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Quality Counts(HKTDC Fashion - Leather Goods & Bags, Vol 01,2008)

OEM Bags

Grand Bag Centre Co Ltd specialises in giving bags a distinctive look through an extensive range of special finishes
The importance of anticipating and adapting to changing market conditions hasn't been lost on Grand Bag Centre Co Ltd, which served mostly North American clients when it was established 27 years ago.

However, as Merchandising Manager Mimi Chung explains, the company began to promote its goods in other markets and regions in order to maintain its market position as a specialist in higher-quality products.

"We now concentrate on Europe, doing mainly OEM products for established brand names," she explains, insisting that Grand Bag doesn't compete on price. "We compete on service quality, so we have long- rather than short-term, relationships with our clients."

The company manufactures shoulder, shopping, computer, travel, waist and cosmetics bags, backpacks, wallets and pencil cases, among other products.

FOB Hong Kong unit prices typically range from US$3.50-5.50, although some larger items - such as backpacks - can cost US$8-11. "Customers can find products for US$1.50-2.00 in China, because people compete on price, but with different materials and different quality," Ms Chung concedes. "However, we're mainly in the medium-price range."

Although it has its own Surprise brand name, Grand Bag concentrates on OEM/ODM business for long-established clients. "Other companies' brand names represent about 70% of our business, so we focus on servicing those clients," Ms Chung stresses. "Because we're working mainly for brand names they will generally have a design team that will send us a draft, and then we'll make them the samples."

Grand Bag has a strong design capability in its own right, and can originate designs as well as modify client designs to meet cost and quality criteria.

"Sometimes clients don't know much about bags - for example, they may do garments and want to develop a line of bags," Ms Chung explains. "We will help them to decide on the right material and to develop the right design at the right price."

Sometimes, she says, Grand Bag will be given a design that costs US$11 or US$12 and the client's marketing team will want to pay US$7. "We will show them how to modify the design to achieve that - it's good for them and good for us," Ms Chung states.

The company specialises in giving bags a distinctive look through an extensive range of special finishes, which include a "washed" or crinkled fabric look intended to suggest a patina of age - even on a brand-new bag.

Other popular styles include faux "worn" leather, an effect created on PVC or PU which would otherwise retain a pristine appearance through extensive wear and tear.

Special stitching and additional ornamental elements are other options for Grand Bag, which sources its materials mostly on the Chinese mainland and in Taiwan - although some special items come from Korea.

"Our major markets include Italy, Germany and Australia, though we also sell in Singapore and Japan," says Ms Chung, adding that both government regulation and consumer awareness in those markets are now affecting customers' choice of materials. "We use polyester and nylon and PVC but there is now a shift to environmentally-friendly products and PU."

Manufacturing for customer brands may be the heart of the company's business, but Grand Bag also developed its Surprise range as a service to clients who do not wish to develop and promote signature brands of their own. "We have several collections for each season," Ms Chung notes. "Mainly we do casual bags."

Whatever the brand, Grand Bag's minimum orders are 800 pieces per style, within which customers can choose a mix of two to three colours. "Completion of orders takes 45-60 days," Ms Chung advises. "Repeat orders can be turned around in less, and if customers have special requests for quicker delivery we try to accommodate them.

Grand Bag is headquartered in Hong Kong, but its manufacturing facility is in Dongguan, where it operates some 300 sewing machines and employs approximately 450 workers.

Service, flexibility and reliability are the keynotes of Grand Bag's success and longevity in a highly competitive business, reflected in a list of long-standing clients which the company keeps strictly private. "The quality of the bags speaks for itself," Ms Chung concludes.



Grand Bag Centre Co Ltd
Flats B6-8, 16/F
Kong Nam Ind Bldg
603-609 Castle Peak Rd
Tsuen Wan, New Territories
Hong Kong
Tel: 852-2498-1883
Fax: 852-2413-4870
Web: www.grandbag.com.hk

Year Established: 1981
Major Product Categories: nylon, cotton canvas, PVC and PU bags
Brands & Certificates: Surprise, RV Sportage
Minimum Order: 800 pieces per style with 2-3 colour combinations
Monthly Production Capacity: 100,000 pieces
Delivery Time: 45-60 days after L/C receipt
Factory Size & Location: -
Workforce: 450