7 March 2005
Fashionably Flexible(HKTDC Watch & Clock, Vol 02,2005)
Ko Tak Lee Industrial Co Ltd
Moreover, he says, this flexibility is the secret of the firm's success. "We make ladies' and men's watches, evening watches, sports watches, novelty watches and fashion watches," Chan explains.
"At the moment, we are working to increase our range and enhance our sourcing power so that we can decrease our costs, while still getting good quality parts from our suppliers."
The 22-year-old company has two factories in Shenzhen on the Chinese mainland that jointly cover around 1,000 square metres and employ some 500 staff, including a team of in-house designers.
The second plant was set up only last year, Chan reveals, and has significantly expanded the company's manufacturing capabilities. "We have a case factory and an assembling department in the new factory, which has a total capacity of about one million watches per month."
Although much of the production takes the form of OEM/ODM, the company is launching its own AS brand this year that it hopes will establish a strong profile at retail level in international markets.
"We want to build the AS brand with a strong association with high-end products," Chan says, adding that the main markets for the brand will be Europe and the US.
The prototype AS watches have brass cases, genuine leather straps and large cases, and feature the new brand's logo discreetly on the face, along with a signature triangle on the 12 numeral.
However, until the AS brand achieves significant momentum, Ko Tak Lee will continue to rely on the OEM/ODM business in major markets like the US, the Middle East and Europe.
"The biggest order we have handled was for 600,000 watches for a trading company, which distributed the watches internationally," Chan recalls. "We make 95% quartz watches and around 5% digital, using Japanese or Swiss parts."
Ko Tak Lee long ago established that the key to staying ahead was added value for customers, and has focused accordingly on presentation packages.
The company is known for its imaginative packaging and also for gift sets that pair its watches with other items such as letter openers, writing implements, cigarette lighters, tie-pins or wallets.
"We don't make the pens, but we can make the other items," notes Chan, adding that it's all part of the company's policy of responding flexibly to market demand. "If customers want interesting packaging we can arrange that - for example, we have special plastic packaging that adds value."
Ko Tak Lee focuses mainly on alloy and brass case timepieces, but it also makes models with stainless steel cases and even manufactures the digital watches that are currently out of fashion.
"We order the parts and assemble them, but demand for digital watches is diminishing," he concedes. "We also make mechanical watches with exposed movements and stainless steel cases, but the quantities involved in these high-end products are generally very small."
FOB Hong Kong prices for Ko Tak Lee watches range from as low as US$1 per unit to US$30 or more for higher-end models, depending on the cost of the materials and the movements.
"We only need 30-40 days to process and order alloy and brass watches, while stainless steel models take 60 days on average," Chan reveals, adding that the company has the machinery to make alloy and brass cases, but stainless steel cases have to be ordered from other suppliers.
"Usually, our minimum order for steel and brass is 500 watches, and 1,000 watches for alloy, but it depends on the model and whether we have stock."
This manufacturing flexibility is equally vital when it comes to anticipating and responding rapidly to the fast-changing fashions that govern the timepieces industry.
"Stone watches with big cases were quite popular in 2004, colourful leather band watches were also coming back into vogue and there were more watches with big cases," observes Chan, who sees those trends continuing in 2005. "Whatever the trend, we are confident that we can meet the demand from our customers all round the world."
WRITTEN BY ROBERT PIERCE
Ko Tak Lee Industrial Co Ltd
Flat 1, 14/F, Lucida Industrial Bldg,