11 July 2008
Classic Carries(HKTDC Fashion - Leather Goods & Bags, Vol 03,2008)
Splendid Products Mfg Co has lived up to its name by consistently offering "innovative creations at competitive prices" for more than 25 years, claims Managing Director Thomson Lam.
Established in Hong Kong in 1983, Splendid Products was originally a trading company, dealing in garments and accessories as well as bags. "However, as China changed we began to diversify into manufacturing," Mr Lam recalls. "Originally, we had a small factory in Hong Kong, but costs rose rapidly and about 10 years ago we set up our own China factory."
Splendid's Shenzhen factory has ISO 9001 certification because, he insists, quality assurance is important and provided the impetus for the factory's initial establishment. "Originally we were subcontracting to other factories, but we found that they could not do exactly what we wanted," Mr Lam explains.
This stumbling block was partly a matter of quality control and partly a matter of clients, as Europeans in particular wanted certain assurances with regard to the employees' working conditions. "So in the end we decided to take on the manufacturing ourselves," he states.
The facility offers Splendid not only the desired manufacturing quality and working conditions, but also a considerable level of customer service flexibility.
"We have an output of about 200,000 bags per month from four production lines, so we can do a lot of different things," Mr Lam assures, noting that the firm has modernised "a lot" and introduced automation wherever possible in order to cut labour costs. "We're lucky because we have quite a lot of experience so we can adapt to change."
Over the years Splendid has narrowed its diverse product range and decided to specialise in particular lines, which include cosmetics, toiletry, tote, travel and children's bags, as well as fashion handbags.
Production is divided between the company's own Classics, Sports Classic and Essential Traveller brands, and a healthy OEM/ODM business with a solid base of long-term clients.
"We use a lot of different materials such as cotton, PU, PVC and nylon, most of which we purchase in China, although we also import from Korea and India," Mr Lam explains. "We sometimes use leather as a trimming."
Creative thinking has given the company a competitive edge, and it has begun to offer its own brands to clients who require good quality merchandise but don't have their own trade mark. "More than 80% of our business is customer brands," Mr Lam says.
Splendid is "strong" in the UK, Australia is quite "good" and the company also has some business in America, the Philippines and Indonesia. "The last two markets usually buy our own collection," he adds.
He says Splendid competes on quality and service rather than price, but insists that the company's bags are nevertheless excellent value for money, with FOB unit prices ranging from US$0.50-6.00.
A key factor in Splendid's ongoing success is its long-term customers. "It is very important to build those relationships," Mr Lam insists. "We work in partnership with our clients, so if a problem arises we'll try to solve it together."
He admits that Splendid can't compete on low-end prices, so the company relies on quality design and service, and catching trends. "We'll also handle packaging for customers, which saves them costs," Mr Lam adds. "Delivery normally takes 45 days, although in an emergency we can manage it more quickly."
Given that it is competing in a trend-driven business, Splendid is acutely aware of the need for fast responses to customer needs and supplying bags that are consistent with the very upmarket image of many of its clients.
"We have a lot of demand from cosmetic companies, and they are very concerned about quality because it reflects on their image," Mr Lam observes. "Sometimes they will select products we have designed and sometimes they give us a design."
Having moved from product sourcing to manufacturing, he says Splendid is now more than content with the niche it occupies. "We're happy with the scale of the factory at the moment - not too big and not too small," Mr Lam concludes. "We're focusing on design, and trying to develop more high-end products because we think that's the future.
TEXT BY ROBERT PIERCE