see the PHL as a viable market
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Toy collectors are some of the most passionate hobbyists around. In the Philippines, these collectors take many forms: there are the nostalgia-philes who focus on toys that let them relive their childhood, such as Transformers and G.I. Joe; the pop culture buffs who must own anything comic book or movie-related, like those impressive Iron Man and Predator Hot Toys figures; those in love with Japanese culture, and target merchandise based on anime, manga, or video games; the mech-addicts who salivate at the sight of high-quality robot model kits, including Gundam and Robotech; and more.
What these collectors have in common is that all the products they love originate from overseas. For example, Hot Toys is a Hong Kong-based production house. Takara and Hasbro, which are behind the Transformers brand, are Japanese and American companies respectively.
Ideally, bringing these brands to the Philippines requires an official distributor. More often that not, however, this is not what happens, especially with regards to those rarer breed of collectible figures – the ones that can’t be found in mass market retail stores such as Toy Kingdom, but only in smaller, specialty shops. Buyers have to rely on retailers who engage in “parallel importing” – the process by which said retailers resell figures they previously purchased from other retailers, instead of directly acquiring them from the official distributor of the toy company. The result? Not only do these figures take longer to reach the Philippines, they also end up more expensive.
Thankfully, some foreign companies have found local distributors who are able to directly provide our shops with their products. Three of these companies are NECA, Kotobukiya, and Kaiyodo, which is behind the Revoltech Yamaguchi brand. Their Philippine distributor is Arigatoys Collectibles, who brought these brands to the December 2013 Toyfair for display.
Distributing foreign-made toys to Philippine retailers: the advantages
Thanks to Arigatoys Collectibles and other local distributors, foreign toy companies are beginning to see the Philippines as a lucrative market for their products.
“We’re building relationships (with the foreign toy companies), we’re trying to make a mark, to say that the Philippines is a great market,” said Arigatoys Collectibles product manager, Harvey. “We’re trying to bridge the gap between the companies and the Philippine market.”
There’s local demand for even the more expensive brands. “Kotobukiya sells well, even though their products are not really volume items. They’re statues, they’re expensive, they’re plus A products, but they sell,” said Alwin, market development manager of Arigatoys Collectibles.
Products brought directly to the Philippines through local distributors are often less expensive.
“More often that not, it’s cheaper,” said Alwin. “Kotobukiya’s grey market (the retailers who participate in parallel importing) is insanely expensive. For example, before we came in, a regular Kotobukiya figure in the grey market was like 6k. Now it’s 3 to 4k.”
“That’s one of our targets,” said Harvey. “If we can get more retailers to get the products from us, we can get the MOQ (minimum order quantity), bring in more stuff, and make them even cheaper. They’re affordable now, but if more retailers got their toys from distributors like us, we can make the prices even lower.”
The other advantage of having a distributor bring these products to local shops is that the process usually takes a shorter time.
“We usually get the items two to three weeks in advance,” said Alwin, who then went on to explain the problems with parallel importing. “They (the parallel importers) are not buying from another distributor; they actually buy the product from another reseller in another country. So there’s that additional step. So we’re giving our retailers an edge. Because if you’re ordering from us, it’s just a few weeks of waiting before it’s in your hands.”
Kotobukiya's Bishoujo 1/7 scale Street Fighter: Cammy statue
Arigatoys Collectibles have made some efforts to reach out to parallel importers. “We’ve approached one or two grey markets,” said Alwin. “We try to tell them, ‘it’s a small community, we’re trying to help you, we’re going to carry all the hard loads, the importation duties, taxes and everything, etc. All these things, we’ll do for you.’”
“We’re letting them see how it’s good for them to get from a distributor,” said Harvey. “You get perks such as faster communication. Any logistical problems, any problems with the product, you can talk to us. We will even gladly replace any faulty items – which you cannot do with parallel imports.”
By bringing original products directly to the Philippines, Arigatoys Collectibles is also hoping to counter the distribution of cheap knock-offs.
“There are lots of fakes in the Philippines,” said Alwin. “Some of the fakes are good, but many are very laughable.”
“That’s one of the troubles we’re trying to do something about it,” said Arigatoys Collectibles business development manager, Kyle. “Our campaign is: we’re telling collectors to get from our official retailers. If they want to support the brand, we direct them to our retailers; we have a list of them on our website and Facebook, so people will know where to get these licensed, original products.”
Buying more originals, of course, will send a good message to the foreign companies: that their products sell in the Philippines.
Toy distribution: how it works
Though it differs for every company, the process of toy distribution is actually quite simple. A company will inform its distributor when a product is available for advanced orders. The distributor in turn will inform the retail shops of said product; the former will then make pre-orders based on the requirements of the latter. Once the product is released, the distributor then delivers and sells it to the retail shops.
“Before pre-ordering, the four of us (Arigatoys Collectibles members Gladwin, Harvey, Alwin, and Kyle) need to discuss how much we want to order because we don’t want to over-saturate the market,” said Kyle. “If we over-saturate the market, the value of the collectible will go down.”
“If the prices keep dropping, retailers stop earning, and they will stop selling,” Alwin expounded. “What’s the point of selling these products if your competitor, due to the over-saturation of the market, is forced to sell below cost? Then everyone will be forced to sell below cost. We do our best to make sure the price is aggressive but affordable enough for the customers, and at the same time we want to help our partners (the retailers) make sure they earn a piece of the amount.”
As for the standard price of the products, they are usually dictated by the manufacturing companies themselves. “The price is set by the company, and it’s the price we usually give our retailers,” said Harvey. “But we always try to discuss with the companies if we could lower the price so that at least it would be more affordable and competitive. And they’re very cooperative, for as long as they can hear what’s happening here in the Philippine market through us.”
He added: “So in order to protect the retail stores and the brand, we tell the retailers to either price the product at the price suggested by the company, or slightly higher. It depends on what they (the retailers) want.”
“With the partners, (the toy companies) what we do for them is help develop their brand here, and to make an image for the brand,” Kyle added. “As for our retailers, our clients, what we do is help them expand their business. So it’s a give-and-take, two-way relationship.”
As distributors, Arigatoys Collectibles does not sell directly to customers. “If you want to buy something from us, we will tell you, ‘please go to our retailers.’ We don’t want to ruin our partnerships with the retailers,” said Alwin. “If we sell directly to the end-customer by undercutting the price, we would be killing our retailers and slowly destroying the industry.”
NECA’s Pacific Rim Wave 2 figures, now available locally
Forging partnerships: from humble beginnings to present
The members of Arigatoys Collectibles, who have known each other since their high school days, started out as collectors themselves, who were into things like anime, Gundam models, and of course, toys.
“We were buying multiple pieces (of figures) a month,” said Kyle. Then one day, they asked themselves the question: “Why not keep some toys for ourselves, then sell the rest to other people we know?”
After plenty of charts, profit analyses, and further research of the local market for collectible toys, the Arigatoys Collectibles retail store was launched. “Our Facebook page popped up,” said Kyle. “It was two years ago, after our graduation.”
“We kept doing that,” he continued. “It was good, but of course, there were many competitors… Eventually we realized we had to grow… We realized we couldn’t just rely on our Facebook our whole lives. That’s the main factor that made us consider distribution… We wanted to grow. So we looked at our retail site and asked ourselves, ‘what brands sell well? Who are their distributors here in the Philippines?’ Of course Bandai was a no-go, because it already has a distributor here. MegaHouse was a no-go, and neither was Good Smile Company. Then we looked at Revoltech. We already knew Revoltech, and we tried to contact them.”
Alwin came on board a little later. It was he who pushed the others to go obtain the rights to distribute NECA and Kotobukiya in the Philippines.
Kyle said: “Alwin can give objective comments like, ‘yes, the quality of that toy is nice, but the price isn’t too great.’ Because the rest of us are biased; when Harvey sees an Evangelion figure, he’s like, ‘that’s awesome! Let’s get it!’ If it’s Fate/Stay night, I’m the one who gets excited… With Alwin, we get the objective check.”
So how did they approach Kaiyodo’s Revoltech Yamaguchi, NECA, and Kotobukiya?
“We were able to search for the contact for our brands, and set a meeting with them in Hong Kong, during the Toy Convention,” Kyle stated. “So that’s how we were able to meet these guys personally… We met them four, five times. They were very nice, very supportive, they were like, ‘take it slow, let’s slowly grow your market, don’t worry, we’ll help you.’ They want us to grow slowly at our pace.”
He added: “So we pay it forward. They don’t want us to order an amount we can’t sell, and we try to achieve the same thing with our retailers. We don’t want them to overstock.”
“To be honest, NECA is very kind,” added Alwin. “They gave us exclusivity for the Philippine market without us giving anything back. Because you know, the negotiation usually goes like, ‘okay, you want to be exclusive? Then you have to order from us this much in a year.’ But NECA was like, ‘okay, we’ll give you exclusivity.’ And we were like, ‘Oh! Okay, thank you!’”
Batgirl flanked by Arigatoys' Harvey, Alwin, Gladwin, and Kyle.
As to why Arigatoys Collectibles are sticking to toys, Gladwin, the company’s marketing and communications manager, said: “As toy collectors, we understand the market better.”
“But we’re not closing our doors,” offered Alwin. “We’re trying not to over-expand. We’ll do toys this year. Maybe next year, or two years from now, you never know.”
“We want to stabilize first,” said Kyle. “So much is connected to the toy industry; it’s like a Venn diagram. You can jump into other stuff. It’s easy for us to go into toys for the mass market. It’s a stepping stone.”
Currently, Arigatoys Collectibles has over 20 retailers.
“We have a few (retailers) in the provinces, we have a few in the south,” said Harvey. “The majority are in Metro Manila. In Iloilo, we have. In Bohol, we have.”
Some of these include Filbar’s, Big Boys Toy Store, DataBlitz, and Wasabi Toys. There are many others outside Metro Manila.
The Pinoy collectors' market: Things are looking up
“We’re in talks with multiple retailers,” explained Kyle. In addition, “Kotobukiya asked us to also handle their model kits… Kotobukiya is pushing us on all their lines.”
“We’re not stopping getting more brands,” said Alwin. “That’s why we’re going to Hong Kong. We’re going to look for more mass market items… We want something that can be sold for around Php 250 to Php 500. Something that will move faster.”
“We’re trying to grow, we also want to be more present in the market,” Kyle stated. “We’re trying to be in every single event, physically… And we’re also planning our exhibit for the June Toycon, so we can make it more awesome.
“We also have our dream projects,” he added. “Like for me, I want to have a cosplay book of our products. Maybe we’ll work with some artists who do cosplay. We don’t necessarily have to sell the book but maybe every time you buy a Revoltech Evangelion, you get a free brochure. You know, something like that. Those are some of our ideas.”
Perhaps one day, they could even work with Kaiyodo to release a special Philippine version of one of the most popular Revoltech figures, Danboard; or they could partner up with Kotobukiya’s artists to create a Bishoujo Darna statue.
“Expect more from us (this 2014),” said Alwin. “We actually have lots of talks with different suppliers. If ever, we might be launching one or two more brands.”
