Pump it up

Children play on an inflatable slide

From a 70 sq m office to a company with a 120,000 sq m plant, and from sales of $10 million to $100 million, Sun Pleasure Co Ltd is inflating as quickly as one of its diverse products.

Vincent Lau, founder and chairman of the private company, says solid research and development (R&D) and co-operation with world's top retailers, such as Wal-Mart, have paved the way for the pumping up of the polyvinylchloride (PVC) inflatable products manufacturer.

R&D

Lau is proud that many of the products developed by Sun Pleasures were done with its own intellectual property rights.

Lau, 37, studied engineering in the US from 1989 to 1993 and then worked for his father's business in Hong Kong for five years. He founded Sun Pleasure, an inflatable toy manufacturing company, in 2000 with only $30,000. The first pot of gold for him was $7 million worth of orders from three US companies at a trade fair.

So far, largely due to its active R&D, Sun Pleasure can produce a series of inflatable leisure products including tents, sleeping bags, sofas and swimming pools that are exported for middle-income consumers in Europe and nations such as the United States and Australia.

The Zhongshan, Guangdong-based company currently provides blow up goods and toys for many big names, including Wal-Mart and its arch-rival Carrefour, as well as world's top fast food chain McDonald's.

"Our competition propels us to increase our R&D ability which helps us to enhance the added value of our products, strengthen our bargaining power and sharpen our edge in the market," says the short and gentle Hong Konger.

A newly developed inflatable massage bathtub is Lau's proudest work. The tub's bells and whistles include heating, massage and water recycling and the technologies have registered patents in the US.

It costs $300 to produce and is sold at between $500-$600 in Wal-Mart stores in countries where traditional ceramic tubs retail for about $1,000.

Inspired by Wal-Mart's initiative in reducing packaging size due to environmental waste concerns, Sun Pleasure designed a board-pack method for inflated PVC products to replace the traditional box-pack. The new version not only saves paper but also aids loading and storage.

"Considering the paper, time and labor saved, transportation costs can be reduced by 10 percent from before," says Lau, adding that the method has been adopted by Wal-Mart worldwide for similar products.

Wal-Mart's SME strategy

Sun Pleasure received its first order - $7 million worth of inflatable mattresses - from Wal-Mart in 2003. At present, 22 percent of its business is directly related to Wal-Mart.

According to Wal-Mart, about 20,000 Chinese small and medium-sized enterprises (SMEs) have become its suppliers.

According to Andy Chan, director with Merchandising Global Procurement of Wal-Mart, over 95 percent of the merchandise in Wal-Mart stores in China is sourced locally and his department is responsible for procuring Chinese-made goods for the overseas markets.

Vice-chairman of Wal-Mart Inc Michael Duke said during his visit to China in February that the company bought $9 billion in directly sourced products from China and that he expects procurement in China to hold steady this year despite inflation and the appreciating yuan.

The Arkansas-based company's global procurement centers are in Shenzhen and Shanghai, where they source Chinese-made goods for its stores all over the world.

The goods range from needles and garments, produce and meat, batteries, electric appliances, stationery and housewares.

Cooperation with SMEs helps Wal-Mart reduce its costs and increase flexibility, analysts say.

Chan says that growing with local suppliers is a consistent strategy of Wal-Mart.

Compared with large companies, SMEs are also taking the upper hand at making customized products. They can adjust sizes to meet various demands in different marketplaces and provide small amounts of commodities to specific consumers.

Lau believes collaboration with retail chains such as Wal-Mart offers chances for his business to get clear idea of the international market and widen his horizons.

Sun Pleasures now has representative offices in the US and some other foreign markets, enabling it to expand its overseas presence and develop more products to satisfy consumers.

(China Daily 05/19/2008 page6)