11 July 2008
Cosmetic Appeal(HKTDC Fashion - Leather Goods & Bags, Vol 03,2008)
Strong links to the cosmetics industry via global clients such as Clinique, Wella and Biotherm have given Hoi Fat Handbag Fty a firm foundation for a diversified business manufacturing high quality bags.
A family company, Hoi Fat has steadily increased its product range since its establishment and has built a lengthy list of long-term clients by promoting its services simultaneously in several major international markets.
"Our company was established by my father and has continued into the second generation with me and my two brothers," explains Manager C. K. Chung, adding that the company originally manufactured in Hong Kong, and moved to China around 1990.
Today Hoi Fat produces cosmetics, toiletry, school and cooler bags, as well as handbags, wallets, pouches, frame purses, organisers, phone cases, rucksacks and soft cases for sports equipment and musical instruments.
The list continues to grow as the company undertakes OEM and ODM projects. "We have many big customers in Europe, especially in the cosmetics area, including L'Oreal and Lancome," Mr Chung notes.
Hoi Fat also does business in North and South America, Japan and Australia, with production driven by client demand courtesy of a flexible manufacturing policy that enables the company to move quickly into new product areas when requested.
Its diversification into cooler bags, for example, was prompted by the needs of a single client in Australia where there is a strong demand for that product, while an American customer's request for guitar cases led to Hoi Fat's interest in developing a line of bags for musical instruments.
Small bags ordered for promotional purposes remain the core of the company's business, however. "It doesn't matter if the customer is large or small, we're interested in doing business with them," Mr Chung maintains.
"Because of the size of our factory we can be more flexible, but because our main products are a mini style of handbag and cosmetics bags, our main target customer is promotional."
The company's factory in Shenzhen on the Chinese mainland is staffed by about 200 workers. "We have two production lines in the factory, and a sample-making department that can develop many different styles according to customer requirements," Mr Chung explains.
Customers usually give Hoi Fat a design from which to make the sample, and the firm reverts to them with a quotation. "Generally our customers want their own designs, although we do offer a design service," Mr Chung adds.
Materials are now purchased mostly in China because, according to Mr Chung, suppliers are now competitive in terms of cost and quality.
"We use nylon, polyester, canvas, PVC and PU, and also some leather as trim," he explains. "We can produce about 50,000 handbags per month and around 150,000-200,000 simple cosmetics bags."
Prices depend on the size and complexity of the order, and range from less than US$0.50 for a basic cosmetics bag to more than US$10 for some handbags.
Orders can range in size from several hundred units to more than 100,000, Mr Chung notes. "Delivery normally takes 30-45 days, but a very large order might take around 60 days," he explains. "Our minimum order is 500 for cosmetics bags - although orders for fashion bags can be smaller."
He stresses that quality control is a Hoi Fat priority, with the company achieving ISO 9001 certification three years ago, and some major clients also audit its factory for manufacturing quality.
"Our whole operation benefits from that client scrutiny," Mr Chung believes, adding that Hoi Fat underwent both Disney and Wal-Mart assessment procedures in 2006 and was authorised to manufacture products for both multinationals.
Ultimately, Mr Chung would like to see Hoi Fat move more into original design work, but he acknowledges that it is "a long path" to that goal.
"We stress to customers that we are in the business of delivering quality," Mr Chung says, noting that there are many factories in China offering very cheap prices but insisting that Hoi Fat's strategy is to focus on customer service and delivering real value.
"We want to develop more in the promotional area for big corporate clients who want repeat orders, but we're still interested in smaller business and in developing new product lines because diversity has served us well."
TEXT BY ROBERT PIERCE