17 June 2004
Small Ideas Big Results(HKTDC Electronics, Vol 03,2004)
Vol 3, 2004
Small Ideas Big Results
Sino Spark Electronic Ltd
Central to Sino Spark Electronic Ltd's success is its ability to spot trends and move quickly to ensure the company keeps abreast of changing tastes
The products on display at the offices of Sino Spark Electronic Ltd may be tiny, but they certainly pack a big punch in the international marketplace.
"It's a palm phone," explains marketing manager Alvin Yu, showing a device the size of a large wristwatch that can replace a standard telephone before producing a midget stereo speaker that plugs into any MP3 device.
"A company like ours can't compete with big manufacturers producing proper phones or DVDs, so we have to be gimmicky and capture the niche market," he maintains.
Sino Spark was established in 1991 when the founders saw a trend in sound cards. "Creative Lab's sound card had just emerged and created an enormous demand for multimedia speakers," he recalls.
Sino Spark's multimedia speakers sold "extremely well" until 1995, when numerous mainland manufacturers started producing the same thing at the same time. "This cut our profit hugely," Yu admits.
It was during this difficult time that the company founders discovered computer accessories were starting to become very popular. "We went to visit trade fairs in the US and started making computer microphones," he notes.
These proved another big hit with individual orders of up to 100,000 units initially selling at US$4 each, half the price of those made in the US.
This successful track record confirms Yu's belief that his company's strong points lie in cost control and being able to keep abreast of market trends around the world.
"Once a trend is spotted, we move quickly to design and produce new products, ensuring we always stay a step ahead of our competitors," he claims. "Take the palm phone, which we adapted in 1998 to become the first company in Hong Kong to manufacture this product."
Sino Spark also spotted the MP3 trend early and created tiny plug-in stereo speakers, selling at about 20,000-30,000 pieces a month, and have just sighted another potentially winning trend in Europe - classic wooden clock radios.
The company manufactures this nostalgic product under its own Winex brand name by fusing a modern digital clock and radio into a hand-finished wooden case, and sells about 5,000-7,000 sets a month.
"It takes about 30 days just to do the wood finishing," explains Yu, adding that this not only makes the radio look nice, but also keeps copycats at bay.
This painstaking approach is also an important strategy in helping the company protect its intellectual property, Yu adds, noting that Sino Spark's 3-in-1 AM/FM Radio Telephone with Photo Frame has been selling steadily but has not been copied to date.
The company outsources the external design of its products, but takes charge of the overall design concept and internal electronics before they are manufactured at a 500-worker, 60,000-square-foot plant in Shenzhen on the mainland.
The US used to be Sino Spark's biggest market, but now Yu says the Americans have improved logistically and do not keep a large inventory, which has cut down the size of orders.
In recent years, Sino Spark's major market has shifted to Europe as the euro has continued to strengthen. "Our German client, for example, will not only sell in Germany, but will also re-sell to Eastern Europe," Yu notes. "Our older, bigger speakers fit the markets there."
The US market continues to rank second in importance for Sino Spark, followed closely by Japan. "It would also be good to tap the mainland market," Yu admits.
Sino Spark markets its products at leading trade fairs such as the Hong Kong Trade Development Council's Gifts and Premium Fair in late April and the Hong Kong Electronics Fair in mid October, which undoubtedly helps their small gimmicks constantly produce big results.
WRITTEN BY CAM CHEUNG
Sino Spark Electronic Ltd
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