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Magic Motto(HKTDC Watch & Clock, Vol 02,2007)

Lautan Watch Co


The US, Europe and Korea are the main outlets for the watch and clock movements manufactured by Lautan Watch Co
Twenty-nine-year-old Lautan Watch Co certainly believes in living up to its long-treasured motto - "good quality, good price, good service and good selection".

"The motto remains the company's key business concept and notion," claims Indonesian-born director Yip Wing Sang, explaining that Lautan is the Indonesian word for ocean.

Lautan initially traded watches and clocks, as well as component parts such as watch and clock movements, watchbands and straps, buckles, glasses, spin bars and repair tools.

"We saw the low- to- mid-price market booming and soon turned to manufacturing," Yip recalls, adding that the company's first factory started with 60-70 workers.

Like most Hong Kong manufacturers, Lautan eventually realised that business conditions were getting tougher thanks to fierce competition from manufacturers on the Chinese mainland.

The inevitable move to the mainland came in 1990. "The network of timepiece suppliers was maturing on the mainland, as most of the Hong Kong watchmakers set up factories there," Yip explains.

Lautan accordingly relocated production to Guangdong Province but kept its sales office in Hong Kong to better control costs and maintain close contact with customers.

"Competitors tried to undercut our prices, but it is important to keep pricing at a competitive level at all times," Yip maintains. "The ability to maintain trust and confidence with customers is crucial."

He recollects that the 1980s and 1990s saw Lautan grow steadily by concentrating mainly on OEM projects, but says the company encountered difficulties with its supply sources.

"Our raw materials came from the mainland and in the early 1990s there were times when shipments arrived with materials we never ordered," Yip reminisces. "Since purchases were made by prepaid wire transfers, it was a real hassle to claim damages."

Needless to say, Lautan survived those trials and tribulations and has subsequently undergone major reorganisation. "The business was started with other shareholders and directors," Yip explains, adding that ultimately the partners chose to withdraw, leaving him as the sole-owner and decision maker. "I have been in the timepiece trade long enough - I want to do business more cautiously."

Today Lautan maintains relatively small but efficient operations, gradually shifting from manufacturing back to trading and exporting from its 1,200-square-foot, 5-6-worker facility in Kwun Tong that acts mainly as a sales and administration office.

Production is subcontracted to factories in Guangdong. "We have worked with these factories for years and we have no problem with quality control," Yip stresses. "Meanwhile, we can be more selective and better able to manage supplies and costs."

The US, Europe and Korea are the main outlets for the watch and clock movements and other components that generate 50% of Lautan's total sales, with the balance comprised of sundry merchandise such as compasses, calculators, stainless steel bracelets and pendants.

Lau adds that the company, which requires no minimum order and normally ships 30 days after confirmation, regularly participates in trade fairs to help identify and explore new ideas as well as potential markets.

"We see obvious export growth in Eastern Europe - their economies have been growing rapidly in the past few years," Yip observes. "We have new buyers from Poland and the Czech Republic, who have demonstrated their liking for watches and sundry items."

Lautan's best years were 1996 and 1997, when sales were in excess of HK$20m, but Yip anticipates favourable trading conditions in 2007 despite the unstable global economic climate in the past few years.

"In today's market, you have to keep moving ahead with new, marketable products," he says, pointing to a wooden table clock fitted with glass panels to display the movement. "You just add a little new touch to the design and it will become a hot-selling item."

Lautan has kept pace with the Internet era with its own website for promotion and customer communication, but Yip believes the personal touch is an important element in any successful business strategy.

"We have new buyers who come to us saying they feel more comfortable doing business with an entity that has been in business since the 1970s, which is very reassuring," Yip concludes.


Lautan Watch Co

Rm 1412,
Wah Shing Centre,
11-13 Shing Yip St,
Kwun Tong,
Kowloon, Hong Kong
Tel: 852-2389-4202
Fax: 852-2793-0883
Web: www.lautanwatch.com