21 Jan 2005
Enter The Jade Dragon(HKTDC Fashion - Leather Goods & Bags, Vol 01,2005)
Jade Dragon Group Co Ltd
"Design and quality are the keywords," insists business development department manager Kat Lui. "We're not in the business of competing on price."
She adds that Jade Dragon does undertake some OEM work, but most customers keep coming back to the company for its entrenched Babila brand.
"We also have two other brand names, Rosettia and Jade Duck, which is an older brand name," Lui reveals. "Rosettia has a very feminine style, while Babila has more of a European feeling."
The company's retail chain has more than 10 outlets in Hong Kong, and it is working to expand its presence both in the city and on the Chinese mainland.
"We plan to open shops on the mainland early in 2006," Lui reveals. "The ultimate aim is to have around 30 retail outlets there, but this year is devoted to planning and preparation as it's a big project."
Notwithstanding its high degree of control over both the manufacturing and marketing of its products, Jade Dragon is very much aware of the benefits of outsourcing.
Much of its design work is subcontracted, and although it owns its Dongguan factory on the mainland it also has associate relationships with other manufacturing facilities that meet its rigorous quality control standards and allow flexible monthly production.
"We work mainly with factories in Guangdong Province so we can maintain quality," Lui explains, "and we work mostly with freelance designers so we can get a greater range of styles and concepts."
Jade Dragon introduces new designs every month to meet the demands of more than 95% of its customers. "It's rare for clients to give us designs, because they can usually find what they want here," Lui claims, adding that Jade Dragon also manufactures belts, wallets and luggage in addition to fashion handbags.
About 40% of the firm's production is exported each month to Europe and Australia, where the company has longstanding relationships with customers.
"We don't have shops in Europe, but we have customers in France, Italy, Latvia and Scandinavia," Lui explains. "We also do some business with Japan."
According to Lui, the company exports relatively little to North America, mostly because she believes buyers there are more concerned with price than quality and the company is unwilling to reduce its margins or compromise the integrity of its products.
"We're middle market," Lui proclaims, noting that FOB Hong Kong prices for most bags are between US$5 and US$8, depending on materials, quantity and workmanship.
"We have more expensive items and we are flexible on design, materials and pricing, but our aim is to be the best in our area, not the cheapest."
Jade Dragon is experienced in working with both real and synthetic leathers - so much so that according to Lui some customers believe that they are looking at genuine leather when they see PVC samples.
"We source the PVC in Taiwan, Korea and the mainland, and sometimes Japan," she explains. "Previously, we bought a lot from Italy, but the price was too high because of the strength of the euro and the Korean and Taiwanese quality is good."
About 30% of Jade Dragon's production still involves genuine leather, and demand for the material is on the increase according to Lui.
"Right now soft bags are very popular," she says. "In design terms we think simplicity is best - just some special stitching or little flowers for ornamentation."
Metallic finishes are coming into style, and consumers are also interested in brighter colours rather than traditional black and burgundy. "Because our brand is aimed at people aged about 30, customers are looking for a mature, elegant style," she adds.
Turnaround time for orders depends on whether Jade Dragon already has the raw materials in stock or has to buy them for the production run. "If we have the materials, orders take around 30 days to process but it takes 45-60 days if we don't," explains Mui.
She adds that orders are generally based on container loads. "One container will take around 4,000 bags," Lui explains, adding Jade Dragon occasionally handles orders for half a container load if production capacity allows.
With Babila already well established in overseas markets and beginning to make its mark on the mainland, the future certainly looks bright for Jade Dragon. As Mui says, "It's all a question of quality and design."
WRITTEN BY ROBERT PIERCE
Jade Dragon Group Co Ltd