8 July 2005
Electronic Premiums(HKTDC Gifts, Premium & Stationery, Vol 03,2005)
For instance, noting that not all premiums fall in the lowest price bracket, Ikonee Int'l Ltd creative director Samuel Yeung does say that they must be manufactured within tight cost limits.
"Our niche in the electronic premiums sector is not at the low-end, and we try to provide good looking products with lots of appeal - things that are different and special," he says. Established in 1999, Ikonee's range includes LCD alarms, clocks with lights and melodies and nifty nightlights.
Passionate about design, Yeung says that Hong Kong must make strides to be as creative as Europe. "At the same time, of course, we must also focus on the fact that we are producing gifts and premiums, and ensure that our designs fill that criteria."
Ikonee's strategy is not to compete on price. "We prefer to concentrate on good designs and value for money," he declares. "It is important to be highly creative because there are too many competitors waiting to try and copy successful products."
He says opportunities will arise as larger manufacturers are now less interested in small radios, tending to move more into the high-end with upmarket gift items. "This mobility leaves the low-end more open," he says. "However, firms on the Chinese mainland are very strong at the low-end and so we in Hong Kong should concentrate more on our OEM capabilities, quality and service."
The minimum order size is 1,000-3,000 pieces per model and delivery time is 30-45 days. Major export markets are the US, Italy, France and Japan, and production takes place at a 300-worker, 3,000-square-metre factory in Shenzhen on the Chinese mainland.
A company with a wide range of products that make attractive electronic premiums is Dorpo Industries Ltd, established in 1982. Despite the firm's long experience as a manufacturer, it admits that fierce competition and illegal copying are making life difficult.
"It is becoming harder to compete," says sales manager Roman Leung. "Too many players in both Hong Kong and the Chinese mainland are forcing prices down. As long as there are buyers who are not fussy about the quality of electronic premiums, they will find suppliers. Some mainland firms are able to sell at prices lower than our costs."
He says that certain products, such as pen radios, which are certainly not new, are available from numerous producers on the mainland. "The result is very low prices, which is why we stopped producing them."
He feels the answer is to concentrate more on OEM projects. "We now do anywhere from 50%-70% OEM work, and we have started making items that are more hi-tech and difficult to assemble to keep them more exclusive."
A typical example is Dorpo's waterproof thermometer with clock that has a patented design. "We patent a lot of products, despite the high cost in legal fees, because if a big retailer wants to buy a large quantity, say 50,000-100,000 units, they want protection and do not want to see their competitors offering something similar," Leung explains.
Dorpo's minimum order is 5,000 pieces per item and delivery time is 30-40 days after confirmation of order. The company supplies a worldwide market from its factory in Guangdong Province on the Chinese mainland that employs 400-500 workers.
Also active in the electronics premiums and promotional items sector is 1993-established Profit Charm (Far East) Ltd. "Good-selling items this year include the various types of vacuum cleaners we make," says director Joe Wong. "We plan to ship more than half a million car vacuum cleaners this year, mostly to the UK and the US. These are high quality gift items, yet we can put them on the market at about US$2 each FOB Hong Kong. Our highest-priced item in this line is just below US$10."
Wong says Profit Charm also produces a similar item used as an ice and snow remover and intended for Scandinavia and other wintry places. "We also have a cappuccino maker that sells at US$0.80-0.90 per piece, and our coffee company clients use them to promote their products," says Wong.
Profit Charm's minimum order is 10,000 pieces and delivery time is 35 days after order confirmation and receipt of a 30% deposit. Major markets are Japan, Europe (including the UK), and the US. Production takes place at a 700-worker, 20,000-square-foot factory in Dongguan on the Chinese mainland.
Meanwhile, 1978-established Harvest Way Ltd manufactures a wide range of electronic premium items such as pop-up alarms and reminders, vases with FM radios, voice recorders in assorted shapes and clip-on belt carabiners with ultra-bright LEDs.
While mostly of the production is sold as gift items, the company still finds the market tough going. "Although we do register our designs, it is still hard to stop a determined competitor from copying our products," laments marketing manager Cora Tse. "The registration procedure takes time, but it's something we have to do to try and protect ourselves."
Harvest Way's minimum order requirement is 2,000 pieces per model for delivery 30 days after confirmation of order. Exports go to the US and Europe, and production takes place at an ISO 9001-, EN 46001- and ISO 13485-certified plant in Shenzhen on the Chinese mainland.
Clearly, demand for electronic premiums keeps all these makers in business - stimulated by value-added designs from OEM clients.
WRITTEN BY TONY HENDERSON
Dorpo Industries Ltd