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OEM Companies Opt for Own-label Future in Me-too Electronics Sector

As competition floods the OEM marketplace with identikit products, many electronic manufacturers are now desperate to develop their own brands, according to exhibitors and attendees at the 2014 HKTDC Hong Kong Electronics Fair.

Photo: The HKTDC Electronics Fair: the world’s biggest electrical expo.
The HKTDC Electronics Fair: the world's biggest electrical expo.
Photo: The HKTDC Electronics Fair: the world’s biggest electrical expo.
The HKTDC Electronics Fair: the world's biggest electrical expo.

With OEM long a staple of the electronics industry it was perhaps significant that the first HKTDC Hong Kong Electronics Fair of the year should see so many specialists in this aspect of the business launching their own branded offerings. Opportunism, necessity or just a passing fad? For many exhibitors, it was mixture of the three.

For the Philex Group, a substantial OEM electrical specialist with offices in Hong Kong and on the mainland, its first move into the branded sector came in September 2013 with the launch of the i-box. This is very much a new direction for the 30-year-old company and a belated recognition of the opportunities on offer, as well as of the problems it surmounts.

Explaining the company's move, James Bennett, the Head of Sales and Marketing for i-box, said: "There is currently too much competition in the OEM market place, with too many products that are exactly the same. We genuinely believe that our future growth does not lie with OEM. Instead, we are now committed to establishing a strong, recognisable, 'own brand' range."

The thinking behind the i-box is not rocket science. The company believes that its combination of technical excellence and high aesthetic values will prove a winning formula. Specialising in mobile accessories, it is keen to quickly establish a strong identity within the marketplace. To this end, it sees coherent design as very much the key to success.

Bennett said: "All of our products are black and orange and we have also taken the hyphen from our company name and used this as the motif for our product shapes. As we want the products to be instantly recognisable, it is important that they all conform to the same strong design, shape and colour pattern. This will allow us to have a strong presence and be instantly identifiable by the public."

At the moment, the company's range includes speakers, wireless chargers, and torches. Unlike many of its peers, however, it is focussing on Bluetooth connectivity rather than Wi-Fi. Explaining its preference, Bennett said: "Bluetooth is very much easier to use than Wi-Fi and, of course, it's ideal for portable products."

At present, the company is building up to the launch of its Trax range of speakers, which include a microphone for use with mobile phones. Aimed very much at the festival and beach-going crowd, these are small portable units that can operate independently or be grouped together for stereo use.

Bennett said: "While this new range will be officially announced in September at the IFA in Germany, we have brought a lot of new concepts to this show, including wireless chargers and alarm clock speakers.

"Overall, we have decided to specialise in the accessory market as we see it as the fastest-growing electrical sector. The public now invests a large amount of money in smartphones and iPads. If someone purchases an expensive phone, they are inevitably going to favour quality accessories with a strong brand name.

"They want accessories they can be proud of, accessories that are instantly recognisable by their peers. We are now looking to nurture a loyal client base that will appreciate both quality and style."

Much of the content of this year's show bore out i-box's instinct for backing the accessories sector. Such items were ubiquitous this year, with many companies showcasing their own-label ranges for the first time.

Photo: Alexis Corval’s Horn.
Alexis Corval's Horn.
Photo: Alexis Corval’s Horn.
Alexis Corval's Horn.
Photo: The Iomega.
The Iomega.
Photo: The Iomega.
The Iomega.

One such company was Hong Kong-based Guantai Rubber Products, which was showcasing its Topioneer brand at this year's event. Introducing its latest range, Honda Hu, the Chief Executive, said: "Iomega is new this year. It is an adjustable Bluetooth stereo speaker that can 'hold' an iPad while you are using it to watch films etc. Alternatively, it can be worn around the neck while you are listening to your smartphone.

"In many European countries it is illegal to cycle while using headphones, so we designed the Iomega speaker for hands-free use. It's available in a range of brightly-coloured silicon-covered finishes, so we are hoping it will appeal to a young, fun demographic."

In other moves, the company is considering rebranding itself, believing its current name may not be an asset. Hu said: "We really want our own name to become more well-known. In line with this, we are looking at the option of shortening it to something more memorable."

Sticking with accessories, another ingenious device making its debut at this year's show was Horn, courtesy of Tree Labs, the Swiss wireless audio device specialist. Eschewing high-tech sophistication, the Horn is an actual electronics-free horn. Designed for use with iPhones, it employs simple, electricity-free sound wave dynamics to amplify the device.

Alexis Corval, the product's designer and the company's General Manager, said: "I created the Horn as a simple – but aesthetically-pleasing – accessory. Design is becoming ever more important, with the public now more design-literate than ever before.

"In the past, many consumers were only concerned about price and usage. Today's buyers, though, view mobile devices and accessories as fashion statements.

"In today's market everything looks too gadgety and there is too much copying. We always start with the look of the product first. No one wants something ugly. Classic design is timeless, as important yesterday as it is today and as it will be tomorrow.

"Consumers in China's tier one cities are now more visually-aware than ever before, but this is not matched by many of the country's industrial designers. On the whole, they are not visually-educated, leaving them reliant on sourcing design from outside the country."

Looking to prove the exception to this particular rule was Trend-Tek, a Shenzhen-based specialist manufacturer of high-tech, high-spec, high-style designer headphones. Clearly keen to mark out his company's territory, Audo Zhang, the company's President and its lead designer, said: "I believe our brand is all about sound quality, design quality and product quality."

The company's headphone design has had a lengthy four-year gestation period, with Audo trying out a variety of woods throughout that time. Today, each unit is unique, hand-finished and comes complete with a robust Shellac coating.

Explaining his choice of material, Audo says: "I chose wood for our products because of its historic associations. As well as representing heritage and luxury in Chinese culture, wood is the best material for sound resonance.

"Typically, I source hard wood from Africa, Asia and America. Hard wood is by far the best medium. It allows sound to echo back and forth several times, whereas metal cups only result in a comparably sharp and uncomfortable sound."

The first Hong Kong Electronic Fair of the year, then, was characterised by a distinct branching out process, with companies exhibiting products under their own banner for the first time. These businesses were pretty much divided between those opting for product specialisation and those putting their faith in aesthetic appeal. With just two months to go to the Autumn Edition of the HKTDC Electronic Fair, it will be interesting to see which – if any – approach has paid off.

Photo: Audo’s audio: wooden earphones from Trend-Tek.
Audo's audio: wooden earphones from Trend-Tek.
Photo: Audo’s audio: wooden earphones from Trend-Tek.
Audo's audio: wooden earphones from Trend-Tek.

The HKTDC Electronics Fair (Spring Edition) 2014 took place from 13-16 April at the Hong Kong Convention and Exhibition Centre.

Becky Gaunt, Special Correspondent, Hong Kong

Content provided by Picture: HKTDC Research
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