5 Aug 2008
Firm Foothold(HKTDC Fashion - Footwear, Vol 02,2008)
Ladies', Men's & Children's Shoes
The shoe may pinching hard for manufacturers given the rising production costs and price pressures, but Juniper Industrial (Rising) Ltd is putting its best foot forward to meet the challenge.
"It's tough. Things are so tight we're barely covering outgoings," remarks Patrick Fuk, Director of the Hong Kong firm which produces on the Chinese mainland a range of ladies', men's and children's footwear, including casual and dress models as well as soccer and hiking shoes.
"The cost of everything's gone up, including the value of the Chinese yuan," Mr Fuk explains, adding that labour and materials costs continue to surge while buyers are trying to drive hard bargains.
Nevertheless, the company is able to take these factors in its stride owing to its long-established foothold in the sector as well as its good grasp of product trends and customer needs.
"Fortunately, thanks to our reliability and good connections, we're still doing business with our old customers," Mr Fuk says.
To keep up with market trends, Juniper regularly checks with overseas customers on the latest footwear fashion. "This is how email has made such a big difference to business today," Mr Fuk explains. "Within days of a new style emerging on the other side of the world we know about it, and if it seems promising we adapt our designs to keep pace with it."
Mr Fuk stresses the importance of quality control. "Just because a shoe looks attractive doesn't necessarily mean that it is well-made," he warns. "With profit margins so slim these days, some factories are always trying to cut corners so that sometimes when a consignment arrives it is virtually unsaleable because of its poor quality."
To help clients avoid such mishaps, Juniper offers an inspection service for overseas footwear firms with no representatives in China to ensure that their instructions are properly carried out by mainland factories filling their orders.
"Our inspection service is a safeguard against shoddy work, and we're acting as the 'eyes' of an increasing number of overseas buyers," Mr Fuk explains. "We act on their behalf as inspectors, checking that the materials, colours, workmanship and even the packing comply with specifications."
Naturally, the company's main business remains footwear production. Until 16 years ago, one of its main lines was sports shoes, with overseas buyers wanting "technicolour lookalikes" of popular running shoes at bargain prices.
Subsequently, in view of the cut-throat competition in that segment and the complications associated with producing "aerodynamic" soles and other gimmicks, Juniper decided to concentrate more on the OEM of ladies' casual shoes and boots, although sports shoes still count among its products.
Then, in 1996, Mr Fuk made a daring move off the beaten track - he packed his samples and flew to the Chilean capital of Santiago for the first time, looking for fresh business.
"I didn't know what to expect," he recalls. "Conditions in Chile were not 100% stable, and I found business practices there were quite old-fashioned. For example, computers still hadn't really caught on there and most correspondence was by fax.
"Not many footwear suppliers knew how to handle the Chilean market and the prospective customers I called on were a bit surprised when in walked this English-speaking Chinese guy with a smile and three suitcases full of boot and shoe samples."
That visit led to a few trial orders, and gradually business spread from Chile to nearby Uruguay, Brazil, Panama and Venezuela as buyers found that they were dealing with a reliable shoemaker producing good-quality shoes and boots at reasonable prices.
"Our biggest breakthrough came in 2005 when Chile's fourth-largest importer placed a whopping US$2m order for casual shoes and boots that took six months to complete," Mr Fuk remembers.
Currently, Juniper hopes to increase sales in Western Europe - particularly in France and Spain - as well as Sweden, which has ample potential because of the cold weather and the consequent demand for women's fur-lined boots.
"We already have a toehold in these countries but hope to grow our markets in all of them," maintains Mr Fuk, who will visit the GDS shoe fair in D┬seldorf, Germany, in September to expand the company's contacts and foothold in Europe.
Tough as old boots, Juniper has apparently got off on the right foot in rising to the current challenges.
TEXT BY GEOFFREY SOMERS