Although many of the country's toy manufacturers are trying to survive the chilly winter, Bi said the crisis has played out in his company's favor and fostered the advent of an early spring for sales. This is largely due to Letao's advantages as an e-commerce firm.

E-commerce sales in general have received a boost as manufacturers here have sought cheaper sales channels to cut their costs. The total e-commerce transaction volume increased 20 percent in China last year despite the onset of the economic crisis, according to data from IDC International. The technology research firm forecast in a report issued on January 4 that e-commerce will maintain its growth momentum in China during the next five years.

Letao's recent success also has to do with its focus on the domestic market.

"Letao sells brand-name toys instead of making toys, and our business is locally based and caters to domestic customers," Bi said. "That's why we don't think the global crisis and the closedown of many China's toy exporters would affect Letao."

As manufacturers struggle with shrinking orders worldwide, they are increasingly counting on China's domestic market. With traditional sales channels already satiated, international brands are looking for new outlets such as vertical B2C platforms. Letao's portfolio of suppliers has expanded quickly in the past months despite the deteriorating global economy. The company has signed contracts with 25 international toy makers to date, Bi said.

China will witness a reshuffling of its toy manufacturing industry this year because of plummeting orders, increasing costs, stringent liquidity control and reduced tax rebates on toy exports, Bi said. Small companies will run out of cash and shut down, while those quick to adapt and having multi-tier sales networks could survive, he added.

Letao will help domestic toy manufacturers make adjustments and encourage them to upgrade their production by selling more quality toys to the domestic market through its B2C platform this year, Bi said.

Spreading the word

The economic crisis has brought Letao an unexpected boost in sales and made it possible for the nascent website to turn a profit by this June, Bi said.

They plan to offer more novel toys for adult customers who are less price-sensitive than kid's toy buyers. Of its product portfolio, about 70 percent of the company's toys are made for children, while 30 percent are for grown-ups-the main force that has been pushing up sales during the Christmas and Spring Festival holidays. But the ideal breakdown would be 40 percent of toys for children and 60 percent for adults, Bi said.

Now Letao is focusing some of its attention on spreading the word to its customers about the concept of safe toys and the idea of learning while playing. Bi said nearly 80 percent of parents who purchased its toys did not know how to tell the difference between safe and unsafe toys and had no idea that certain toys were made only for children in specific age ranges.

Lu Yinan, Vice President of Letao, said the company plans to sponsor some companies that focus on early childhood education with teaching aids and work with them to conduct research on teaching theories related to early childhood education this year.