12 Oct 2005
The Natural Touch(HKTDC Fashion - Leather Goods & Bags, Vol 04,2005)
Lap Sun Straw Products Mfy Ltd
"We use mostly natural materials," stresses Chan Hung Fai, managing director of the Hong Kong-headquartered manufacturer that uses wheat straw, paper straw, corn husk, cotton, PP straw and rayon to fashion fine straw handbags.
"Our products are hand-woven or hand-crocheted," he adds, pointing to a dazzling variety of hip handbags in materials that are either in natural colours or beautifully dyed. "We follow fashions, such as colour trends."
Lap Sun operates two wholly-owned factories on the Chinese mainland - one with a floor area of 5,000 square metres in Dongguan in the south in Guangdong Province and the other on a 16-hectare site in Qingdao in the northern province of Shandong.
"Shandong is the origin of straw and corn husk handicraft," Chan explains. "We source our materials in Shandong and our operation there gives us greater control over that aspect of our business."
The two factories employ about 1,000 staff, including sales and marketing personnel and designers, while the Dongguan facility is complete with a large showroom displaying more than 1,000 of the latest handbag and hat styles. "We design new collections before every season and present them to our customers, who may then modify our designs, further develop their own lines and place orders," Chan says.
Producing approximately 500,000 handbags a month, Lap Sun sells mostly to the US and western Europe, with each accounting for 40% of turnover. "Other markets include Japan, South America, South Africa, Australia and northern Europe," Chan confides.
Lap Sun's handbags cover the low-, medium- and high-end of the market, although most of the company's products are in the medium range, giving Chan plenty of confidence in future prospects. "The market is very big, and there is still room for us to develop further," he believes.
Chan predicts the market will be "very good" next year. "We expect our sales to increase by about 20%," he says, noting that some smaller markets like South America are growing especially fast. "Our sales to South America have been growing 30%-40% annually in the past two years, and we expect a growth rate of at least that magnitude for the coming year."
Lap Sun has come a long way since it was established by Chan's father more than 30 years ago. "At first we produced in a small factory in Hong Kong, but high costs and rent forced us to move to the mainland in 1987," Chan recalls. "Labour costs were lower on the mainland and we could have a bigger factory, which would enable us to be more competitive and do more business."
Ironically, Lap Sun's mainland move precipitated the company's toughest time thanks to unskilled staff that took time to train. "It was like starting from scratch, but customers expected us to offer lower prices because we operated on the mainland," Chan recollects. "All in all, it was a painful experience that took us three years to overcome."
Lap Sun has prospered in the intervening years, but is now facing a new challenge in the form of competition from indigenous mainland factories selling goods at low prices.
However, Chan insists that there are "very good" reasons why Lap Sun remains competitive. "We are professional, trustworthy and guarantee good quality, new designs and good workmanship," he maintains. "We can make products others can't and our prices are also competitive."
Chan believes that Lap Sun's long history and emphasis on trustworthiness and service pay healthy dividends. "Once customers have placed an order with us, they can rest assured that the products will be of good quality and delivery will be punctual, which ensures we retain our high reputation," he says, adding that delivery is usually made within 75 days of order confirmation.
"We are a professional company and own our factories, which not only gives us better control of our operations but will also enable us to fulfil all our customers' needs in future."
WRITTEN BY LIZA LEE
Lap Sun Straw Products Mfy Ltd
Flats D & E, Phase I,