Investing in brands

For some years now the China National Hardware Association has been encouraging its members not only to promote their OEM business but also to develop brands of their own. JJ Tools is one company that has taken this advice thoroughly to heart and is putting it into practice in a thoroughly professional way. Founded in 1995 and headquartered in Ningbo, the company has been building up the Fixman brand since 2008 and selling tools and cabinets/tool containers under this brand name. More interesting in terms of strategy, though, is that JJ Tools has built up its own marketing network: 370 shops in 45 countries sell Fixman products, and 60 per cent of these, including ten stores in Dubai alone, stock this one brand exclusively. Since 2012 the company has been in Australia as well, with a dedicated sales agency that numbers Mitre 10 among its customers. Significant growth countries tend to be located less in the Middle East or the established industrial nations and more often in the emerging markets of South-east Asia, South America, Africa and eastern Europe. Mind you, western Europe still accounts for 30 per cent of the company’s sales. Fixman shops across the globe all come with a uniform POS look. “We invest heavily in advertising, promotion and marketing,” says President Boa Jiangang. Last year the figure came to RMB 5 mio. The independent operators of the shops are given assistance in accordance with a graduated system: those achieving a certain rate of increase are credited with five per cent of sales in the form of an investment grant for the shop fittings. The company is active in two market segments. Around 70 per cent of sales are made with DIY and OEM products, as well as products for semi-professional applications, and 30 per cent with professional tools for car repair garages. The goal is to have both segments equal in size within two to three years. JJ Tools has a production facility 55 000 m² in size. The company employs a workforce of some 400 in production, sales and design. Bao Jiangang lists three points that JJ Tools intends to use to differentiate itself from the competition. First comes the dedicated research and development department with a staff of 30. The company is proud of its cooperation with Zhejiang University here – and of the 87 patents it holds. The second point named by the company’s boss is its total of 18 years of experience in the industry, which he also sees as the reason for advantage number three: the fact that the…