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Standing In The Clouds

Filed under: Uncategorized

From Counselor Senior Writer Dave Vagnoni, our guest blogger who’s reporting from the land of China …

Just got back a little while ago from a VERY late dinner where I visited with distributors from four different continents. The table conversation was direct and engaging. It’s true that a salesperson in Brazil faces different challenges than a salesperson in Japan, but the bottom line is they’re both still trying to do one thing – convince clients and prospects that promotional products are a great way to advertise.

Certainly, selling direct was a topic of heated discussion at dinner. Here’s my simple take on a complex subject. Hey, we know some distributors bypass suppliers. We also know some suppliers cut out the distributor and sell to end-users. This is reality. It’s not going to change. The companies that display the most integrity are the ones that have the most staying power in the industry. Margins might be trimmed sometimes, but there is money to be made through ad specialties. If you’re not making it, your competitor will.    

Now, onto the rest of my day. It started with a breakfast meeting with Gene Geiger and Jo-an Lantz. I interviewed Jo-an on camera to get a domestic distributor’s take on the role of China in the industry. You’ll be able to hear Jo-an’s thoughts in a video to be posted in a few months. Gene, as always, also had some sharp insight, too. His comments will be included in my Counselor feature later this year.

I also had the chance to spend time today with Philippe Varnier of Polyconcept and Trevor Gnesin of Logomark. I asked them what country could eventually emerge as the next China. Philippe said it could be India. Trevor said it could be North Korea. After our respective interviews, as a parting gift, Philippe gave me a pen. Trevor, meanwhile, offered me gifts – as only he can – that can’t be written about in a blog. If you know Trevor, you can understand what I’m talking about. If you don’t, he’ll be at the ASI Show in San Diego. Be sure to say Hi.

Also today, on the advice of ASI’s Ron Ball, I journeyed to one of the top tourist spots in all of Hong Kong – Victoria Peak. The site attracts seven million visitors every year and is home to private residences and four signature restaurants. The view itself today was incredible, although much different than the scene you often see on postcards. Today was rainy, dreary and foggy here. Being up so high (nearly 2,000 ft. above the harbor), it’s as if I were standing in the clouds. Literally, it was like being surrounded by blankness.

ASI Publisher Rich Fairfield (who came along) and I couldn’t even see the water from the highest overlook at the peak. We certainly couldn’t see the stunning city skyline. Hong Kong was basically invisible. Our enthusiastic cab driver kept urging us to come back on Sunday when the weather is predicted to be nicer, even though we mentioned at least four times that we’re leaving Hong Kong on Saturday. It’s all the more reason for me to make a return visit here someday.

Before I sign off for the week, I want to thank everyone that helped me along the way, especially Danielle and Randee from Dard. What great people! They’re down-to-earth, hard-working, sincere and very patient. I hope you’ve enjoyed the blog. I’m sure I’ll write a few entries again sometime in the future…from wherever I am. Please keep in touch. Zai Jian!

-Dave

Hong Kong's Victoria Harbour
Danielle and Randee helped this group of children with a school project this morning.
Easter Eggs in Hong Kong China
Here I am with one of the supplier mascots at the Hong Kong Gift Fair.
Shower in Hong Kong
I enjoyed dinner with distributors from all over the world.
Shower in Hong Kong
My treat to myself after a busy week in Hong Kong.
   

Noodles, Novelties and Things I’ve Noticed

Filed under: Fun, General

From Counselor Senior Writer Dave Vagnoni, our guest blogger who’s reporting from the land of China …

On an especially hazy day here in Hong Kong, I had breakfast with Danielle and Randee from Dard, along with Ross Beaton of Australia’s Logo-Line. Ross, who’s a former Counselor International Person of the Year, has been trying for days to get me to eat how the locals do (that means eating fish that stare back at you). He’s also been pushing Peking Duck, which is not on my top 10,000 list of things to eat. Sorry, Ross.

As a compromise, I did decide to take baby steps toward enjoying Far East cuisine by sampling authentic Chinese noodles this morning. Now, in America, a similar noodle dish would come with broth and maybe mushrooms. Real Chinese noodles, though, can come with exciting additions like fish balls. I opted for spinach noodles in a broth with some unpronounceable green vegetables, a bit of pork (I think) and, yes, a few of the aforementioned fish balls. While it was, I admit, a tasty dish, I’m still craving Italian food. A burrito doesn’t sound bad either.

After breakfast, I went to a press conference hosted by Jeffrey Lam, the chairman of the Hong Kong Gift Show organizing committee. He had some interesting things to say about pricing, labor and exporting – both in his general remarks and to me in our sit-down interview. He told the audience – a group of about 20 members of the international press – that he expects labor costs in China to increase 10%-15% every year for the near future. He admitted manufacturers in China face serious challenges related to inflation and the rising costs of raw materials.

He also said he anticipates the U.S. dollar will remain unstable and may even “tumble” in years to come, while Chinese currency will hold its value, he believes. Here’s part of my Q&A with Lam from this morning. There will be more to come from this interview online and in Counselor magazine.

Q: How can companies really know that products manufactured in China are safe and compliant?

A: Hong Kong has a very mature testing industry. The international companies are here and the labs are here. They are here to help the industry test their products. All the manufacturers do test their raw materials and also the finished product before shipping. I’m sure they can provide the buyers with the certificate about the safety aspect of the product. You know, this is something that the buyer should ask for and the supplier should supply to buyers. Hong Kong, like the toy industry, works very closely with the U.S. importers and U.S. toy companies on certain safety standards. I know all the toy products made here comply with the U.S. and international regulations.

Besides talking with Lam, I also had the chance to meet with several other show suppliers – some from the industry and some that aren’t. One company I spoke to manufactures those really elegant greeting cards sold in the U.S. by retailer Papyrus. Another company supplies housewares and gift items to Pier One and Bed, Bath & Beyond. A third supplier – from Japan – showed me a bunch of relief-from-the-heat novelties that he hopes to soon introduce to companies in North America. The items were pretty clever and have promotional potential. If you want more details, shoot me an email at dvagnoni@asicentral.com.

Following the press event, I spent a very educational hour with Jeff Lederer from Prime Line. As he met with a factory contact, I watched him literally take a pitched product and create a design for a new, multi-use pen that I think is really going to do well in the industry. Jeff is also extremely knowledgeable about compliance issues. Our conversation will be part of the video I’m putting together, plus the feature I’ll be writing for Counselor.

As I was walking the streets of Hong Kong today, I realized my time in China is passing quickly. With fondness, I thought I’d type out a few things about China that I’ve found particularly odd, humorous or just plain surprising. Here goes.

  1. Metal scaffolding isn’t used in China. It’s all about bamboo
  2. People drive on the left side of the street in Hong Kong, but on the right side on the mainland.
  3. “Exact” change here is more like “approximate” change.
  4. Yellow lights come before green lights, instead of after.
  5. The humidity in Hong Kong is 200% every day. Don’t believe me? Come visit in the afternoon.
  6. Business cards are given out here with two hands and a bit of a bow.
  7. Cars cost twice as much to buy on the mainland compared to Hong Kong, because of enormously high taxes.
  8. Blue skies in Hong Kong are a myth. The sky is bright white…all the time.

OK, back to my trip. Tomorrow, after some early meetings with industry folks, I’ll be headed to Victoria Peak and, if all goes according to plan, I’ll close my Friday with a trip to the night market. Anybody have souvenir requests?

-Dave

Hong Kong's Victoria Harbour
These high-end greeting card designs are offered by retailer Papyrus.
Easter Eggs in Hong Kong China
Jeffrey Lam, chairman of the Hong Kong Gifts & Premium Fair, speaking to a group of international press.
Shower in Hong Kong
Here’s my breakfast bowl of Chinese noodles.
   

The World’s Largest Gift Show

Filed under: Fun, General

From Counselor Senior Writer Dave Vagnoni, our guest blogger who’s reporting from the land of China …

Find in your mind an image of the busiest ASI Show you can remember. Now imagine a show at least five times bigger, held on three separate floors in giant halls and concourses, with more than 4,070 suppliers – that’s the Hong Kong Gifts & Premium Fair. The grandiose event is billed as the largest of its kind in the world, this year hosting exhibitors from 36 different countries.

Suppliers here are not only trying to sell products, they’re also looking for new and different items themselves. That means buyers include distributors AND suppliers alike. Promotional products are just a part of what’s on display at the Gift Fair. You can find everything from vacuums to electric-powered butterflies to ribbons. The booths, which are largely pre-built for suppliers, range from simple cubicle-like setups to ornate 20-foot high toy castles.

In contrast to an ASI Show, you don’t see much apparel at the Hong Kong Fair. I passed a few Gildan racks, but that was it. Electronics, though, are extremely popular here. While there weren’t any products that wowed me, some of the coolest items were in the tech category. Among a handful of things I hadn’t seen before were colorful 3D cell phone cases, waterproof cell phone pouches and crystal Bluetooth headsets (some pics are below). I also thought the “Push-A-Plant” product was unique for green marketing. With a push of a button, a plant starts growing out of Lego-looking base without needing water for an entire week.

Once again on Wednesday, I shadowed Danielle and Randee from Dard, filming them at their booth, on the show floor and at new product meetings. Buyers from all over the world (Ireland, Saudi Arabia, Australia, Nigeria and Mexico, to name a few places) visited Dard’s booth to see patented items. Throughout the day, the product hunt continued. Danielle (who is living on grill cheese sandwiches, Raman noodles and other just-add-water delicacies) brought along with her to the Fair a shopping list from customers. She clearly has a keen eye for design. I’ve noticed Randee on the other hand (who has a much more adventurous palette) seems more impressed by practical items. 

Their balance of opinions was evident during a late-day meeting with a China factory representative that showed off 50 or so products. Danielle and Randee made a series of snap judgments, deciding whether a particular item would play well in their product line and in the ad specialty industry. If there was a brand-new product they liked, they asked the factory for exclusivity. In other cases, they had to weigh whether taking on a product would make sense if a competitor has already started ordering large quantities. There were maybe three or four products Danielle and Randee really loved in the stationery line. I’m sworn to secrecy but I suspect they’ll be offered solely by Dard in the near future.

So, to recap, while I didn’t spend 18 hours in the air or get detained by customs agents, Wednesday was still an interesting and exhausting day. I can’t stress enough how massive the Gift Fair is…and how diligent suppliers must be to assure products manufactured in China are stylish, yet socially compliant.

Tomorrow, I’ll be back at the Fair interviewing industry suppliers. Plus, I’ll have an exclusive as I visit with Jeffrey Lam, the chairman of the organizing committee for the Hong Kong Gifts & Premium Fair.

Finally for now, thanks everyone for your emails. Please keep them coming at dvagnoni@asicentral.com. Although I won’t be buying any designer suits per one person’s advice, (there are pretty big discounts here on clothes) I will be following a suggestion to visit Victoria Peak for a great view of Hong Kong.

Until tomorrow…

–Dave

Hong Kong's Victoria Harbour
These new “Press-A-Plant” products have potential to be unique promotional items.
Easter Eggs in Hong Kong China
Expect to see much more of these 3-D cell phone cases.
Shower in Hong Kong
Even submerged in water, a cell phone will keep working in this pouch.
Shower in Hong Kong
No, this is not your ordinary flip-flop.
Shower in Hong Kong
One of the most intricate booths at the Hong Kong Fair in 2011.
   

Detained At The Border

Filed under: Fun, General

From Counselor Senior Writer Dave Vagnoni, our guest blogger who’s reporting from the land of China …

My second full day in China began with a cab ride from my hotel to the Star Ferry. If I didn’t know any better, I would’ve thought I was involved in a car chase. The driver swerved, then stopped. Sped up, then slammed on the brakes. I found myself holding onto the seat in front of me just to keep my balance. Picture a cab ride through New York City with narrower and curvier streets.

When the thrill ride ended, I walked to a lower port terminal to take the ferry across Victoria Harbour to Wan Chai. The fare was incredibly cheap – $2.50 Hong Kong dollars or roughly a quarter in U.S. money. The boat was filled with people – many with newspapers or cell phones in their hands – on their way to work. The five-minute ride left me within a block of the Hong Kong Convention & Exhibition Centre where the large gift show will begin on Wednesday. Attached to the Centre is the Renaissance Hotel where I met the amazingly helpful Danielle Ruiz and Randee Horwitch from Dard.

While Danielle went to her office for some meetings and show prep, Randee and I, along with our translator and tour guide Polly, took a van into mainland China to visit one of Dard’s factories. The trip was mostly along three-lane highways and the writing on the road signs gradually changed from a mix of English and Cantonese into Mandarin-only. We drove through Shenzhen to Dong Guan (Dongguan), whizzing by impressive buildings, fruit and flower stands and tons of construction workers. The roads are well maintained and the infrastructure is much better here than in cities farther inland.

The factory wasn’t what I expected and the quality of life for the 300 workers is better than a naive Westerner might think. The average worker earns 3,000 RMB or yuan (about $500 U.S.) each month, but has room and board provided. Workers live in a dormitory adjacent to the factory and receive three meals a day. They typically work from 8:00 a.m.-5:30 p.m. Monday through Friday and can leave the gated factory space at night to go into town. The factory grounds also have a soccer field and basketball court.

We watched as workers put together, at various stages of production, items like ergonomic mice, pedometers and music players. Every step of the production process is done here – from molding to printing. You can read much more about my factory tour – including my sit-down interview with a worker and my first time eating dried fish and an egg popsicle – in an upcoming issue of Counselor.

And now, for the highlight of the day. On our way back to Hong Kong, we, of course, needed to pass through customs and immigration. No big deal, right?

At the third of three checkpoints, we (our driver, a factory manager, Randee and I) found ourselves waiting an awfully long time for clearance. The light ahead of us stayed red. Other cars on our right and left were being let through. Not us. Every so often, a customs agent peeked his head out of a small sliding glass window. The factory manager, a man named Michael, assured us nothing was wrong. Then, all of sudden, another agent came rushing up to the side of our car. A siren blasted behind us. The agent asked to board our van so he could escort us to another checkpoint area where we’d be searched. Randee – a bit unnerved as it was– was forced to practically sit in my lap to make room in the car for this customs agent, who didn’t speak English and didn’t have anything close to a smile on his face.

We arrived at this other checkpoint and were told to get out. Our belongings were taken out of the back of the van. By now there were four or five other agents walking around us. Imagine what I was thinking. They’re going to confiscate the camera, smash the memory card and break the tripod in half. Turns out my mind overreacted a bit. We were, though, taken to an X-ray room where all our things were put on a conveyer belt. That apparently wasn’t a convincing enough inspection because we were then taken to a small room with white walls, four chairs and a table. The agents again opened our bags. Poor Michael had everything inside of his suitcase taken out and displayed on the table.

After this part of the search was over, we were told our van was going to be driven through a giant screening machine. We were asked to sit in this little room and wait…and wait…and wait. Finally, handed our bags, were given the OK to leave. Everything was intact except maybe our sanity.

The entire screening process took 45 minutes and the agents thanked us for our patience. Of all of the hundreds and hundreds of cars passing through customs and immigration on this day OURS was the vehicle chosen for a thorough screening. We must’ve been part of a glorious training exercise. Lucky us.

At least I’ll always have a good story to tell – one that I’ll be sure to embellish over the years. Hey, how many other people can say they were detained at the China border? I’ll have much more on my trip tomorrow with coverage from the Hong Kong Gifts & Premium Fair.

 

–Dave

Hong Kong's Victoria Harbour
The inside of a port terminal in Hong Kong.
Easter Eggs in Hong Kong China
These red ABS plastic pellets are used to make products.
Shower in Hong Kong
One of several plastic injection molding machines at Dard’s factory outside of Shenzhen.
Shower in Hong Kong
A view of the workers’ dormitory.
Shower in Hong Kong
Workers piece together components for electronic items.
   

The Year I Skipped Easter

Filed under: Fun, General

From Counselor Senior Writer Dave Vagnoni, our guest blogger who’s reporting from the land of China …

It definitely was an odd feeling to leave Philadelphia Saturday morning and finally arrive in Hong Kong late Easter Sunday night. A delayed flight, three-quarters of a day in the air and a 12-hour time difference does tend to rearrange what seems normal. I wound up spending those “missing” hours catching up on some sleep, eating better-than-I-expected airline-provided Chinese noodles and watching in-flight movies (wish I would’ve dozed off during Gulliver’s Travels rather than The King’s Speech).

Fortunately, my bags made it to China despite almost being lost in Chicago. Apparently, the destination tag fell off my luggage in transit from Philly. A U.S. Airways representative was nice enough to call me after seeing a contact card and find out where my next stop was. Otherwise, who knows where all my clothes would be now. 

My trip from the Hong Kong International Airport to my hotel – The W – lacked for drama and I’m grateful for that. The poor driver kept apologizing because more than once he flipped on the windshield wipers rather than the turn signal. He didn’t seem to be a fan of Japanese-made cars.

My first impressions of Hong Kong were comforting. It’s amazing how familiar things can look in a strange place. We crossed over a spitting image of the Golden Gate Bridge, dealt with the hassles of some late-night highway construction and passed sign after sign that read: Don’t Drink and Drive. It did take me a while, though, to get settled in my hotel room. I stared at the shower for a few minutes before I figured out how to turn it on (see confounding image below). I suspected operator error when I couldn’t quite get the plug adapter to work. Turns out it was just broken. I couldn’t believe in-room Internet access was $40/hour. Then I remembered to convert the currency and the price significantly dropped.

TV here isn’t quite what I’m used to in the U.S. There are versions of ESPN, CNN, CNBC and Fox News, but there’s a clear programming time lag. I quickly lost interest in the Yankees/Orioles game when I already knew who won.

So there you have it. That’s a recap of my first hours in Hong Kong. Here’s what you can expect during the coming days: Over the next week, I’ll be following around a few of the good folks from Dard Products. We’ll head to a factory in Shenzhen, experience the massive Hong Kong Gifts & Premium Fair and haggle to get some deals in a local marketplace. I also plan to interview other industry execs who are here in Hong Kong, as well as some locals to get a sense of trade/labor challenges (and benefits) in Asia. I’ll be taking pictures wherever I am for a slide show, plus I’ll be shooting video that will eventually be turned into a TV-type report, similar to what you might see on the local news (that’s the goal, at least).

If anybody has any ideas for places for me to see, or just wants to say hi (either in-person here in Hong Kong or from back home), email me at dvagnoni@asicentral.com.

And by the way…Happy Belated Easter!

–Dave

Hong Kong's Victoria Harbour
This is Hong Kong’s Victoria Harbour packed with dozens of ships.
Easter Eggs in Hong Kong China
There was a touch of Easter at my bedside table.
Shower in Hong Kong
Here’s the fancy shower that made me scratch my head.
   

 

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