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China Now Dominating Crucial Adult Toy Industry

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On the heels of reports China has overtaken the US in iOS (AAPL) and Android (GOOG) smartphone activations, luxury watch demand, and as the world’s largest grocery market, a Taiwanese newspaper highlights another industry China is quickly dominating: sex toys.

The Want China Times reports the adult products industry is thriving in China, where “more than half of the world’s total adult toys are made.”

The statistic is confirmed by Ng Man-Lun, a sexologist based in Hong Kong, who estimates that "more than 50% of sex products sold worldwide are made in China."

The good doctor (R) and an obviously intrigued radio host

China’s fervent concern over a few seconds of full-frontal cinematic nudity is a bit surprising after learning 70% of China’s erotic-toy output was purchased domestically in 2008. Sex dolls are the market leader. According to its owner, one factory in China’s Zhejiang province churns out 800 dolls a day, high quality models retailing for 100 yuan (US$15.85) each. With over 1,000 specialized factories across the country, domestic adult-toy sales numbers are close to US$16 million, a five-year-old statistic expected to grow at 20% annually.

However, while the Chinese excel at turning out erotic novelties, their wares can prompt more than a sideways glance from authorities. According to the Chinese-language Entrepreneur magazine (via Want China Times):

China's first sex shop was opened in Beijing in 1993, seen by many foreign China watchers as a symbol of an increasingly open society in the country. Yet 20 years later, the industry remains in a gray area and is often the target of government crackdowns against "profanity." The founder of a medical equipment manufacturer, the first company to produce a product for male masturbation, was questioned twice by the police, once in 1993 and again in 1996.

Despite the challenging environment, several online retailers selling adult products online began to emerge in 2000. The estimated number of these retailers ranges from several hundred to several thousand, including 100 leading companies, most of which are based in Beijing.

Naturally, the United States has been more than willing to help support the good people of Zhejiang's inflatables industry. Stefan Dallakian, the owner of Paris Inimtates, a web-based erotic toy distributor (based outside Detroit, where else?), blames the economy:

“At a time when unemployment is high and bank account balances are low, people are passing the time by getting busy.”

Lo, the image of the trench-coated figure lingering in the back aisles of a smutty, 42nd-street sex shop has long lost its relevance. Anonymous, online shopping, and high-end boutique stores have transformed the adult toy business into a lucrative, shame-free industry.



Reports as far back as 2009 hail these niche-products as remarkably recession-proof. Forbes places U.S. sex-toy sales at $1 billion, a fair share of the $15 billion global industry.

These revenues exclude the once booming adult entertainment business, which in recent years has suffered from piracy as well as the proliferation of free and cheap content online (according to a CNBC exposé). Publicly-traded "porn" companies like Lodgenet Interactive Corp (LNET) and New Frontier Media (NOOF) have seen their stocks decline in the past few years.

Adult toy sellers have avoided any such financial woes. Even in hard times, consumers who are strapped for cash seem willing to splurge when it comes to their personal pleasure.

Even the Chinese seem to be getting accustomed to eating their own cooking, where the citizenry spent -- profanity crackdowns be damned -- an average of $289 each on sex products last year.

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