|
CASE STUDIES
Cut according to the cloth
Based in Peebles, Holland & Sherry is one of the most prestigious cloth weavers in the world. With a 170-year history of supplying luxury cloths to bespoke tailors and high-class garment manufacturers, the company first turned its attention to China in the 1990s. Far East Executive Brian Grove explains how the company approached the exciting market.
“It was immediately obvious to us that if we were going to succeed in China then we would require help from inside the market. Considered advice at the time was that a joint venture partnership was the best entry route to market. We also researched and discovered that the potentially costly, time-consuming risks of red tape and restrictions which can affect any company entering China would be considerably lessened working with a Chinese partner.
Through well known contacts across our worldwide network, we formed special relationships with our customers. In Hong Kong we had been doing business with a high-class tailoring company whose family originated from Shanghai. The present owner was educated in the USA and living in Hong Kong where he had his tailoring base.
Aware of the possible niche for tailored suits in the predominantly mass-produced domestic market in mainland China, he had spent 10 years working to establish a factory base in Shanghai. His vision for the production of high-end tailored suits coincided with our desire to enter into partnership with an established Chinese company. Joint venture partnership was the next logical step.
In our case, we were lucky enough to find premises in the same building as our partner’s factory, thus minimising costs and maintaining control of the unit fairly easily. Since then, working with our partner, Holland & Sherry have successfully expanded into the Chinese market by supplying our cloth to our partner’s factory who then produces the suits for distribution in both the domestic and international markets.
If I have advice for other Scottish businesses, then it is that joint ventures can work well, provided you hook up with a well known and trusted Chinese contact. But you should not underestimate the importance of the expectations of the relationship, which may differ between the two partners. You have to work at it constantly to make sure that each knows and fully understands the position of the other.”
Family business, global market
Sourcing in China, and then manufacturing, have helped a family-owned healthcare supplier to grow and succeed Frank Sammeroff is a leading supplier of first aid kits, dressings, bandages and plasters to the occupational health market in the UK. The company also exports to some 30 countries. The company now turns over some £4m in annual sales.
Frank Sammeroff began sourcing from China 25 years ago. As confidence and contacts grew, initial involvement developed from sourcing into setting up a manufacturing operation. Frank Sammeroff Shanghai, a wholly owned subsidiary, was established in 2004.
The companies are now managed by two children of the company’s founder, Rochelle Clark and Lawrence Sammeroff. Lawrence Sammeroff has visited China many times and has become fully familiar with the cultural differences between China and the UK. The company has addressed this by making sure that within the company there are requisite language skills. In Shanghai the management team is bilingual, and in Glasgow the company employs two native Chinese graduates.
The decision to start manufacturing in China has led not to fewer, but actually more jobs at the company’s operation in Scotland. Lower costs of production in China, coupled with the high quality of the workforce, have enabled Lawrence Sammeroff to price their products more competitively in the UK and win a greater share of the market. That, in turn, has necessitated employing more people to meet the extra demand.
Full containers now regularly leave Frank Sammeroff Shanghai for delivery to the UK and elsewhere. “This has only been made possible because of substantial investment in quality and production and our 100 per cent confidence in the capability of the Chinese plant,” says Lawrence Sammeroff.
New product design, prototyping and plastic moulding are now also all handled in China. This year the Shanghai production will be expanding with the acquisition of a new production facility that will double capacity.
Both Lawrence Sammeroff and Roch-elle Clark are agreed that for a relatively small family business such as theirs, to have a fully-owned Chinese subsidiary is quite unique. Says Rochelle Clark, “Our advice to anyone thinking of a similar investment is to secure the services of good advisors in China with expertise in both UK and Chinese practices, employ a strong management team in both locations, then go for it!”
One step ahead
The Macallan malt whisky continues to make inroads into the Chinese market as its producer, The Edrington Group, adopts new web-based translation technologies to promote its whisky in China.
The Macallan was the first Scotch whisky to be marketed from a permanent office in China. The Edrington Group opened its headquarters for the Asia-Pacific region in Shanghai in July 2003. Now, some three years later, the company is using the Internet to market its products and to reach a wider audience.
The Edrington Group is the first Scottish distiller to subscribe to a project known as ‘Envoy’ which allows Scottish exporting companies to prepare their marketing materials in English and for the translation into web pages in Chinese script to be managed automatically. Chinese Internet users view the pages in their native language using their preferred browser and search engines.
Enquiries received by email in Chinese script can be dealt with directly from the Shanghai office or, if preferred, can be translated into English to be handled in Scotland.
Patricia Lee, spokesman for The Macallan, says, “Consumer appreciation of quality brands in China is growing rapidly as is the use of the Internet. It makes sense to allow this new wave of potential customers to have access to information about our products using their medium of choice.
“Envoy puts us closely in touch with our customers and potential customers, allowing us to obtain valuable feedback.”
|
