ASEAN – China Agreement on the free market provided opportunities for Indonesia. One of the positive outcomes is the reduction and elimination of tariff and non-tariff barriers in China, and opened up opportunities for Indonesia to increase the volume and value of trade to a country which has largest population and one of the highest economic growth rates in the world.
The effects of this agreement can be seen in the toy industry as well. Many Chinese toy brand labels have also made inroads to Indonesia and compete with local and suppliers from other countries. This is no surprise for a market which has long placed children as one of the most important target market segments. With a quarter of its 250 million total population aged under 14, Indonesia provides immense potential and business opportunities for the toy market (Indonesia demographics profile, 2014).
Based on the data from the Ministry of Commerce, the value of toy imports in Indonesia each year reached USD 75 million, of which more than 90 percent is contributed by China while the world toy market is valued at a total of USD 83.3 billion. Meanwhile, the children's toy market in Asia has increased an average of 9.2% a year (BPS, 2010).
Many local consumers were drawn by Chinese toy labels as a result of their relatively lower prices and product design. These toys are often found in various places ranging from toy stores, suburban stores, traditional markets, sidewalks stalls, and convenience stores. However, not all of these imported toys had met safety standards. It had been reported that some of these imported toys contained harmful substances and were for unsafe for children. Moreover, the packaging of imported toys which use foreign language wordings cannot be understood by Indonesians in general.
SNI is formulated by the Technical Committee and confirmed by the National Standardization Agency of Indonesia (PP No. 15 Year 1991) to provide protection to children in Indonesia on the safety and quality of their toys. The government issued Ministerial Decree No. 55 / M-IND / PER / 11/2013 on the Amendment to the Ministerial Decree No.24 / M-IND / PER / 4/2013 About Indonesian National Standard (SNI) Toys Obligatory. The regulation was issued by the government on 11 November 2013, and has been in place since 30 April 2014. The Ministry of Industry has defined 5 SNIs which are mandatory : SNI ISO 8124-1:2010 (mechanical and physical parameters), SNI ISO 8124-2:2010 (Flammability parameter), SNI ISO 8124-3:2010 (Migration of certain elements), SNI 7617:2010 (Azo dyes and formaldehyde), SNI IEC 62115:2011 (electrical toys) and phthalates (based on EN 71-5).
In order to implement this regulation, Ministry of Industry has issued the Decree No. 2 Year 2014 regarding the certification scheme for SNI toys and also notified the conformity assessment bodies (Product Certification Bodies and Testing Laboratories) based on Decree No. 18 Year 2014, No. 12 Year 2015 and No. 95 Year 2015. At the moment, there are 13 Product Certification Bodies and 39 Testing Laboratories which have been notified to issue SNI and perform testing based on SNI.
The objective of the mandatory implementation of SNI is intended to protect Indonesia's children from the dangers of using toys are not assured of quality or safety. Many imported toys were made of plastic and could contain hazardous materials such as heavy metals, or as the result of recycling.
The implementation of SNI for the toy industry commencing in April 2014 is expected to build consumers' confidence and boost business opportunities for Indonesia's domestic toy industry. For local players, the implementation of regulated SNI toys also provide greater opportunities for the domestic toy industry to expand its export market.
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Sources:
[1] Indonesia Demographics Profile 2014.
[2] Hendra Gunawan, "Exports Toys Amount, Higher Than Import”", November 2013.