Understanding International Trade through the Manufacturing of Barbie
Updated: Sep 4
Barbie, the iconic doll, has long been a fixture in the toy aisles of stores across the globe. Over the decades, her prominence has only grown, becoming synonymous with childhood for many. In recent times, the character of Barbie has been further popularized by the movie featuring Margot Robbie and Ryan Gosling. This film, which is currently trending worldwide, has become a modern-day feminist icon, tackling pressing issues like gender roles and patriarchy.
Yet, apart from the societal norms that Barbie challenges, there's an economic tale woven into her manufacturing and distribution story – a narrative that provides insights into the complexities of international trade.
The Economics of Barbie's Production
A dive into the production journey of Barbie offers a clear understanding of the intricacies of global economics. Drawing from the research by Feenstra (1998), Barbie's production process is a stellar example of the global division of labor and the dynamics of outsourcing.
The doll’s raw materials – primarily plastic and hair – are sourced from Taiwan and Japan. In the initial phases, assembly took place in these countries, as well as the Philippines. However, with the shifting sands of the global economy and the perpetual search for cost-effective production, the assembly has now shifted to regions like Indonesia, Malaysia, and China.
Interestingly, the molds for Barbie come from the U.S., as do some paints that adorn her. China, where a significant portion of the assembly takes place, primarily provides the cotton cloth for her dresses. Breaking down the economic value, a Barbie doll, when exported from Hong Kong to the U.S., has a value of $2. Chinese labor accounts for 35 cents of this, materials cost around 65 cents, and the rest is distributed across transportation, overheads, and profits in Hong Kong.
When Barbie reaches the U.S. and is sold for approximately $10, Mattel, the company behind Barbie, earns at least $1. The rest is allocated to various processes like transportation within the U.S., marketing, wholesaling, and retailing. What’s fascinating is that the majority of the value-added comes from activities within the U.S. This single product, Barbie, led to sales of a staggering $1.4 billion for Mattel in 1995.
Inshoring vs. Offshoring
The Barbie example also brings to light a broader trend in the world of manufacturing – the tug-of-war between inshoring and offshoring. With rising wages and production costs in countries like China, and issues ranging from intellectual property protection to political instability, many companies are now considering repatriating manufacturing processes to Western countries. This shift, known as inshoring, contrasts the earlier trend of offshoring, which saw businesses move production to countries with lower labor costs.
In Conclusion: Barbie, More than Just a Doll
Beyond the pink boxes, beyond the feminist narratives and cinematic renditions, Barbie stands as a symbol of the intricate web of international trade. Her journey from raw materials in Asia to the shelves in the U.S. tells a tale of global cooperation, economic strategies, and the ever-evolving dynamics of global trade.
So, the next time you see a Barbie, know that she isn't just a toy. She’s an economic ambassador, representing the intricate dance of international production, trade, and consumption.
[Reference: Feenstra, Robert C., 1998. Integration of Trade and Disintegration of Production in the Global Economy. Journal of Economic Perspectives 12(4), pp. 31-50. The Barbie doll story is based on a 1996 newspaper story by Rone Tempest in the Los Angeles Times.]