1 Jan 2001
Kai Fat Brush Factory Limited (HKTDC Gifts, Premium & Stationery, Vol 01,2001)
Export Marketing Award
KAI Fat Brush Factory Limited is Hong Kong's leading brush and comb manufacturer and exporter. Established in 1985, the company has always aimed at the export market - more than 99% of sales are to overseas customers. Some 65% of these customers are located in the US, and around 20% in Europe.
While it has always been in the export business, in recent years Kai Fat has changed the way it does business. Up to six years ago, as with most Hong Kong manufacturers, Kai Fat relied heavily on local trading companies to act as intermediaries in processing overseas orders. Only a small proportion of the company's export sales were made directly.
Kai Fat's president, Jack Tsui, felt this situation had to change and from 1994 the emphasis shifted to direct dealings with overseas customers. "Our export business became more effective and efficient," Tsui says. "We cut transaction costs by eliminating the middleman. But just as importantly, we established direct communication channels with our customers."
This change has had a direct impact on the company's turnover, which has grown by a steady 10% per year since 1995. "We achieved this growth even through the Asian financial crisis," export manager Ricky Law says proudly. "It's also down to our direct trading. Good direct contact with customers means they learn to rely on you. We've found the critical elements of our success have been the upgrading of both the quality of our products and our service, and this has increased our competitiveness."
Tsui adds that an important turning point was applying for ISO 9002 (in 1998, Kai Fat was the first Asian brush manufacturer to be awarded this certification). "Our aim was to update the quality of our systems and management," he says. "What's important is the philosophy our people bring to their job. We realized we needed to connect better with the world - part of that is achieved by upgrading to global standards."
Law feels maintaining top-quality customer service is an integral part of this philosophy. "Our customers face keen competition in their markets," he says. "We have to support them in all aspects of our service. That means being quick, accurate, competent, delivering on time and offering solid advice."
Customers obviously like the support they receive from Kai Fat. Today the company counts Revlon, Vidal Sassoon and L'Oreal among its clients.
Part of the company's strategy revolved around improving production capabilities. Having leased manufacturing premises since it started business, Kai Fat moved into its own purpose-built factory in Dongguan, on the Chinese mainland, in early 1998. The original plant covered 180,000 square feet; a recent extension has expanded total floor area to 240,000 square feet. The factory employs more than 1,000 staff.
The new premises have resulted in not just an increase in turnover, but have allowed Kai Fat to produce many more items than before. The company now manufactures more than 10,000 items (compared with about 2,000 in 1997), and adds 6-7 new lines to its range each year.
Kai Fat wants to consolidate its position in its main market. "We currently have around 12% of the US market - we want to see this increase to around 20% in a couple of years," says Tsui.around 20% in a couple of years," says Tsui.
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