A limo for Kuka customers to travel from the airport to the fair. Photo by Mark Lee.
MAN WAH HOLDINGS recently posted a commendable set of results - net profit for the third quarter ended 31 December 2008 grew 14.7% to HK$56.2 million. Yet many investors in Singapore seem skeptical about the company’s long- term growth prospects.
Man Wah's booth took up a sizeable 4,000 sq ft at the fair.
To get some insights, I seized an opportunity to make a day-trip from my office in Hong Kong to the 22nd International Famous Furniture Fair in Dongguan, PRC from 16-20 March.
Covering 5 halls and approximately 160,000 sq m, this Fair (commonly known as 3F) is one of the largest furniture fairs in China.
This year, there were more than 500 exhibitors. As I approached the venue, I was greeted by the magnificent sight of three PRC-style limousines decorated with the “Kuka” or “顾家” brand. They were used to ferry overseas VVIPs from the airport to the trade fair. Kuka has more than 1,000 franchise stores in China.
“This is one of our main competitors in China. Kuka is still growing this year,” said Francis Lee, Executive Director and CFO of Man Wah.
Man Wah’s exhibition booth in Hall 4 was sizable at around 4,000 sq ft and tastefully done up. The women sales staff were pretty and dressed as air stewardess.
“Compared to last year, the crowd is significantly smaller, down probably 30-40%,” observed Mr Lee. “But these buyers are also more genuine. You don’t fly across the globe in a crisis unless you are serious about closing some deals here!”
Mr Wong Man Li, Chairman of Man Wah Holdings, was seen speaking to some potential customers. They were exchanging opinions about the PRC domestic market and the consolidation of the industry.
I noticed Eric Chan, Man Wah’s Sales Manager and President of Overseas Sales Department, engaged in a negotiation with a potential buyer from USA.
Buyer sentiment
Man Wah official chatting up a potential customer. Photo by Mark Lee
I managed to catch Eric for a chat later on to find out about the current buyers’ sentiments. Eric was upfront in telling me that potential customers have asked him for the cheapest item that the Company was producing this year. Affordability has become a major criterion.
“The customer just now was asking for a lower quote from us for a certain model. He said Company X offered him a better price for a similar model. I told him that Man Wah delivers value and value comprises of quality, service and price. This is a package. In the rare event of a defective item, you can always come back to Man Wah. But you would not know if Company X is still around after the fair.” Eric said.
I managed to speak to a couple of franchisees of Man Wah later on. One of them, Mr Dong Xiao Ming, hails from the Heilongjiang province. Mr Dong is the CEO of the Huahe Group, which specializes in furnishing and carpentry businesses. While cautious in his purchasing, he remains optimistic about the prospects for his business.
“The northern region has always been focusing on domestic consumption. There are very few enterprises in our area that handle export business. We believe our business will continue to remain stable in 2009. Having said that, I will be more cautious this year. I have heard from my friends that the coastal region has been badly affected. Hence, it is better to be safe than sorry.” Mr Dong commented.
During the few hours I spent at the trade fair, I also visited the exhibition booths of Royal Furniture, de Rucci, Fushi Furniture, Fortune Furniture etc. Compared to theirs, Man Wah’s booth was one of the more lively and well-visited booths.
Who, knows, this may be a sign that Man Wah will continue to thrive.
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