Taiwan's Bathroom Furniture Makers Unfazed Amid Downturn
2009/10/07 | By Steve Chuang
Despite frequent news recently of improving economies in Germany, France and higher GDP in Hong Kong in the first half of the year, as well as newly posted profits by the major investment houses as Goldman Sacks stateside, the global financial fallout since the fourth quarter of last year has rocked Taiwan’s export-oriented economy throughout the first six months this year: the overall export value of Taiwan’s manufacturing industries from January to April plummeted by an annual 35.54% to only US$52.215 billion, according to Taiwan’s Industrial Development Bureau (IDB).
With the credit crunch stateside and elsewhere having buffeted housing starts, as well as causing massive foreclosures in the U.S. since the markets tumbled last fall, the ripple effect has been felt globally to undermine consumer spending, devastating all kinds of products and retailers except maybe the box-type discounters as Wal-mart. Unsurprisingly the Taiwanese furniture industry in the first half has also been broadsided, with its export value declining 20.94% to only US$375 million, contributing a meager 0.72% to the island’s total export. As usual the smaller, less-well financed makers of furniture and parts makers have suffered worse fates than shown by such figures, with some having shut down production lines early this year due to lack of orders, according to industry insiders.
Fortunately the gloomy economy has not sunk the optimism of Taiwanese furniture makers, including those in the bathroom furniture segment. In fact, and based on interviews, at least three bathroom furniture makers with solid names in the line continue to make the best of the downturn.
Zhou Yong Co., Ltd.
Zhou Yong Co., Ltd. has been a beacon of hope among peers, managing to register remarkable growth in exports despite the global recession.
Established in 1996 in Changhua County, central Taiwan, Zhou Yong is an OEM and ODM of metal shelves, display racks, metal and K/D furniture for commercial and household applications. Running two factories on the island, the maker has in less than 13 years become one of Taiwan’s top-5 suppliers in the line by shipment.
Having helped the company to ship an amazing two hundred containers of various metal shelves and display racks in the fourth quarter of last year alone, Ko Chin-shan, chairman of the company, attributes such achievement to strong commitment to building trustworthiness among customers. “Our motto is to earn customer’s trust by delivering quality and efficient service,” he says. “We are totally customer-oriented.”
To assure unbeatable quality and production efficiency, the ISO-9001-certified company discusses production plans and schedules with its engineers and subcontractors, strictly carrying out world-caliber quality inspection throughout production and delivery at both in-house factories and subcontractors’. Ko proudly claims that years of close attention paid to quality assurance have totally sold most of its customers from the U.S., Europe and Japan on Zhou Yong’s product quality. “Sometime new customers even skip auditing and evaluating our factories just based on Zhou Yong’s reputation.”
When handling ODM orders, the company, backed by extensive knowledge about manufacturing and material properties, willingly advises customers to come up with optimal solutions through repeated, in-depth discussions.
Marketing Savvy
The company is also savvy regarding product marketability. Upon receiving orders, Zhou Yong’s staff immediately analyzes specific consumer markets, and then drafts and designs suitable prototypes. In many cases, such preliminary analysis effectively satisfies customers who believe in the practicality of such study, according to Ko, adding “a maker shouldn’t merely produce and dump bland, garden-variety goods that are not truly needed by consumers. So we help customers to explore markets and develop more appealing, satisfactory products.”
Also, Ko stresses that steady pricing is as crucial as quality and services in building customer loyalty. Despite the cost of raw materials having surged 170% on average last year, a virtual disaster, “however, we decided to absorb most of the added cost throughout the year, and therefore, along with years of dedication to customer satisfaction, successfully retained our clientele amid the global recession, even achieving rising shipments,” he concludes.
Chang Fu Precision Co., Ltd.
One maker who hasn’t overlooked the importance of R&D, notwithstanding the increasingly challenging markets nowadays, is Chang Fu Precision Co., Ltd., established in 1995 in Changhua County and specializing in making metal furniture for different applications for nearly 15 years.
Starting out by providing metalworking services, the company then applied its expertise in stainless steel to manufacture metal K/D cabinets and racks, most of which are for bathrooms and exported as middle- and high-end products to the U.K, Germany and Japan.
Consistent dedication to R&D is key to boosting the company’s position in the global market over the past years, according to Angela Chang, sales manager of Chang Fu. “Despite the hardship this year, Chang Fu still invests considerably in R&D as a strategy to overcome the challenging situation.”
Chang Fu has specifically focused its R&D to sharpen structure and compact exterior, features most visible in the company’s products. One such example is the hot-selling Cubic Box Series: Chang says that the modular structure allows assembly of many different combinations of storage boxes, with each box being assembled in less than one minute without fasteners.
Enhanced aesthetics
Also, Chang Fu impresses users with compact, attractive product exteriors, which are made ingeniously without welding, hence achieving smooth, integrated, compact metal surfaces. Enhanced aesthetics effectively adds to marketability of the firm’s worldwide, despite being priced higher than ones made in China and Vietnam.
Other newly developed bathroom furniture include the SS series with two K/D shelves, the WR series with one cabinet and a basin, the OVAL series with a mirror cabinet, all of which are of stainless steel and built with larger tubing for better structural strength. The maker has also unveiled the “frame-less mirror” for its cabinets, believing such design, along with compact square shapes and metallic look, is a growing trend in the modern furniture market. Furthermore, the products are protected by multinational patents for assembly methodologies and structural designs, according to Chang.
“Production of frame-less mirrors calls for higher skill, and larger tubing costs more,” Chang says. “However such factors haven’t compromised marketability, as many buyers are showing intense interest in the middle-to-high-end furniture, thanks to its excellent functionality and designs. We’ll be showing such products at the Mega Show in Hong Kong this October and International Furniture Fair in Singapore next March.”
E Tai Enterprise Co., Ltd.
Another remarkable supplier is E Tai Enterprise Co., Ltd. who, founded in 1977 in Taipei County, northern Taiwan, has achieved leadership on the island as a maker of aluminum shower doors.
Having started out by making aluminum windows and doors in 1977, E Tai later ventured into production of shower doors. After 20 years of hard work on branding and product diversification, the firm has become one of leading bathroom ware makers in Taiwan, supplying three major lines: shower doors, bathroom ware and home spa and sauna equipment, which are marketed under its own ITAI brand.
Among its many achievements, the general manager Hung Fang-shin is also honored in 2009 as one of 16 “Models of Taiwan and Overseas Entrepreneurs.”
One of the most memorable pages in the corporate history revolves around the development of shower doors, a product that took the maker on a rigorous journey.
Pual Hung, E Tai’s president, says his firm shipped less than 50 sets of shower doors yearly at first. Undaunted, Hung stuck to promoting products and improving quality, as well as concentrating on building sound distribution channels around the island to enhance service efficiency.
Reeducating Consumers
Eventual success was built on having to reeducate consumers. “We taught consumers to save water by taking showers and, for safety, to keep floors dry by installing shower doors in bathrooms,” Paul says. “Besides, we labeled shower doors with the Itai brand to be fully liable for any defect.” Few in Taiwan saw shower doors as a necessary bathroom furnishing earlier, but E Tai has changed that trend. The firm now ships up to 3,000 sets a month to lead the segment on the island, with all such products certified by BSI and international quality standards.
With the market for shower doors becoming saturated, E Tai is trying to carve out a new niche by developing far infrared, low-temperature home sauna equipment, ITAI-Sauna, as its ace in the hole.
Hung says that the product is designed to work at lower temperatures and less humidity to satisfy all users by offering a comfortable, healthy sauna environment at home. “Using far infrared heaters and micro-computer digital control panels inside and outside the sauna is the major feature, which makes ITAI-Sauna safer and healthier than traditional steam rooms. Elderly or infirm users can also use this product safely as the low-temperature present less circulatory hazards.” Plus, the built-in decorative lighting and speakers add to the sauna’s recreational appeal.
The ITAI-Sauna is 100% developed and made in Taiwan, helping the firm to win the 14th SME (Small and Medium Enterprise) Innovation Research Award given by the Ministry of Economic Affairs, according to Paul. E Tai’s home spa and sauna equipment, with excellent functionality and competitive prices attracting clients in the USA and Japan, have helped to drive export sales.
Export Value of Taiwan's Manufacturing Industries | ||||||
Sector | Value for Jan. to April, 2009 | Yearly Growth | Contribution | Value for 2008 | Yearly Growth | Contribution |
Metal Products | US$12.509 B. | -31.36% | 23.96% | US$52.640 B. | 4.85% | 22.43% |
IT-based Products and Electronics | US$22.775 B. | -38.09% | 43.62% | US$106.991 B. | -0.05% | 44.25% |
Chemical Products | US$12.001 B. | -38.21% | 22.98% | US$57.389 B. | 14.55% | 23.73% |
Consumer Commodities | US$4.93 B. | -37.15% | 9.44% | US$23.193 B. | -4.15% | 9.59% |
Total | US$52.215 B. | -36.54% | 100% | US$241.813 B. | 3.75% | 100% |
Source: IDB, Taiwan Institute of Economic Research