Luckson founder Eric Panciulo knows quality control is imperative when building a brand internationally

French entrepreneur Eric Panciulo wanted to create one of the best soft toys brands in the world - and he knew that Hong Kong was the place to do it.

Luckson Developments Ltd was established in 1989, originally as a trading company, which later moved to manufacturing. Using an in-house team of creative designers, the company developed the Kaloo brand of high quality plush toys, which are now exported to over 35 countries.

Today, the company has its headquarters and R&D centre in Hong Kong, a modern factory in the Pearl River Delta in southern China employing 700, a marketing division in France and a branch office in the US. Mr Panciulo believes he could not have achieved this anywhere but Hong Kong. 

"Hong Kong is a fantastic place to set up a business," he said. "The procedures are simple; there is a strict and clear legal environment; accounting rules are easy to follow; and the taxation system is "soft". Hong Kong's labour laws are very favourable to SMEs (small and medium-sized enterprises) and the people hard working. There is also a ready availability of multilingual, multinational employees - on our staff alone, for example, we have people from Hong Kong, Singapore, France, Belgium and China.

A vertical city

"Hong Kong is a vertical city, where every thing is close by. All the services one might possibly need to set up a business are easily accessible. You can be at the airport in half an hour to pick up a customer in the morning, visit the factory in the PRD in the afternoon, and meet with your banker in the evening if you want to. The ability to do many things in one day is one of the keys to success in business, especially for an entrepreneur."

While Kaloo plush toys remain its core business, Luckson has expanded the product line to include a highly successful infant perfume and a full range of nursery furniture and accessories.

Mr Panciulo says the Hong Kong/PRD business model (that is, locating the head office in Hong Kong and the manufacturing plant in the Pearl River Delta) had proved to be a successful formula. It delivers world-class business administration and product design together with cost-efficient production.

The ability to oversee quality control, which is easily done when head office is so close to the factory, is critical when producing a high-end product, he said.

Transparent manufacturing

"The PRD is the best place in the world for manufacturing, and while of course we face competition from the north, I believe this is unfair competition. The PRD is a developed area where there are rules, labour laws and a welfare system for the workers. We pay taxes and our factory is an open door where authorities may come in and check on wages and conditions if they wish. A lot of factories in the north may not have these obligations.

"For a company like ours, which has a strategy of quality and is building a brand internationally, these factors are imperative. Nowadays, in the face of world competition, manufacturers need to be reactive and fast. We need to have lots of meetings and face-to-face communication, and most importantly control quality - which means maintaining close links with head office.

"Hong Kong will always be the headquarters for Luckson. Besides the efficiencies it offers, Hong Kong is a permanent showplace for all of the world's major brands. We don't foresee considering anywhere else."

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