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Mon, May 10, 2010
The Straits Times

Winning on quality, not price

By Francis Chan

Singapore's furniture manufacturers racked up $4.7 billion in export sales last year - about 0.92 per cent of the world market. But in such a competitive market, local firms, which are mainly SMEs, need to stand out. In the second of a six-part, fortnightly series sponsored by Spring Singapore, FRANCIS CHAN takes a look at two leading SMEs and how they win recognition through branding.

HALEYWOOD Industries founder Ong Kim Chuan was never going to get into a price war with rival suppliers, preferring to differentiate his business through product quality and after-sales services.

But offering high-quality furniture to buyers at competitive prices was easier said than done, especially when competing against cheaper suppliers from developing countries with lower labour costs.

Mr Ong, 59, held his ground and has been doing so for more than 30 years, and his growing international clientele is proof that his efforts in ensuring quality have paid off.

Haleywood exports most of its home furniture products from plants in China and Malaysia to buyers from Scandinavia, Britain and European markets like France, the Netherlands and Belgium.

Although sales last year dipped slightly to $15 million from about $18 million in 2008, Mr Ong believes Haleywood is in a good position to ride on the global recovery as orders begin to pick up.

His son Ong Sining, 27, who is the director of sales and marketing, says a target of $27 million is possible considering the positive market sentiment.

The elder Mr Ong, who entered the trade in 1978, says he has always wanted only to manufacture furniture with qualities the market would perceive as good value.

"People might sell a $15 chair, but I would always market mine for $17, $18, but I'd make sure that mine came with better finishing, packaging and after-sales service," he said.

Along with high-quality final products, packaging and customer service are equally critical in ensuring that the firm remains competitive, said Mr Ong.

"The misconception by manufacturers tends to be that 'the moment I load the container, I transfer my responsibility for the products to my buyer'," he added.

"But by the time the consumer ends up with the product, it would have been handled at least seven times and if your packaging is not good enough, guess what happens to your product?"

Despite engaging mainly in business-to-business transactions, Mr Ong keeps a close watch on customer service at Haleywood.

"If you're a buyer and have a complaint, the last thing you want is not being able to get through to your supplier," he said.

"So I made it a point for all my managers and service staff to be contactable by mobile phone 24/7, because our clients are mainly overseas in a different time zone."

He initiated a project early last year to refresh the Haleywood brand name, which has been in use since the 1980s.

The decision to replace the corporate image of the company he founded in 1987 was not an easy one for Mr Ong.

"It took a lot of convincing," he said. "But the world is changing...and we needed an image that reflected a more vibrant global company."

Along with the change in corporate image are efforts to enhance the firm's design capabilities by recruiting designers who can come up with new products, and reducing the lead time from order to delivery.

"By the second half of this year, we hope to cut our lead time from the current 45 to 60 days to 15 to 30 days, to enhance our role beyond the buyer-and-supplier relationship to one that's more like a partnership," said Mr Ong.

"This is because our buyers really do depend on us to keep stocks for them and deliver on time."

A long-term goal of the rebranding is to allow the Haleywood name to gain more prominence within the retail space, because most of its products are sold today without any indication that it is a Singapore brand name.

"Hopefully in about five years' time, I'll be at a stage where I would be able to tell whoever buys from me that 'if you don't sell the product with my brand on it, I will not sell to you'," said Mr Ong.

"Today, I can say that only 10 per cent of my buyers allow me to have a sticker of Haleywood on the we would like to get that percentage to grow because they see the value in our brand, and because we are able to guarantee the quality and the service."

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