1 April 2001
The Personal Touch(HKTDC Fashion - Leather Goods & Bags, Vol 02,2001)
The Personal Touch
YOUTH is no impediment to success. Although just one year old, DRS Leatherware Ltd has achieved nearly all its early objectives. The company has widened its range from 100 models, mainly wallets (but also organisers, purses, binders and key-fobs), to 150 targeted styles. It has gained loyal customers upon whom it can depend for future orders and is achieving steady growth.
"In the first year we wanted to expand the range and more exactly target the markets so we could achieve a wider spread of customers," says director and manager Danny Lee.
The company is part of the supporting DRS group, which also includes a leather-coat manufacturer, a silverware company and a candle company.
DRS Leatherware employs 150 workers at its factory in Guangdong Province, on the Chinese mainland, and production levels are up to about 20,000 pieces per month.
Design, a process closely supervised by Lee, often involves consultation with customers and is complicated by different design preferences in Europe versus the US. Nevertheless, the design formula is obviously correct because sales are booming. Twenty per cent of the customers are premium companies, while 80% are importers.
DRS Leatherware usually works with leather imported from South Korea. For first-class quality (and price), it switches to Italian leather.
"If customers need a lower price, we can use leather from the Chinese mainland, which is less expensive. We can also manufacture in PU and PVC, or in special leathers with different finishes, like embossed or metallic finishes, plastic-sealed coloured leathers and many others," Lee says.
While special products may take 45-50 days to deliver, regular items are produced in 30 days. Prices for a basic wallet in PU or PVC are US$1.50-2 FOB Hong Kong. For a leather wallet, the price range is US$3.50-8.
The company aims to build on its considerable success in selling organisers and planners by expanding into regular production of larger items, like leather briefcases and ladies' handbags.
"In this fast age, client companies want to know their interests are being looked after professionally and correctly. It is worth money for them to know their goods will arrive on time and be of good quality. For us, better personal service, not just price, can become a marketing advantage," Lee says.
"Generally speaking, we make a medium-quality product for the middle market. From this balanced position, we can deal with high-volume American business and the smaller-order, higher-profit European business, all without strain."
DRS Leatherware Ltd
Rm 7, Block B
Hong Kong Ind. Centre
489-491 Castle Peak Rd.
Lai Chi Kok, Kowloon
SOME industries require level heads and flexible minds, and some locations offer entrepreneurial advantages. So when Hung Chun Leather Goods Fty opened for business with an experienced and wily management team in laissez-faire Hong Kong, the company enjoyed significant advantages.
The 12-year-old company was created by the industrial giant Three Brothers to participate in a lucrative, bustling industry involving small leather items hosted so successfully by Hong Kong.
"Everything begins with design and an on-going process of collecting all relevant design information from every source, including magazines, customers, exhibitions and retail shops," says director Ng Ming Kin.
"We take this very seriously. Two of our directors are involved with designing the range. After making our choices and decisions, we publish a product catalogue 3-4 times per year and send it to our client mailing list," he adds.
The company started with a library of more than 2,000 styles. Although that figure remains much the same today, years of trading have made the range much more relevant, vastly improving the order hit-rate.
Hung Chun sells an array of wallets and purses to Europe, while for the US market it also features briefcases, organisers and binders, reflecting perceived market differences.
"We can manufacture in various materials, including PU and PVC, plus many kinds of leather. Primarily, we use Italian cowhide," Ng says.
Product styling incorporates a striking use of embossed metal plates fixed with powerful adhesive to the leather surface.
Hung Chun products are aimed at the mid-to-top end of the market. Consistent with this target, Ng espouses a policy of strict quality control. The 1,200 workers at the company's Hong Kong factory use Italian machinery, pursue quality incentives and engage in staff training. Hung Chun is seeking ISO certification for its production unit and CE product-quality registration for the products.
"However, you can't be so fanatical, even about quality, that you forget other priorities. Price matters a lot, and we can consult with customers to change some things, perhaps opting for a cheaper leather or slightly different style. Prices must remain competitive. We have to continue offering good service to our customers," Ng says.
Business is brisk. "The European and South American markets are extremely strong. In Europe, the introduction of a wallet-sized, universal ID card certainly won't hurt business," Ng says.
In Europe, the leading markets are the UK and Germany. Hung Chun also achieves substantial sales in the US and Israel.
The company deals mainly with importers, but also works directly with some retailers. No agents are employed in marketing or sales. Hong Kong staff members handle the office-based services like shipping and financial control.
WRITTEN BY JOHN NEWSON
Hung Chun Leather Goods Fty
Rm 16, 11/F, Profit Industrial Bldg.
1-15 Kwai Fung Crescent
Kwai Chung, New territories
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