Worx works way into power tools arena

Chances are that on a visit to a hardware store in the United States, you would notice that Chinese autumn-cleanup tools are among the best-selling products, giving Germany's Bosch, the market leader, stiff competition.

Before crediting the sales to lower prices of made-in-China goods, take a second look: Worx products are actually more expensive than Bosch.

And that's not all. The cordless, lightweight Worx grass-trimmer won an award from the US Electronic Retailing Association in 2010 for its quality and innovation. Plus, GFK, a European research company, says some Worx products are even outselling Bosch in Germany.

The man behind the brand is Don Gao, president of Positec, a company based in the eastern city of Suzhou that makes power tools, lawn equipment and accessories.

"It's not easy to make inroads into well-established markets such as the US, Germany and Britain because customers are loyal to local brands. But we did it, step by step," he says.

When it was founded in 1994, Positec was a trading company engaged in exports of power tools, such as hand drills, trimmers, chainsaws and mowers. Business was good, spurred by the country's foreign trade. Yet Gao knew the company had to grow beyond trading and, in the long run, had to have its own products.

So, in 1995, he opened a factory in Suzhou, Jiangsu province, to make products for large home improvement retailers overseas such as Sears, B&Q and OBI.

Positec was not aiming to be a glorified original equipment manufacturer, Gao says. OEMs typically dream of making products for industry leaders such as Bosch and Black & Decker, but he was aiming higher.

"We have no say in pricing because you always find someone sets prices lower than yours. The cutthroat competition in China squeezes profits for many traditional producers," he says, adding that in 1999 it led him to decide to launch a brand. "The shift meant your old partners became your competitors, so you face a huge risk of losing orders."

The risk was real and, to be sure, huge: turnover that year plunged by $50 million. Some erstwhile partners even threatened to withdraw existing orders.

After several years of efforts and research, Gao launched the Worx brand in 2004. In the same year, Positec acquired Rockwell, an established US brand founded in 1945.

Yin Jie, an adviser on brand management to many consumer goods makers, says Positec, in order to avoid competition with local brands, took a shortcut to gain local resources in the US.

"The Rockwell acquisition was a quick way to squeeze into a foreign market and help the company build up reputation and a distribution network," he says. "Sometimes, we've good products, but we don't know how to promote them in a new market."

Positec spent about 15 percent of its annual revenue on TV commercials and online social media promotions. The campaigns worked so well US sales almost doubled, even during the housing crisis between 2008 and 2010.

Gao says the key to winning a marketing battle lies in what he calls product innovation. "Consumers don't care about the technology you put into products. They only care about whether it works well when they are cleaning up their gardens or assembling their own bookshelves," he says.

lvchang@chinadaily.com.cn

( China Daily Africa Weekly 07/29/2016 page25)