When Mr. Wang was traveling abroad, he bought a camera. Upon opening it to load the film, he discovered the words "Made in Taiwan"; thus he was made aware that the camera he had planned to bring back from overseas was made at home in the first place. There are many stories like this one, proving that Taiwan-made products have already achieved an international level of technical excellence. But since marketability under new brand names is not good, many companies must rely on subcontracting under foreign brand names to fight the impression among buyers overseas that Taiwan-made products are low in quality as well as price.
Local manufacturers, aware of this problem, have begun to upgrade the quality and type of goods they produce to sharply increase their marketability. They are developing their own brand names, slowly acquiring international reputations. Two local companies which understand this situation well and are now successfully marketing their own brand name products are Kennex, a world renowned maker of tennis and sporting equipment, and Hertzian, a newer company which manufactures drafting equipment.
Fourteen years ago Kunnan Enterprises was established to make tennis racquets for foreign firms. Six years ago, the company began to produce and export its own brand, Kennex. Despite the recent years of recession, Kunnan has continuously shown sales growth and, almost overnight, has established itself as a leading international manufacturer of sporting equipment.
Kunnan is now the world's leading manufacturer of tennis racquets, turning out 10,500 daily, not only its own label, Kennex, but under the Prince, Adidas, and over 30 other labels as well. Kunnan's success is proof that the relatively new Chinese factories can sell products marketed under their own name on the world market, without recourse to foreign brand names, not to mention illegally copying other companies' products.
The president of Kunnan, Lo Kunnan, is a model young entrepreneur who has been recognized in the American magazine "Tennis" as the "tennis racquet king of the world." Lo Kunnan used a farsighted and independent business mind to carve out a major niche for Kennex in the international market place.
It all started in 1969, when he began making wooden badminton racquets for foreign customers who either had no factories of their own, or whose factories could not meet the demand of the affluent 1970s, and so sought out countries where they could have their products manufactured cheaply. Starting from this base, Kunnan began to expand. He had noticed on trips abroad that Japanese products were for sale everywhere; but nowhere did he find Taiwan-made goods. This hurt his national pride. In addition, he began to have a growing feeling that once customers found cheaper suppliers, they would take their business elsewhere. He began to worry that he might have to change professions rather late in his career. To protect himself, as well as for reasons of pride, he began to produce under his own label, aware that as soon as it was established, he would be financially secure, once and for all.
After much hardship he eventually did manage to carve out his niche; now his current goal is to reverse his former role, making customers dependent on Kunnan. To do this, he has spent large amounts on research and development, one of the results being a boron fiber racquet with the advantages of strength, lightness, and the ability to retain its shape in any weather or climate.
Lo Kunnan emphasizes that when adopting foreign technology, one should only adopt the theory, and for everything else, rely on one's own research to achieve breakthroughs or development. If we accept things in their entirety without changing them to suit our needs, we are condemned to copying, to relying on others for ideas.
Kunnan's marketing method is to establish a base in one country and then expand from there. Kennex's main market is currently the U.S. Lo Kunnan has begun to diversify from his market because he fears the U.S. may one day limit sporting good imports. He has also diversified his product line, using boron fiber technology for bicycles, fishing rods, and golf clubs.
The Hertzian Industrial Co., which manufactures "Hertz" brand drafting equipment, was founded by Wang Chiou-yin, an enthusiastic 30- year-old entrepreneur.
Wang Chiou-yin began producing drafting equipment in the first place when, seeing so much of it in Japan, he became aware that there was no domestic manufacturer in Taiwan. He felt that if he could match the quality of the Japanese product and beat the price, he could corner a large share of the local market. He invested NT$10 million (about US$250,000) in research and development and came up with new designs in drafting equipment. Made from 95% domestically supplied materials, the equipment could be produced at half the price of its Japanese equivalents while equaling them in quality.
Once he began production, many Japanese agents applied to work in association with him, but he rejected these approaches. Although he knew that marketing his own product line would be more difficult, he wanted to give it a try to prove his Taiwan-made products were second to none.
Considering the fact that the domestic market is dominated by Japanese equipment, Wang felt sure that his own equipment, at half the price, would have no problem selling. However, he miscalculated. One of the main problems quickly surfaced: Domestic organizations purchase this equipment by taking bids. Although the bidding process is made public, there is much secret negotiating behind the scenes to make sure preferred companies get the sales.
So when Wang makes his bids, he often finds himself competing with bids that are artificially low. In fact, some Japanese agents who won such biddings have even come and bought Hertzian's products, affixed their own labels, and then sold the products at higher prices, making larger profits.
Another problem is that many Chinese technicians and engineers are not used to using high tech equipment. Most students are content with a T-square and a tape measure.
Having used up his own funds, Wang Chiou-yin sought private professional advice and also went to the Ministry of Economic Affairs for help. The manager of the Medium and Small Business Counselling Center, Chang Chun, advised Wang that although his product has definite sales potential, he must recognize that developing a sales network is a time and money consuming process. He recommended that Hertzian work with a sales agent for the time being, and once the product's reputation is established and the company has stabilized, plan to develop its own sales network. Wang was also advised to follow Kennex's example: to begin by establishing a foreign market, later developing the domestic market.
Following this advice, Hertzian has now made sales to England, the Philippines, and Singapore, and is responding to inquiries from potential agents in the Netherlands, Spain, Canada, and the U.S. The US$200,000 sale to Singapore stabilized the business financially. Already, a Canadian businessman interested in marketing the Hertz line has applied for Canadian patents; he estimates a potential Canadian volume of 40,000 units per year.
In short, things are beginning to look up for Hertzian. Wang Chiou-yin grins, "I should be able to make it." As a result, he is already planning for Hertzian's future. Since most developed nations now use computers to aid in design, Wang is working with his brother, a computer scientist, to develop special computer-design equipment.
Since Taiwan is an island nation dependent on exports, to the extent local industry advances and the quality of Taiwan products is im proved, exports will increase as new markets open to Taiwan-made goods. But to reach this advanced stage, there must be a difficult period of adjustment. Taiwan's leaders hope businessmen will consider establishing their own labels, taking encouragement from Lo Kunnan and Wang Chiou-yin, and help to create a new image for Taiwan made products.
[Picture Caption]
1,2. Kennex's tennis racquets and tennis balls are world famous. Tennis racquets are made of wood, aluminum, carbon fiber, and the top of the line, boron fiber. 3. Lo Kunnan is the founder of Kennex, his farsightedness is responsible for Kennex's success. 4. Kunnan Co. also produces fishing rods, this is the factory where they are made.
1. Racquet production viewed through a line of racquets. This workman is testing racquets for straightness. 2. Badminton racquets were Kunnan's first product. 3. Kennex leisureware is made expressly for export. 4. Hertzian produces high quality drafting equipment. Some of their products can be seen here: Magnetic drafting board, parascale, drafting stand, chair, side cabinet, and drafting lamp. 5. Wang Chiou-yin spent much time researching quality drafting equipment then produced his own under his own label. 6. Hertzian pays attention to even the smallest detail. Pictured is the carriage roller system of the drafting board.
1. The Hertz light box is the only one in the world to use fiberglass instead of glass. Pictured is the Hertz drafting stand, FRP light box, and parascale. 2. The standard Hertz drafting board and stand. 3. This is the angle adjustment handle. Simply unfasten the handle, rotate the drafting board to the desired angle and refasten the handle. 4. Drafting board assembly.
Left: K/D table. Particularly suitable for designers and students, it has a strong frame and chromium stand points for folding flexibilities. A book rack is also designed for users' convenience. Right: The K/D table's angle can be adjusted to fit specific needs.
1,2. Kennex's tennis racquets and tennis balls are world famous. Tennis racquets are made of wood, aluminum, carbon fiber, and the top of the line, boron fiber.
3. Lo Kunnan is the founder of Kennex, his farsightedness is responsible for Kennex's success.
4. Kunnan Co. also produces fishing rods, this is the factory where they are made.
1. Racquet production viewed through a line of racquets. This workman is testing racquets for straightness.
2. Badminton racquets were Kunnan's first product.
3. Kennex leisureware is made expressly for export.
4. Hertzian produces high quality drafting equipment. Some of their products can be seen here: Magnetic drafting board, parascale, drafting stand, chair, side cabinet, and drafting lamp.
5. Wang Chiou-yin spent much time researching quality drafting equipment then produced his own under his own label.
6. Hertzian pays attention to even the smallest detail. Pictured is the carriage roller system of the drafting board.
1. The Hertz light box is the only one in the world to use fiberglass instead of glass. Pictured is the Hertz drafting stand, FRP light box, and parascale.
2. The standard Hertz drafting board and stand.
3. This is the angle adjustment handle. Simply unfasten the handle, rotate the drafting board to the desired angle and refasten the handle.
4. Drafting board assembly.
Left: K／D table. Particularly suitable for designers and students, it has a strong frame and chromium stand points for folding flexibilities. A book rack is also designed for users' convenience.
Right: The K／D table's angle can be adjusted to fit specific needs.
