31 March 2004
Small Items Big Business(HKTDC Gifts, Premium & Stationery, Vol 02,2004)
Items Big Business
Hat, New Hat
Kingin Industries Ltd
|Kingin Industries Ltd produces a wide spectrum of gifts, premiums and stationery products including novelty key chains, ballpoint pens and souvenir items|
Kingin Industries was established 38 years ago by the father of present manager Alex Chiu. The firm started with plastic injection moulding machines, mainly producing key chains. Today it is more diversified, Chiu says, "In those days, as a key chain maker, you could concentrate on a single product line and still make a living."
Chiu also recalls that the only raw material used was plastic. "It was about 20 years after father started the business that customers asked us to do other kinds of products, using magnets for example. And later again, we started to get involved in stationary items."
The company now employs 600 workers at a plant in Dongguan in Guangdong Province on the Chinese mainland. Kingin also remains a major supplier of key chains. The business is supported by items of glassware, picture frames and ceramics, besides specialised printing on pencils and ballpoint pens.
The US is the major souvenir market, followed by Europe, Australia/New Zealand, Japan and Singapore. "Our lead market is now the US, whereas previously it was Canada," says Chiu. "Our roots in Canada go back to the days when a client there wanted Lucite (now called acrylic) key chains. These were being made in Europe at the time, but were very expensive and the delivery time was also long. He provided us with a prototype and asked us if we could develop them."
Chiu observes that today's market changes very fast. "Also, the trend with overseas customers is to carry less inventory while maintaining demand for more items. This means that lead times are often very short," he adds.
"In the past," he recalls, "customers would come to Hong Kong in October and expect shipment after Chinese New Year, which would be the following February. They would also usually stock up for three or four months."
Technology has also had a big impact. "When we used the telex, replies would arrive a week after sending out a query. There were also more traders in the supply chain, and the pace was generally more leisurely. Today, it is head-to-head business, and customers place orders direct with us and expect responses within a matter of hours."
Similarly, he adds, there is more competition now and this means doing something different to stay ahead. "This goes for factories, customers and importers. Once, price was the most important factor. Today, it is quality, product variety, fast deliveries, fast responses, good feedback and price."
To cope better, the company has set up an Electronic Resource Planning (ERP) system in Hong Kong and the mainland. "Certainly, our operations in Hong Kong are more advanced because the mainland still relies a lot on paperwork, although things are changing. Automation, for example, is much easier to install in Hong Kong. There is a lot to be integrated. The shipping needs arranging, forwarders have to be kept in the loop, and email communications handled - all to ensure giving customers faster responses.
"In Hong Kong, all of these tasks are easier to manage as the work flows more efficiently and everything is easier to coordinate. On the mainland, it is also possible to operate an ERP system but it takes much longer to set up because of the training required."
In terms of business strategy, the most pertinent question for Kingin is whether or not the customer is interested. "We operate more along the lines of doing what the customer wants, rather than conducting independent R&D and then trying to sell an idea. So we tend to meet customers' requests. However, we also attend exhibitions and trade fairs to generate new business, and we advertise in magazines such as Hong Kong Enterprise," Chiu adds.
Apart from ever-present competition, Chiu says the cost of resins is a headache. "Resin prices are very unstable while paper products are also costly. So cost is the number one problem. As for competition, we see it as stimulating us to achieve more and make better products."
BY CAROLINE BIEBUYCK
Kingin Industries Ltd
|Hong Kong Buyers Request Form||Overseas Buyers Request Form||More Publications|