31 March 2005
Staying Ahead(HKTDC Enterprise, Vol 04,2005)
"While most manufacturers have increased the labour content in the past two decades, we have solid reasons for cutting costs in this area," says Eddie Cheung, one of the company's three partners.
"First, stricter factory procedures have seen a marked increase in productivity. Second, extensive mechanisation and automation has cut the need for labour. Third, very obviously there has been a downturn in business. Fourth, and probably most important of all, copycat manufacturers have cost us dearly," he explains.
Despite these difficulties, C&L, marketing under its own Galason brand name, still does healthy business in the US, Europe, South America, Asia and the Middle East ... "even Pakistan", adds Cheung.
C&L specialties today are LCD clocks and watches, timers and calculators, stationery and gift and premium items. "Our business strategy can be summed up in a few words," says Cheung. "Good quality, reliability, punctuality and honesty - especially honesty."
He says that buyers frequently entrust C&L with large US-dollar deposits because they know from experience that they will get exactly what they ordered, delivered when they want it. "Sometimes these deposits amount to very considerable sums of money, and it is a compliment to our integrity that we are entrusted with so much."
The company designs, manufactures, inspects and packages all its products in a modern three-storey factory. Most of the assembly processes involve different types of machines imported from Japan, Taiwan and the US.
"We can guarantee top quality because everything is done under the one roof and goes through stringent quality control before being passed for shipment," claims Cheung.
Easily the biggest selling item is a cute car watch, comprising a toy car (about 21/2 x 11/2 inches) with an LCD watch beneath the lift-up bonnet and flashing headlights accompanied by any sound the customer may want: a roaring motor, siren or whatever.
"This is one of our oldest items, the production going back about 12 years or more, yet it remains a hot seller, especially at gas stations and fast-food outlets," says Cheung. "We have sold millions of these watches, and I am confident we will continue to do so."
A more recent, just-as-hot item was C&L's Pendulous desk set comprising a memo pad, LCD clock and magnetic pen. Two recent orders for 150,000 sets of this promotional item filled 15 TEU containers. "While this is another highly popular item from our line, we are aware we cannot hit the jackpot every time," Cheung muses.
Cheung says the problem of copying by unscrupulous firms has grown to such proportions that he no longer hesitates to take legal action against any factory copying the company's exclusive designs.
"We have successfully prosecuted quite a few rule- breakers," he emphasises, "and have not only been awarded damages but have also won court orders compelling the offenders to destroy both their fake products and the moulds used to make them."
Unfortunately, new transgressors appear. "Other factories pick up the slack and so we are consistently plagued," he says ruefully, "and even now we have several more cases waiting to go before the courts on the Chinese mainland. We retain legal firms in Guangzhou and Shenzhen to take immediate legal action against offenders. This costs us a lot of money, but if we don't protect ourselves no one else will and we will suffer even greater losses. Not only that, if we don't crack down it will encourage others to try their luck."
Cheung takes pains to point out that these unscrupulous manufacturers create a pernicious cycle that ruins business for everybody.
"Because they need to undercut prices, they in turn can only make a profit by producing cheap and trashy copies," he says.
"They rarely deliver shipments on time and, when customers discover the poor quality products, they just make excuses and go back on their promises to provide proper after-sales service and back-up."
He says the net result is that both the agent and the customer go completely sour. "The original design and product remain worthwhile, but its image and reputation have been spoiled so nobody wants to try and market the goods anymore. It's a vicious circle that is heartbreaking to anybody who has built up a reputable business such as ours."
On a happier note, Cheung says C&L will continue to forge ahead with creative new designs and cutting-edge technology.
WRITTEN BY GEOFFREY SOMERS
C&L Elegance Mfy Ltd