Dongguan firms banking on brands

A robot on display at the China Processing Trade Products Fair, which opened in Dongguan, Guangdong province, on Wednesday. The robot can talk in simple words with its owner and do some simple domestic chores such as turning on and off TV sets. [Photo/China Daily]

Traditional processing trade companies from Dongguan, Guangdong province, have achieved sustainable business growth due to increased focus on self-developed brands and spending on e-commerce, industry experts said on Thursday.

Indications that the development trend is bound to catch on are evident at the ongoing China Processing Trade Products Fair, which opened in Dongguan, where a large number of processing trade companies reported higher orders, thanks to their self-developed products.

Luis Chiang, public affairs director of China Wonderland Nursery Goods Co Ltd, said the company's self-developed child safety seats are becoming popular in the domestic and overseas markets.

The company, which was established in the early 1990s as an original equipment manufacturer of car safety seats, has seen increasing demand in the domestic market for its newly launched items, Chiang said.

"It was mainly because we have made efforts to develop our own brands since 2009," Chiang told China Daily.

The company, a Taiwanese-invested venture based in Qingxi township of Dongguan, a traditional processing trade hub in the Pearl River Delta, now focuses more on development of self-owned brands rather than simply processing.

"Chinese parents are becoming more aware about child safety. Car seat sales in the domestic market have been growing steadily during the past few years," Chiang said.

According to Chiang, domestic market sales now account for more than 10 percent of the company's total sales. "The better performance in the domestic market has helped offset decreased business from the overseas markets," Chiang said.

Like Chiang's company, a growing number of traditional processing trade firms have started to pay more attention to self-owned brands.

According to Dongguan's commerce authority, the number of self-owned brands developed by processing trade companies has tripled from 2,308 in 2008 to 9,111 in 2014.

Moreover, more companies have developed strengths in technology research and development. There are currently 1,750 processing trade companies which have developed their self-owned brands.

According to officials, processing trade companies have also developed e-commerce channels to tap the domestic market in recent years. E-commerce has helped local processing trade companies to expand sales in the domestic market, with domestic sales accounting for 36 percent of the total sales for these companies last year.

Wu Huizhen, manager of the e-commerce department at Ba-Ba Chidlren's Articles Co Ltd, said the company plans to shut a large number of physical stores this year.