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Updated by: Alina AL-GARBY and Goran SELAK Embassy of BelgiumAril 2017 Economic office in Zagreb

The Toy Sector in Croatia

Summary1 INTRODUCTION.......................................................................................................................3

2 GENERAL OVERVIEW OF CROATIA...........................................................................................3

3 THE TOY MARKET....................................................................................................................5

4 REGULATIONS.........................................................................................................................84.1 DECLARATION...........................................................................................................................94.2 CE MARK.................................................................................................................................94.3 SIZE.......................................................................................................................................104.4 MATERIALS.............................................................................................................................10

5 FESTIVAL OF TOYS.................................................................................................................11

6 CROATIAN MANUFACTURER.................................................................................................11

7 LIST OF CONTACTS................................................................................................................11

1 Introduction

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As a Mediterranean and Southeast European country, Croatia is one of the most dynamic countries of ex-Yugoslavia.

When Croatia entered into European Union in July 2013, the EU recognized the democratic development of Croatia since the Independence in 1991.

The entrance of Croatia in the EU can also be considered as a message of hope for its neighboring candidate states.

Overall political and economic stability, an effective legal system and free enterprise in a democratic environment were the arguments for Croatia's EU membership.

2 General overview of Croatia

Croatia is a country of 4 429 000 inhabitants. It is a democracy whose official language is Croatian, but many people speak English (49%) and other foreign languages, mainly German (34%) and Italian (14%). The capital is Zagreb. Other main cities are Osijek, Rijeka and Split.Croatia had a GDP growth of 2.9% (Q3 2016).

In 2017, the economic activity should accelerate mildly, up to 2.1 percent. For 2017, the IMF expects an increase in inflation by 0.8 percent. The estimate of this year’s surplus in Croatia’s current account should slip to 2.2 percent.

Unemployment is relatively high and, according to official sources, reached 14.8% of the workforce in December 2016. Despite government efforts to stimulate employment with various programs of incentives for employers, the level of unemployment remains a significant social and economic burden. In spite of this, it is worth mentioning that Croatia has a high skilled and educated workforce in different fields. E.g. in ICT, the country is well known for having a good and competitive background.

The national money is the Kuna (HRK). The average monthly paid off net salary is 5 676 Kuna HRK (760 euro), which represented a nominal increase of 0.1% and a real decrease of 0.4%, as compared to the first quarter of 2016. As compared to the same period of 2015, it showed a nominal increase of 1.2% and a real one of 3%.

http://www.worldwide-tax.com/croatia/croatia-vat-taxes.asp

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INDICATOR MONTHS YEAR VALUE

GROSS DOMESTIC PRODUCT, % REAL ANNUAL GROWTH RATES

q3 2016 2,9

INDUSTRIAL PRODUCTION, % ANNUAL CHANGES 10 2016 1,8

CONSUMER PRICES, % ANNUAL CHANGES 10 2016 -0,5

PRODUCER PRICES, % ANNUAL CHANGES 10 2016 -2

RETAIL TRADE, % REAL ANNUAL CHANGES 10 2016 5,3

TOURISM - NIGHT STAYS, % ANNUAL CHANGE 9 2016 11,5

CONSOLIDATED CENTRAL GOVERNMENT BALANCE, HRK MILLION, ESA 2010

2015 -10.706

CONSOLIDATED CENTRAL GOVERNMENT BALANCE, % OF GDP, ESA 2010

2015 -3,2

AVERAGE MONTHLY NET WAGE, HRK 9 2016 5,624

UNEMPLOYMENT RATE, % EOP 10 2016 14

NUMBER OF REGISTERED UNEMPLOYED PERSONS 10 2016 225,703

AVERAGE EXCHANGE RATE EUR/HRK 10 2016 7,5

AVERAGE EXCHANGE RATE USD/HRK 10 2016 6,8

AVERAGE EXCHANGE RATE CHF/HRK 10 2016 6,89

EXPORT OF GOODS, EUR MILLION (CBS) 8 2016 927

IMPORT OF GOODS, EUR MILLION (CBS) 8 2016 1,568

CURRENT ACCOUNT BALANCE, EUR MILLION q2 2016 152,2

CURRENT ACCOUNT BALANCE, % OF GDP q2 2016 4,6

EXTERNAL DEBT, EUR BILLION, EOP 8 2016 43,672

EXTERNAL DEBT, % OF GDP 6 2016 97,3

PUBLIC DEBT, % OF GDP, ESA 2010 2014 85,1

OFFICIAL INTERNATIONAL RESERVES, EUR MILLION, EOP 10 2016 12,993

MONEY (M1), HRK MILLION, EOP 10 2016 78,783

TOTAL CREDITS, HRK MILLION, EOP 10 2016 259,746

DEPOSITS WITH COMMERCIAL BANKS, HRK MILLION, EOP 10 2016 207,261

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3 The Toy Market

According to the 2016 NPD/ICTI Global Toy Market Report, global toy sales experienced continued growth over the past five years. Sales in 2015 increased 4% over the prior year to $87.4 billion. In Europe, sales increased by 6% and a value of €16.5 billion.

In the toy market, there are 5000 companies in Europe with more than 220 000 employees. The toy market is very seasonal: 50% of the toys consumption is made during the last two months of the year.

There are about 4.4 million people in Croatia and about 650 000 children (less than 15 years old).

In 2015, the imports of toys and games in Croatia were about 143 million euros, up 30.3%. Most of the trade is made with China and EU (mainly with Netherlands, Germany, Austria, and Italy).

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The market shares held by specialized stores is falling down (about 40%, due to the development of others channels - Internet, supermarkets, gas stations).

Now we can say that one out of five toys is bought on Internet. This statistic is going up every year, and the toys specialized stores (especially the small units) are going through difficult situations.

In the retail trade in Croatia, there is a trend of concentration of the market share of leading trade chains, because their activities are aimed at the development and expansion of their own brands, the construction of shops on favourable locations and constant price promotions.The retail chains have been successfully positioned on the market, and retailers are increasingly struggling to compete. In crisis times, consumers choose more affordable toys, and more than 50% of toys are sold in November and December.

In the retail trade of toys and toys in specialized stores, between 2011 and 2015, the number of registered business entities was between 22 and 28.

Average operating income per business declined from year to year, from HRK 6.8 million in 2011 to HRK 2.1 million in 2015.

The consolidated financial result of small retail trade in toys and toys at specialized stores was positive only in 2015, when net profit was 921 thousand HRK.

In the period from 2011 to 2014, the biggest net loss was in 2012 and it was HRK 22.7 million.

Title

Retail sale of toys and toys in specialized stores except engine vehicles

Retail sale of toys and toys in specialized stores

2015. 2011. 2012. 2013. 2014. 2015.

Number of entrepreneurs 8.349 24 24 22 28 25Number of employees 91.027 184 328 233 305 150Total income 87.199.787 162.167 132.546 78.087 103.211 53.222Total expenses 85.640.886 166.325 154.488 86.816 111.162 51.970Profit period 2.229.419 1.109 2.847 1.129 2.795 1.310Loss period 1.056.484 2.400 25.513 10.158 11.409 388Profit or Loss period 1.172.934 -1.291 -22.665 -9.029 -8.614 921Export 1.305.933 29.448 16.104 1.623 2.080 3.356Import 10.822.283 82.023 55.439 9.514 8.804 5.837Trade balance -9.516.350 -52.575 -39.335 -7.891 -6.724 -2.480Investments in new long-term assets 1.992.544 6.132 5.557 939 1.232 1.093Average monthly net earnings per employee 4.288 4.180 2.641 2.923 2.904 3.088

Source: Fina – Registar godišnjih financijskih izvještaja

Top 5 entrepreneurs by profit in 2015 (In thousands HRK)

No. OIB Title Area Profit period Total profit Number of employees

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1. 72438732598 INTEKS PROMET d.o.o. Zagreb 742 12.151 292. 32619970125 POKER PIK d.o.o. Čakovec 279 2.233 63. 73323157067 A.D.S. d.o.o. Umag 83 3.246 74. 91841941117 PLAVA KUTIJA d.o.o. Zagreb 79 2.582 05. 61771526184 LORA TRGOVINA d.o.o. Zagreb 57 476 5

In total top 5 1.240 20.688 47In total all entrepreneurs according to the approved criteria (25) 1.310 53.222 150The share of top 5 entrepreneurs per profit period 94,6% 38,9% 31,3%

Source: Fina – Registar godišnjih financijskih izvještaja

Top 5 entrepreneurs by profit in 2015 (In thousands HRK)

No. OIB Title Area Profit period Number of employees Profits or loss

1. 44225131109 EUROM DENIS MALOPRODAJA d.o.o. Zagreb 21.909 70 232. 72438732598 INTEKS PROMET d.o.o. Zagreb 12.151 29 7423. 84932146143 PRODIS MALOPRODAJA d.o.o. Zagreb 8.231 18 284. 73323157067 A.D.S. d.o.o. Umag 3.246 7 835. 91841941117 PLAVA KUTIJA d.o.o. Zagreb 2.582 0 79

In total top 5 48.118 124 954In total all entrepreneurs according to the approved criteria (25) 53.222 150 1.310The share of top 5 entrepreneurs per profit period 90,4% 82,7% 72,8%

Source: Fina – Registar godišnjih financijskih izvještaja

The graph below compares the highest income earners to the new value in 2015. According to this criterion, EUROM DENIS MALOPRODAJA d.o.o. From Zagreb is the first with that value amounted to HRK 4.1 million. For comparison, the newly created value at entrepreneurship at the level of the Republic of Croatia in 2015 was close to 1.6 million kuna.

Comparison of the newly created value of the top 5 entrepreneurs by total profit in 2015

A EUROM DENIS MALOPRODAJA d.o.o.

B INTEKS PROMET d.o.o.

C PRODIS MALOPRODAJA d.o.o.

D A.D.S. d.o.o.

E PLAVA KUTIJA d.o.o.

* Newly created value of entrepreneurs at the level of HR.

Source: Fina, servis info.BIZ Nb: Prosjek = Average ; Iznosi u kunama = Amount in HRK

The Croatian toy market is almost entirely based on imports, and the oldest Croatian toy manufacturer is BISERKA PROIZVODNJA d.o.o. However, from the 500 items sold in the past, today the company only produces balls and some social games.

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The total income of BISERKA PROIZVODNJA d.o.o. In the period from 2008 to 2015

Nb: Ukupan prihod = Total income;

4 Regulations

As Croatia entered into European Union in 2013, the legislation about toys changed, to be in line with the European rules.

The biggest problem concerns toys imported from China and the Far East in general.

The area of safety and the safety of toys in the Republic of Croatia is regulated by the Act on General Use Items (Official Gazette 85/06), Law on General Product Safety (Official Gazette 30/09) and the Ordinance on the sanitary safety of toys (OG 115/08).

Toys are checked twice in Croatia. Once on import, and for the second time randomly, when the inspector decides. This applies to toys coming from non-EU countries, and toys from the EU have already undergone control in the Member State, so they are not reviewed at all.The border inspection at the entrance to the country is done by border inspection. Then the samples are analyzed by authorized laboratories.

Experts in the analysis seek various dangerous substances such as heavy metals, phthalates, n-nitrosamines, azo dyes, formaldehyde ... But that is not the end of control. A second level of control is carried out by sanitary inspectors. They locally "scan" the offer and take samples from the store shelves. They then submit them to authorized laboratories on the controls described above.

4.1 Declaration The declaration includes all writing, the trade name, brand name and / or protective sign, name and address of the manufacturer and / or legal or natural person who places the product on the market, name and address of the headquarters of the importer and the

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country of origin if the product is imported, prescribed toxicological and environmental labels, instructions for use when it is necessary for the proper use.

4.2 CE mark The CE mark is an abbreviation of the French word "Conformité Européenne”("European Conformity").

The CE mark shows that the product meets the essential requirements of safety, health and human life, protection of property, protection of the environment and protecting the public interest, the prescribed EU New Approach Directives. New Approach Directives specify the scope valid for new products placed on the market and the use for all products imported from third countries

Products marked with the CE mark and accompanied by a declaration of conformity have free access and movement across the markets of the European Union. CE marking on a product or manufacturer puts its authorized representative established in the EU.

Toys placed on the market within the declaration must be permanently and visibly marked with a warning about the potential dangers. This applies particularly to toys intended for children three years of age. Words and/or pictures show the internationally applicable signs for the age group the toy is intended (usually: for children up to three years).

Toys for young children:

Children should receive toys appropriate for their age because all the others can be potentially dangerous.

4.3 Size

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Toys for children under three years old and their components must be of such dimensions that they cannot swallow them, put them in the nose or ears.

Toys with a diameter lower than 30 mm should be avoided. Be careful if you have purchased toys containing small parts for an older child, as they may come into the hands of younger children… Design and construction Toys must not be sharp or have sharp/jagged edges that can hurt the child. The toy must not have holes between 0.5 and 1.2 cm, because they can get stuck in the child's fingers or toes. The toy must be stable enough and made of solid materials, so there is no danger that during the game any part separates from the rest. Flexible parts of toys must be additionally secured so as not to cut or have children's fingers clamped. The charging device, if any, must be contained in a separate inner bag. There is a possibility that, due to the weak seams on the toy, the child reverses filling and puts it in his/her mouth.

4.4 Materials The materials from which toys are drafted shall not contain ingredients that are harmful to the health of the child, they must be clean, not generate any mechanical pollution, must be made in a way that they can be cleaned and disinfected or boiled, if the toy is intended for babies, and that this does not change quality. Paints and varnishes applied to toys must not contain harmful allergenic chemical components or any which could endanger the health of the child. Cords and strings: The twine, cordage or tape on toys should not be longer than 22 cm, in order to prevent strangulation.

5 Festival of toys

Each year there is a Festival of Toys which takes place in Ivanić Grad (small town near Zagreb).The Festival of toys in Ivanic Grad became traditional meeting place for Croatian toy manufacturers who are trying to compete on the large market with a strong international competition.All information you can find on: http://www.tzig.hr/

6 Croatian manufacturer

Brick by Brick offers children the possibility to make fun while creating a game of their own, to develop their imagination and sense of locality, to exercise their psychomotor abilities

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and learn from practical experiences of their own. Only the Brick by Brick box opens the young constructors the door to the real world of architects, builders , structural engineers, project managers, tillers, traffic experts and many different jobs connected with building and designing houses, not forgetting the look and the traffic organization of the whole settlement. Kit-boxes ready to build wooden models of houses and other buildings contain natural materials only, alder- and poplar-wood pieces to be used for building, a water-based glue for wood, and a detail “building plan”.

When building the structure, young builders have to think a lot about each further step, which leads them to the conclusion that in the real world, there is no “undo” command, usual in the virtual world where most of nowadays children and adults spend so much time.

Tel.: +385 91 2800 331 info@brickbybrick.com.hr www.brickbybrick.com.hr

7 List of contacts

Damtex Medimurka D.o.o.Trg Republike 6, 40 000 ČakovecTel/Fax : +385 40 310 171Internet : www.damtex.hr E-mail : damtex@gmail.com Stimac D.o.oVukomerička bb, 10410 Velika GoricaTel : +385 1 6222121Fax : +385 1 6260460Internet : www.stimac.hr E-mail : stimac@stimac.hr Emporium d.o.o.Velika cesta 97, 10 020 Zagreb (Odra)Tel : +385 1 6254 600Fax : +385 1 6254 609E-mail: info@emporium.hrWeb : http://emporium.hr

Eurom d.o.o.Borongajska cesta 81a, 10000 Zagreb Tel : +385 1 230 70 00Fax : +385 1 230 73 00

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E-mail : eurom@eurom.hrWeb : http://euromdenis.hr

Astreja plus d.o.o.Karlovačka cesta 4j, 10 000 ZagrebTel: +385(0) 1 6622-246 / +385(0) 1 6622-247Fax: +385(0) 1 6622-245Email: info@astrejaplus.hr Web : http://astrejaplus.hr

KONZUM d.d.Marijana Čavića 1, 10000 ZagrebTel: +385 1 248 2222Fax: +385 1 248 2525Internet : www.konzum.hr E-mail : konzum@konzum.hr

LIDL HRVATSKA d.o.o.Ulica kneza Ljudevita Posavskog 53, 10400 Velika GoricaTel: +385 1 665 1950Fax: +385 1 665 1960E-mail : lidl@lidl.hrWeb : www.lidl.hr

SPAR Hrvatska d.o.o.Slavonska avenija 50, 10000 ZagrebTel : +385 1 241 0900Fax : +385 1 241 0975E-mail : info@spar.hr Web : www.spar.hr

PLODINE d.d.Ružićeva 29, 51000 RijekaTel : +385 51 352 825Fax : +385 51 374 184E-mail : plodine@plodine.hr Web : www.plodine.hr

MÜLLER TRGOVINA ZAGREB d.o.o.Nadinska 29, 10000 ZagrebTel : +385 1 379 4340Fax : +385 1 379 4362

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E-mail : service@mueller.hrWeb: www.mueller.hr Lapis d.o.o.Grožnjanska 10a, 52460 BujeTel : +385 52 773 599Fax : +385 52 773 602E-mail: info@lapis-buje.hr Web : www.lapis-buje.hr

IDA DIDACTAUlica biskupa Josipa Galjufa 5/II, 10000 ZagrebTel : +385 1 455 0311Fax : +385 1 455 0320E-mail : info@idadidacta.hr Web : www.idadidacta.hr

GRAFIKA-GRAFOPRINT d.o.o.Podreber 3, 10437 BestovjeTel : +385 1 337 1866Fax : +385 1 333 6112E-mail : info@grafika-grafoprint.hr Web : www.grafika-grafoprint.hr

USLUGA d. o. o.Kalvarija 16, 34550 PakracTel: +385 34 411 513Fax: +385 34 437 007E-mail : usluga@net.hr Web : www.usluga-pakrac.hr

PANEX - MIX d.o.o.Dr. Tome Bratkovića 1, 40000 ČakovecTel : +385 40 384 151Fax : +385 40 384 176E-mail : panex-mix@ck.t-com.hr Web : www.panex.hr

KAŠTEL LUKŠIĆ, PUT BLATA B.B.Tel.: +385 (21) 227-522, 228 - 087Fax.: +385 (21) 228 - 097

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E-mail: nird@nird.hr Web: http://www.nird.hr

MULTICENTAR ŠTIMAC Vukomerička 1b, 10410 Velika GoricaTel : +385 1 6222121 Fax : +385 1 6260460Email: stimac@stimac.hrWeb : http://stimac.hr

TINTILIN d.o.o.Sajmišna 2, ZlatarTel: +385 (49) 467 099Fax: +385 (49) 500 134Email: tintilin@tintilin.hrWeb : http://www.tintilin.hr

TRGOKOOP – ZAGREB d.o.o.Podsusedska aleja 3, 10090 ZagrebTel : +385 1 3490 593Fax : +385 1 3490 806Email : trgokoop.zagreb@gmail.com Web : http://trgokoop-zagreb.hr

MALI DVORI d.o.o.Brezovička cesta 85c, 10257 Brezovica, ZagrebTel: +385 1 6537 108Fax: +385 1 6537 108Email: info@malidvori.hr Web : http://malidvori.hr

SUVENIR ARBOR VITAE d.o.o.Stjepana Radića 74, 43541 SiračPhone: +385 43 322 126E-mail: info@suvenir-arbor-vitae.hr Web: www.suvenir-arbor-vitae.hr

USLUGA d.o.o.Kalvarija 16, 34550 PakracTel: (+385) 034/474-027Mob: (+385) 098/256-283 E-mail: usluga@net.hr, usluga.pakrac@gmail.comWeb: http://usluga-pakrac.hr

Naj-Domus d.o.o.Bani 56/I, 10010 Zagreb-BuzinTel: +385 1 66 41 399; 01 66 09 408

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Fax: +385 1 66 09 409Email: prodaja@naj-domus.hr Web: http://www.naj-domus.hr

In Media Grupa d.o.o.Tel: +385 51/227-528Email: info@ingames.hr Web: http://ingames.hr

Eurom Denis Maloprodaja d.o.oBorongajska 81 a, 10 000 ZagrebWeb: http://euromdenis.hr

M San Grupa d.d.Buzinski prilaz 10, 10010 ZagrebTel: +385 1/6690 723 Mail: MSan_Toys&Baby@msan.hr Web: http://www.msan.hr/Default.aspx?tabid=993

Astreja plus d.o.o.Karlovačka cesta 4j10 000 ZagrebTel: +385 1 6622-246 / +385 1 6622-247Fax +385 1 6622-245Email: info@astrejaplus.hr Web: http://www.astrejaplus.hr/o-nama

NirdKaštel Lukšić, Put blata b.b.Tel.: +385 (21) 227-522, 228 - 087Fax.: +385 (21) 228 - 097E-mail: nird@nird.hr www.nird.hr

ToyBoxMedarska 80, 10 000 ZagrebTel: +385 1/65-60-509Fax: +385 1/65-60-509http://www.toybox.com.hr

IDA DIDACTAUlica biskupa Josipa Galjufa 5/II, 10000 Zagreb Tel: +385 1 / 4550311Fax: +385 1 / 4550320

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Email: ida-didacta@zg.t-com.hr , info@idadidacta.hr http://www.idadidacta.hr

BabylandWestgateTel: +385 97 65 55 888 Email: info@babyland.hr Web: https://babyland.hr/?gclid=Cj0KEQjw2-bHBRDEh6qk5b6yqKIBEiQAFUz29ndYwcloybJj_Bu3vWytFbP12dE40OO9a5V99lRc6RQaAtnt8P8HAQ

APOLLO HR d.o.oPustodol Začretski 19a, 49223 Sveti Križ ZačretjeTel: +385 49 658 260Fax: +385 49 658 270Email: info@apollo.hr Web: www.apollo.hr

Orbico d.o.o.Ulica Kreše Golika 1, Susedgrad, 10090 ZagrebTel: +385 1 3444 800Fax: +385 1 3444 805Web: http://www.orbico.hr/brandovi/category/toys

KB d.o.o.Ul. Vilka Novaka 6, 42 209 Sračinectel: (+385) 42/ 215 777fax: (+385) 42/ 215 778Email: k-b@k-b.hr Web: https://www.k-b.hr/o-nama/

MEDIA-COMMERCE d.o.o.Majstorska 5, 10 000 Zagreb,Tel 1: +385 91 232 7365Tel 2: +385 91 232 7383Fax: +385 1/2406-499Web: https://www.magicbaby.hr

Bubamara sve za djecu d.o.o.Pustodol Začretski 19 a, 49 223 Sveti Križ ZačretjeTel: +385 (0)1 7788553 / +385 (0)99 264 3390Email: info@bubamara.in Web: http://www.bubamara.in Bima-shopInternet trgovinaTel: 042/ 208-334 / 099 645 7976Email: info@bima-shop.hr

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Web: http://bima-shop.hr

Točka Sna d.o.o.Isce 17a, 10000 Zagreb Tel: 01 46 45 026Fax: 01 46 45 027E-mail: info@lafaboo.com Web: http://lafaboo.com

Rox d.o.o.Slavonska avenija 100, 10 040 Zagreb, HrvatskaTel: +385 1 2040 900Fax: +385 1 2040 920Email: info@rox.hr Web: www.rox.hr

Pluramaks d.o.o.Šibička 36, 10 290 Šibice - Zaprešić (Exclusively webshop)Tel: +385 1/56-121-09Web: http://www.pluramaks.com/shoppingcart/

Male starvniRemetinečka 5A, 10020 ZagrebTel: +385 1 48 46 461Email: shop@male-stvari.hr Web: http://male-stvari.hr

Internet Mall d. o. o.Ulica kneza Branimira 28, 10040 ZagrebTel: +385 1 670 0321Email: info@mall.hr Web: https://www.mall.hr/bicikli-bez-pedala-guralice?gclid=Cj0KEQjw2-bHBRDEh6qk5b6yqKIBEiQAFUz29rbTL1_jsr8tejqutoIvrF0GX8SjvFvcGQe-5z5Ujt0aAv2W8P8HAQ

Svijet BebaAv. Dubrava, II Poljanice 6, 10 000 Zagreb, Mob: +385 91 55 43 444,Tel: +385 1 2917 999,Fax: +385 1 55 99 777,Email: info@svijet-beba.hr Web: https://www.svijet-beba.hrA007 d.o.o. (Agrokor groupe) Marijana Čavića 1a10000 ZagrebTel : +385 72 007 007

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Web: https://Abrakadabra.com

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