7 Dec 2004
Brand Retains Control(HKTDC Enterprise, Vol 12,2004)
Skyworth Overseas Development Ltd
Skyworth started out assembling remote control units for manufacturers of television receivers. "As we were located on the Chinese mainland, we also kept a keen eye on that market," says Yu. "We had always believed the mainland would offer great opportunities and luckily our chairman had excellent contacts there."
According to Yu, there were several valid reasons why the firm did not immediately attempt to promote the Skyworth name overseas. "While we coped well locally, to start on overseas markets at that time would have required a lot more manpower and a lot more money," he says.
Despite these teething problems, the Skyworth brand did gradually grow in prominence. "We simply persevered," says Yu, "and we did so well with our initial sales and marketing efforts that after a few years we decided to make the effort to develop the brand overseas."
That was not an easy task, he recalls, "especially considering that we were almost completely unknown outside of Asia and that most of the customers who did contact us preferred to use their own brand names."
After assessing the costs of high-profile campaigns, Skyworth decided to tiptoe into the marketing and advertising world. "We understood from the outset that we could not compete with giant manufacturers of consumer products located elsewhere in Asia who could afford to spend millions of dollars on television advertisements," says Yu.
"Our initial approach was to use minimum resources to push the brand. First, we placed modest commercials on mainland stations and then worked progressively throughout Asia so that the highest audience got to see the brand name."
This approach paid dividends with the advent of satellite broadcasting throughout Asia. "Our modest adverts were now reaching a huge audience, and as more people became aware of our products so they became easier to sell elsewhere," says Yu. "Overseas businessmen, for example, soon learned that Skyworth was the leading mainland brand and became more interested in doing business with us."
The marketing budget also went into low-cost placements in newspapers, signage at airports and subsidising sales promotions at independent chain stores. "We also advertised in consumer magazines and managed to gain extra coverage from some of our more specialised products," says Yu.
"As our business grew along with the range of products we offered, so it also became easier to market the brand. A brand has a larger market presence when it represents a complete range of products - from mobile phones to digital cameras and television receivers - and it helps to make special promotions more cost-effective."
The early hard work paid off because today many people are interested in handling the Skyworth brand. "However, we continue to adopt a careful approach. We do not attempt to do everything ourselves because each country has its own culture and character. We try to cooperate with local people through joint ventures and to profit together. We use this method both in Asia and the US," Yu adds.
Today, 15 years on and successfully listed on the Hong Kong stock exchange (in 2000), Skyworth mainly produces television receivers, including CRT and LCD versions, and a limited number of projection models. Skyworth also manufactures audio and related products like DVD players, automobile DVD players and so on.
"From the beginning of 2003 till now, we have sold about eight million TV sets around the world," says Yu. "Our main market remains the Chinese mainland, where we have sold about six million sets in that time."
In the Greater China market, including Hong Kong, the company sells all of its products under the Skyworth name. It also sells to Japanese OEMs in Hong Kong.
"In our overseas markets, almost 90% of our products are ODM, OEM and private labels, with the Skyworth brand accounting only for about 10%," says Yu. "However, if we can repeat our mainland experience on a worldwide basis then we are well set for the future."
That claim, he adds, is supported by a professional approach to engineering, quality and marketing.
WRITTEN BY TONY HENDERSON
Skyworth Overseas Development Ltd