Creating Extra Value with Supply and Demand Chain Services
EXTRA founder, Paul Bartels, found Hong Kong provided an effective business platform to serve international customers and manage supply chains
Building on its origins as a Hong Kong-based trading company, EXTRA International Group Ltd., provides integrated supply-demand chain management services that create product value for customers worldwide.
American entrepreneur Paul Bartels, who founded EXTRA in 1992, believes that few businesses today can survive for long by simply sourcing low and selling higher.
"You have to create additional value, managing both the supply chain and the demand chain, and linking the two."
"We're not just dealing with products anymore; we also deal in services that are critical to creating additional value in products. EXTRA can provide our customers a whole package of services from product development, design, sourcing and production management, all the way forward to retail concepts, packaging, displays, market testing, distribution alternatives, print catalogues and Web-based promotion. For some customers, we've even developed complete IT solutions for inventory management and ordering."
Innovative design and marketing
EXTRA's customers include leading mail-order catalogues, retailers, e-retailers and wholesalers in the U.S., UK, Canada and Australia markets. Product items are diverse, generally within the categories of home accessories, gifts, fashion accessories and timepieces, and home health. "The unifying theme is that our products sell well because there are elements of design, innovation, practical solution, and quality."
There is constant pressure on EXTRA's customers to find new products especially with consumer product cycles getting shorter. In addition to working on original design manufacturing (ODM) items, EXTRA is able to test-market new product concepts selectively through its network of marketing affiliates and partners. This helps to streamline product development, as well as reduce the time, money and risk for customers trying to determine if the new is also hot. Regular market feedback becomes a springboard for the next round of product ideas, once more linking the demand chain back to the supply chain.
EXTRA helps create value on the demand chain side by managing the design and production of 20-30 print catalogues and 30-40 ad inserts a year for mail-order customers. "Typically, a catalogue may have 200-300 items. We know each product intimately. Once we understand our customers' marketing requirements, our in-house photography studio and graphic designers can create the best product shots, layout and advertisements. We can also use our IT capabilities to help customers develop their Web sites or Web-based sales media. The cost factors for our customers are compelling, with additional savings from our scaleable operations."
For retailer customers, EXTRA uses its capabilities to develop new retail concepts, packaging and sales displays, and brands. "These three elements are critical for enhancing product retail value, especially for gift and fashion items. Retailers are thrilled we have the savvy and skills to work with them on these aspects."
SME business platform
Like most small and medium-size enterprises (SMEs), EXTRA keeps lean and mean with a total team of around 90 worldwide: 35 in Hong Kong; 45 in Shenzhen, Shanghai, Ningbo and Fuzhou and other Mainland of China sites; and 10 overseas.
Mr. Bartels prefers to keep the Hong Kong office as the hub for design, creative and IT work, sales, marketing and distribution, while his mainland offices focus on sourcing, merchandising and quality control.
Hong Kong provides a business platform from which EXTRA can effectively and efficiently link with international customers and marketing networks, while coordinating its supply chain in China and the rest of Asia. "Our Hong Kong team has the tools, skills and understanding to conduct demand chain work with our customers and partners. We must be in Hong Kong to get new ideas and new information for our partners and for the websites. Our Mainland teams then do the merchandising and the sourcing. It works very well."
Mr. Bartels added: "For an SME like us, there is really no place like Hong Kong with its clear regulatory system, low tax structure, rule of law, and safety in doing business. If anything goes awry with a business dealing, there are clear procedures and mechanisms to deal with it. The city is efficient and you get things done much faster than anywhere else in Asia. And all our customers like to visit Hong Kong for both convenience and comfort.
"We provide products plus services that create additional value in products, so Hong Kong's advantage of easy accessibility for information and travel is critical. Our business requires us to be plugged in to news and market intelligence in various time zones and this we can do easily from Hong Kong. With Hong Kong's proximity to China, if there is a supply chain issue that requires my attention, I can be there the same day or the next. And as China gets more expensive, our customers are more interested in sourcing elsewhere in Asia. Hong Kong is just five hours away from any place in Asia."
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