From the green pastures of Cambridge to a manufacturing dynasty in China, Zuru Toys is out to become an innovative billion-dollar company. Alexander Speirs meets the successful Mowbray family.

Zuru Toys chief financial officer Anna Mowbray is ever-confident: "We're going to be a billion-dollar company in the next five to 10 years, without a doubt."

It's an extremely impressive target on top of the strong growth Zuru has already sustained. After Zuru shifted its business from the Waikato to southern China, the company reached US$55 million turnover in 2013 and US$100 million last year.

It's been a family business from the outset. Eldest brother Mat founded the business and is the chief executive; Nick is director and president; and sister Anna rounds out the senior management team as the finance guru and chief operations officer.

The Mowbrays, who grew up in Cambridge, have resisted seeking outside capital and investment, opting for an organic growth strategy that kept the company in family hands. Its growth rate has been kept in check and is manageable.


"We will continue to grow internally - although it's not all about the money for us, it's about achieving that next goal. At the moment, we're continuing to focus on toys and innovating, but we'll be looking to diversify outside of toys and expand the business."

Though Mowbray declined to offer much of a hint about what that would entail, Zuru has been working on a number of "big projects". She says "we have spread ourselves thin enough for now."

The idea of a billion-dollar company is a far cry from the Zuru that entered China with little more than a good idea and some raw determination back in 2005. The company's first toy was a miniature hot air balloon that Mat invented, winning the New Zealand Science Fair in 1993.

Zuru moved quickly into commercialising the product, enlisting friends and family to manufacture the balloons from plastic bags, Coca-Cola cans and hand-bent wire in the family garage.

Sales for that product continued to grow, prompting Mat to leave university and concentrate solely on the business.

When sales surpassed 10,000 units, expansion became inevitable. Instead of expanding in New Zealand or outsourcing internationally, Mat and Nick jumped on a plane to Guangzhou.

With little knowledge of the Chinese business environment or the highly competitive international toy market they were attempting to break into, it was a case of trial and error. It began with the pair sleeping in the bushes outside Guangzhou airport when they first arrived - a tale they both proudly recount.

Once they found their feet, Zuru quickly went from success to success. The company diversified its product offerings, and expanded from the single injection mould and limited factory space with each new successful launch.

Rapid growth began when Zuru debuted Robofish, an electromagnetic robotic fish which swims in water. The product was a best seller worldwide, even knocking off Lego as the top selling toy for the 2012 Christmas season in New Zealand - the first time a Kiwi company had achieved that since the launch of the iconic Buzzy Bee.

Robofish was the fastest selling toy globally in 2013, with more than 15 million sold and reaching the top five list for toys sold in 40 countries. Nearly 30 million units have now been sold worldwide.

Leveraging off the success of Robofish, Zuru headed off major players in the industry - the likes of Hasbro and Mattel - to win the rights to a "huge portion" of the master license for Finding Dory, the sequel to Disney's blockbuster film, Finding Nemo.

"I think we should be able to match the success of Robofish just off the back of Finding Dory. Finding Nemo was 15 years ago and it's still iconic. All the main voice talent is returning. We just went to an early viewing last week in Los Angeles and it's looking fantastic," says Mowbray.

"To get the master license for Zuru is huge. Only the biggest toy companies in the world have a chance of winning a master licence from the likes of Disney and Marvel, so it's an exciting time for us. We've already got great relationships with Nickelodeon and Pixar, so adding Disney is going to allow us to really leverage off that."

Zuru will collaborate with Disney as they prepare to roll out a global marketing campaign ahead of a June 2016 premiere.

It's a tight turnaround for Zuru to get the products finalised, produced and ready to go to market in little over 12 months time.

"It's not just fish; we'll be doing a jellyfish, an octopus and a turtle. The original turtle is just launching right now, he's fantastic. Walks on land and swims in water using the same button cell technology from Robofish."

Thankfully for Zuru, the launch comes on the back of further development of their own factories and strengthening relationships with outsourced production.

"Right now we outsource about 90 per cent of our production in China, so at any point in time there are over 6000 workers doing Zuru products. We then bring a portion of that production in-house," Mowbray says.

"We have two factories which are Zuru owned and operated, with 600 workers across those two sites. Not huge, but growing quickly.

"We're looking to be up to about 1000 workers in the near future, depending on how advanced we can get with automation - which would obviously drive down the number of staff we require. Our factories aren't big enough to handle a huge product launch like Robofish. At our peak, we were producing 60,000 units a day of the Robofish, which also needed to be waterproofed.

"It's a fine line, but we've got a good understanding now of manufacturing in China and we can be quite savvy when we assess the technical capability against the product requirements and make good decisions."

As Zuru grows, the portfolio of products has grown quickly, prompting a rapid expansion of creative and development staff based in China to go along with increased capacity.

"We've grown our research and development (R&D) team to over 50 including engineers, prototypers, control drawers, design and creative," Mowbray says. "We are making a real effort to build our in-house China creative team but it's hard to find that talent. I'm always looking for good product and packaging designers, top quality illustrators.

"We go through thousands of interviews and have a very heavy rejection rate. Our standards are extremely high."

Mowbray says sourcing in China can be difficult, but once the right people are found, they are phenomenal. Their work ethic is amazing, and skill sets are incredible.

"We are competing at an international level and our talent has to match a company like Hasbro. Getting to that level is what we're striving to do and we're making great headway."

With the growth of Zuru's R&D team, Mowbray estimates 70 per cent of new products are being developed in-house, with the remaining 30 per cent coming from external inventors.

Zuru receives thousands of concepts for new toys each year - both solicited and unsolicited - and it has sufficient volume to conduct a substantial quarterly review with their inventors and innovation team.

"Usually Mat, Nick and I will each have an opinion on an item straightaway.

"Then we'll banter about how to approach it and whether we push forward with optioning the product," says Mowbray.

"If we option the product, they'll then build and send us prototypes of the toy. We will cost it and price it, and figure out where we can fit it with one of our brands and into our larger portfolio."

Learning on the job

Learning the lay of the land when it came to selling toys was an arduous process for Zuru. In a new country, attempting to break into a global market in which they had no experience meant there was a lot of trial and error involved.

"Because we had no knowledge of the industry, we didn't realise that all deals took place in, and revolved around showrooms in Hong Kong," explained Nick Mowbray, president of Zuru Toys.

"Originally I was just phoning and emailing, anyone and everyone. I tried to find as many contacts as I could to get in with the major retail bidders."

After unsuccessfully trying to beg, borrow and steal their way to some showroom space, the Mowbrays managed to scrounge together enough money to rent a tiny piece of Hong Kong real estate.

The significant expense, however, meant corners had to be cut in other places.

"I used to sleep under my conference table because it was the largest space in the showroom," said Mowbray.

"I remember my very first meeting I'd arranged, the buyer came early and I had slept in a little.

"I didn't want him to see me sleeping there, so I stayed under the table perfectly still and missed the first meeting I'd actually managed to get!"