A Chinese lamp maker's passage to India
- Source: Xinhua
- [08:55 October 19 2009]
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Wu Guomin profited a lot for at least a decade by producing lamps under the big brands of "Philips" or "Wipro". But that was before the financial crisis.
After an array of trade barriers, Wu, vice president of Zhejiang Yankon, China's largest producer of energy-saving lamps, decided to brand its lamps as "ENERGETIC" in the electricity-strapped India last month.
"It takes years for us to realize that self-owned brand is the formula of long-term success for Chinese exporters," Wu told Xinhua at the on-going Canton Fair in Guangzhou City. "To push forour own brand is a must, not an alternative."
Yankon produced 300 million bulbs annually, about 60 percent of which were for exports, but more than half of them were sold under other foreign big names which outsourced their businesses to countries with low labor-cost.
Many Chinese exporters had a similar story with that of Yankon, who, without self-owned names, had to serve as a workshop for the world's big brands.
In 2002, India imposed anti-dumping tariffs on made-in-China lamps to make way for their domestic producers. Although the imports from China were slashed from 5 million a year to 1 million as a result, Chinese exporters could still have a niche in India.
But this year, the situation is getting worse as India has added 50-percent anti-dumping taxes in average on the burners imported from China, a key component of lamps. That meant Yankon's product would be knocked out of the country with huge demand for energy efficient lamps.
Made-in-China goods have frequently been the targets of anti-dumping investigations because their cut-throat low prices, which is a natural result of lacking self-owned brand, could threaten the domestic producers in the importing nations.
The company suffered another pinch of its OEM business model after its overseas orders were slashed by half in the year to this May, the worst days of the global financial crisis.
"Without the self-owned brand, we are the most vulnerable in the face of the slightest market changes," said Wu, who was determined to launch a global brand offensive from then on.
Improved durability and reasonable prices makes "Energetic" lambs quickly accepted by Indian consumers. The 1 million bulbs churned out in its factory 70 kilometers south of New Dehli is far from enough to meet the rocketing market needs.
"Under the OEM model, we sold at 1 dollar a lamp in India, and made 10 percent of it for profits. Now, we have doubled the prices with our "Energetic" icon, and earned 20 percent to 30 percent," Wu said.
