Mr Petto Ng, founder of FX Creations International Ltd.

"Yesterday's failure is today's history. What the most important is that we have to grasp the opportunities for a better tomorrow!" Mr Petto Ng, founder of FX Creations said. In this interview, Ng will share with us how brand was created that surprised the world.

The Beginning

In the beginning, Ng mainly ran a premium gifts business. However, keen competition made international market penetration difficult. As a result, he resolved to switch to a product that would arouse international attention. "My partner and I thought that the brand must be original; at first, we wanted to specialise in watches, but we could not bear the high development cost. On the other hand, the cost of developing handbags was lower and it offered more room for creativity. In this way, FX Creations, which specialised in handbag products, was born."

Creative Brand Building

The first generation of handbags were mainly original designs with non-traditional elements, using shiny enamel leather to produce handbags with a toothpaste, television, pencil case, and even with road sign and license plate style and look. The sales volume of these products was satisfactory in European countries, such as the UK, France and Italy. However, consumers began to pay more attention to the practical aspect of the product after a few years. As a result, FX Creations had to alter its business model.

The retail business of FX Creations began with an unexpected opportunity. At an exhibition, Ng met a SOGO merchandiser who thought that FX Creations was special enough to deserve a retail counter. "That was December 1996; we didn't plan on having any retail businesses at that time. However when opportunity knocked, we believed that we should try our best to achieve the goal and it was also a good chance for us to test the water in the market." Ng recalled, As a result, the retail counter in SOGO became the first retail location in Hong Kong.

Seeking Opportunity in Crisis

In 1999, the first FX Creations outlet was established in the Gateway Arcade at Harbour City. "It was in the later period of the financial crisis, and with the economic downturn, there were only a few occupied shops in the Arcade. We seized the chance and rented a shop with low rent. Now, the current rent of the mall is 7 to 8 times higher," he noted.

The financial crisis has brought opportunity to FX Creations. With the low rent and success in securing loans from the bank after the financial crisis, FX Creations recorded major expansion during 1999 to 2000. They have launched five to six more outlets in large-scale shopping malls and have enjoyed satisfactory sales volume.

Opening Mainland Market through TV Commercials

After developing the Hong Kong market, Ng started to develop the mainland market and established his brand's own selling points and franchises five years ago. "We have franchisees to manage businesses in every region!" Ng said. He pointed out that the mainlanders still believe that leather products represent luxuries and that female customers are more willing to pay for high-end handbags to flaunt their real or imagined social status. So, when FX Creations started to use snake skins as materials for making handbags, these products finally became very popular among customers on the mainland.

Moreover, Ng also emphasized that TV commercials helped to bring the local brand into the mainland. "It is very important for the target customers to know about local brands in Hong Kong. Therefore, we advertised our brand through TV commercials, and let the mainland market become familiar with us," he said. It proved that the strategy worked since FX Creations becomes more and more successful on the mainland. Hoping to build on that momentum, Ng said that more resources will be allocated in developing the mainland market in the future.

Stand Strong in a Sales Downturn

How Ng has dealt with the economic downturn this past decade? "I will never forget the downturn during the 911 incident and the period of SARS. Our sales were seriously affected, since people spent less on consumer products during those periods. To stabilize our business, we first controlled our operational expenditures. Afterward, we investigated any solutions that could improve our competitiveness and enhance internal communication among staff. These coordinated approaches finally led us to a brighter future."

"If we do risk management well and forecast the worst situation before it happens, even if a crisis comes, we will still able to respond immediately and avoid any major pitfalls." Ng advised.

Tips for Young People

When it is hard to establish a brand, it is even harder to make the brand being a well-known one. What Ng would advise young people to do if they want to establish their own brand?

"To create a successful brand, the first requirement you should have is creativity. Before deciding to start your own business, it would be better for young people to work as staff for few years to gain more experience that would allow them to distinguish the difference between TRAP and OPPORTUNITY."

Ng also cautioned that young people who give up their goal easily should not start a business, because perseverance and determination are very important when developing a successful brand. If they give up everything easily, they cannot stand strong in the face of a downturn.

Epilogue:

Ng shared many valuable experiences in creating a successful brand during the interview. Through his determination and creativity, FX Creations is now a well-known brand all over the world!

(HK Edition 10/29/2009 page3)