Pauline Ngan utilises Hong Kong know-how and PRD resources to build her headwear brands

Next time you are wearing a sports cap by Nike, Reebok or Timberland, chances are it was produced in the Pearl River Delta (PRD) by Hong Kong listed Mainland Headwear Holdings Limited.

The company has become a global leader in the design, manufacture and distribution of licensed sports headwear exported mainly to the US. Mainland Headwear has bought licensing rights to more than 80 brands including the National Basketball Association, National Hockey League and film characters such as Superman, Batman & Robin and Scooby Doo.

Last year, it won the Export Marketing Grand Award in the 2003 Hong Kong Awards for Industry. Judges were impressed that "Mainland Headwear Holdings Ltd underlined a relatively new trend of Hong Kong companies - integrating with the resources of the PRD to build brands to boost sales and marketing share, rather than merely manufacturing to order (OEM)."

But the road to global success has not been easy, according to deputy chairman and managing director Pauline Ngan.

E-commerce advantage

"We started as a trading company in the 80s due to limited funds, but we've managed to expand by staying one step ahead, by having strong product development capability and one-stop services from manufacturing to distribution. We've developed an e-commerce platform that allows customers to record and retrieve product information, and even enables them to design their own favourite caps."

Customer service is a term Ms Ngan frequently uses. "My clients have been with me for a long time. They know they can always get me anytime of the day or night. We believe in value-added services to the extent of even providing clients with modern business centres and accommodation at our manufacturing plant in Shenzhen."

Ms Ngan believes that her company would not have expanded so fast if not for the proximity of the PRD. "We've had a presence in Shenzhen since 1992. It is so convenient having a factory practically at the back door. Both Hong Kong and China share the same language and culture, so it is so easy to do business."    

The hat and cap manufacturer employs over 3,000 staff and produces about 100,000 pieces a day. It maintains a head office in Hong Kong for financial management and customer relations. "Hong Kong is a good source of high-calibre individuals, and because it's so close to the factory, employees don't have to spend too much time away from their families."
 
Hats off to Cepa

Ms Ngan said the 2008 Beijing Olympics and the closer economic partnership arrangement (Cepa) would provide a lot of opportunities for Hong Kong companies. Mainland Headwear Holdings Ltd has signed a licence agreement with US headwear retailer Hat World Corporation to set up 300 retail "LIDS" shops in China and Hong Kong over the next three years. "Without Cepa, we wouldn't be able to open any shops in 2004. China has huge potential market and there are many exciting possibilities."   

The company maintained a 35 per cent gross profit margin for its manufacturing business last year and posted a 4.6 per cent year-on-year growth in net profit to HK$66.97 million (US$8.66 million).

Ms Ngan said she owed much of the company's success to "hard work, positive attitude and a very clear focus."

"A lot of people fail when they become successful because they have lost their focus. They start expanding and speculating in different directions. I've always believed we must be focused, innovative and be quick on delivery in order to maintain our competitive edge," she said.

"Mainland Headwear Holdings Ltd must keep on improving in the face of fierce worldwide competition, utilising product niches and value- added service to attract and retain customers."

Related link
Mainland Headwear