Mattel has seen its earlier operations in China falter, but now closed a new deal with Alibaba to sell interactive learning toys on the fragmented Chinese toy market. For Mattel it is now do or die, says business analyst Shaun Rein to Reuters.
Alibaba’s reach and China’s preoccupation with education could give Mattel the thrust it needs to win over the country’s so-called “tiger mothers”, who aggressively push their children to be the best in school.
“Chinese parents tend to buy more educational toys, science kits and learning toys than all their counterparts in America and Europe,” said Shaun Rein, managing director of China Market Research Group.
While Mattel has garnered a nearly 2 percent share of the estimated $31.5 billion toys and games market in China, it has been unable to replicate the success it has enjoyed in the United States…
Mattel isn’t the only U.S. company that has struggled to navigate the Chinese market.
Wal-Mart Stores Inc (WMT.N) sold its online grocery store Yihaodian in China last year in return for a stake in e-commerce firm JD.com Inc (JD.O), saying the country’s e-commerce market was hyper competitive.
For now, nearly everything is riding on Mattel’s partnership with Alibaba.
“It is just one of a hundred initiatives for (Alibaba),” said Rein. “But for Mattel, it is really do or die.”