For many companies looking to export to China the aim is to find the perfect niche and to build towards a market share – which is what Dorset-based security systems manufacturer, TDSi, has done.
China has a reputation for being one of the key manufacturing centres for the global market. Producing a huge variety of manufactured products, from smartphones to Christmas decorations and training shoes, it’s not hard to find an item that is made in a Chinese factory. In contrast, the UK has a relatively weak production output. However, while Chinese businesses are offering high-volume wide-market goods, the UK is finding avenues through more specific products. TDSi reports that it has not only made inroads into the Chinese market, it is also done so with products that are designed and built in the UK as well.
With experience of selling to the Chinese security market, Managing Director John Davies believes it is partially testament to the quality perception of British goods, that has driven the company’s sales. He says: “It’s a simple fact that customers in China recognise the well-deserved reputation that UK goods have for quality. Whilst their local suppliers can offer you the cheapest, this doesn’t always equate to the best value for money. The Chinese security market wants quality and products which are the result of cutting–edge development – and it is willing to pay a premium for the best.”
So why would Chinese buyers specifically look for non-domestically produced products? John Davies believes it has a lot to do with the expectations the market has. He says: “The regional market has become a massive one, not just for producing and selling goods for local buyers and exports, but also in terms of needs inherent in a country which is growing quicker than ever envisaged. In my experience the market will often pay 15-20% extra for products people believe will be better quality and more reliable. Reliability is a popular attribute in China, as much as anywhere else. If an item fails to deliver it’s a bad investment, so looking to pay the very lowest price all the time is often seen as a bad move.”
Having a reputation for reliability is a key selling point in the Chinese security market, says John Davies. “We have a long standing relationship with several Chinese and specifically Beijing-based, telecoms companies that use TDSi products. After over 16 years of faithful service from our solutions, these customers regularly repeat buy from us – it’s a great example to take to the marketplace and has proven to be very well received. The Chinese security industry is a close-knit one, with many key people knowing one another – often from having worked in military, police and state security roles in the past. These are professionals who understand the needs of security and will look for the very best they can obtain to protect their organisations, rather than trying to save a little bit of their budget on cheaper/inferior alternatives. Having an excellent reputation for quality is often more valuable than simply trying to raise your profile in a sometimes overcrowded marketplace.”
In 2015 TDSi will be marking the 20th anniversary of its sales in the Chinese security market. John Davies says: “We realised very early on that any manufacturer in the security industry needs to be paired with the best local partners to truly penetrate any market. It’s the case in the UK and especially important in China. As the market has grown so have our partners and our reputation together. Naturally this also attracts the best local security industry talent and I believe that in combination with our own determination, investment in technology and product development, this has greatly added to our longevity in the Chinese security market.”
So how has TDSi managed to keep its production in the UK? “Because of the nature of our solutions and the market we operate in the volume of products, compared to a mass consumer market, is quite low. In terms of economies of scale it still makes sense to manufacture in China, but for smaller numbers it is very competitive to produce in the UK. Equally, we sell to markets around the world so producing in the UK near our Head Office and distribution centre in Poole makes a lot of sense from a logistics point of view. We can manufacture items and send them to wherever they are required very rapidly. Also, in the case of selling to China the goods don’t have to be shipped to the UK from a Chinese plant, only to make the return journey once we have sold them!”
John Davies also believes TDSi in the Chinese security market could be an example for many businesses looking to sell into China: “Rising labour costs in China have made a huge difference to the feasibility of selling UK made goods into the local marketplace. Equally it is possible to take advantage of the positive reputation of UK manufacturing to export well-targeted and high quality products. By finding the right local partners and being sensitive to the needs of the Chinese market there is no reason why UK businesses can’t win a good share of one of the biggest markets in the world.”
