The Family Factor
Several years after starting our business, we learned that the vast majority of the trading firms are small, family-run businesses with an average of five employees. Though many of these firms have done well over the years, most of them embrace the notion that, “if it ain’t broke, don’t fix it.” As such, it is likely that these firms would not invest in intangibles that offer no immediate return. We quickly realized that our market had shrunk by orders of magnitude.
The Competition Factor
With all of this said, things have started to change in recent years. For a long time Hong Kong was the de-facto route for sourcing products from China. Then China joined the World Trade Organization (WTO). China’s easing of trade regulations, the mainland’s improved English skills and the mere fact that it’s faster to fly to and from China have caused more and more corporate customers (e.g., large retailers and manufacturers) to source products from and contract with Chinese factories directly. Facing this pressure, some trading firms began to switching gears from offering pure trading and merchandizing services to more value-added services, including: product development, production management, quality management, logistics and finance.
Many of the firms that were successful in the transformation have seen their businesses grow exponentially. And to our benefit, IT is increasingly being viewed as an integral part of supply chain management, as well as attracting and retaining customers. Today, our sourcing and supply chain management software is used by some of the largest trading companies, buying agents and retailers around the world. After 12 years and many mistakes, we are still learning all of the factors involved in becoming successful entrepreneurs, but at least now things are starting to get exciting around here.
By: Michael Hung, {EO Hong Kong}.
Now On to Some Marketing Guide: Marketing Strategies
