British company woos parents with its heritage brand name, service and quality
With the birth of Britain's royal baby, Prince George, having caused a sensation in China, it is hardly a surprise to see the royal family's choice of pram, Silver Cross, growing rapidly in the Chinese market.
Silver Cross, a 138-year-old brand whose prams have carried royal babies over the years, and now carry Prince George, has placed a special focus on the Chinese market, which is the only country where it has a wholly owned subsidiary despite the brand's global reach.
Silver Cross opened a flagship store last year in Shanghai's prestigious Plaza 66, becoming the only Western pram brand with a dedicated nursery store in China.
"China represents huge growth opportunities for us, and we want to expand in the country properly with our own team to support our distributors," said Chairman Alan Halsall.
"Chinese consumers are very discerning, and we want to grow in this market by demonstrating that we are there for the long term and willing to give them the support and best service they need."
Silver Cross traces its history back to 1877, when its founder, William Wilson, invented the world's first baby carriage.
The name Silver Cross has long been associated with royalty, having first supplied prams for the royal household early in the 20th century. It has grown to become one of the nursery industry's biggest players worldwide.
Nicknamed the Rolls-Royce of prams, the brand's most expensive product line, the Aston Martin Surf, developed in partnership with the luxury car brand, retails for as much as 3,000 pounds ($4,475). Silver Cross now sells to more than 70 countries worldwide, and over the years more than 10 million parents have been customers.
Over the years, however, the company's failure to keep up with manufacturing efficiency led to bankruptcy in 2002, and that was when Halsall saw an opportunity to make the brand great again.
"I felt that the future for a lot of brands is to have a heritage. I think if you have a good history then immediately you get trust," he says.
Since acquiring the brand in 2002, Halsall introduced modern management philosophy and efficient manufacturing strategies to the company, and also brought a global focus to the brand.
At the time, Silver Cross' products were only manufactured in the United Kingdom, with a factory in Yorkshire employing between 500 and 600 people. Halsall has decided to outsource about 90 percent of the manufacturing to China, and a small amount in Vietnam, leaving a team of around 20 workers in Silver Cross' new Yorkshire factory to focus on the signature lines.
"We kept the British design, but we manufacture in the best manufacturing countries in the world. And in my opinion, the best manufacturing places are the UK and China," Halsall said.
In the UK, Silver Cross produces three lines, the Balmoral, Kensington and Dolls Pram, which are its signature lines. Added together, the factory makes around 6,000 prams across the three lines every year.
Having previously worked in the toy industry and observed how efficient Chinese manufacturing can be, Halsall first found a manufacturer just outside of Shanghai called Goodbaby, and worked with them to improve their manufacturing quality to a standard acceptable for Silver Cross.
"Key to any cooperation is helping factories understand the importance of quality. We are very insistent that quality has to be at the top. We have quality control teams based at the factories, checking the production lines to make sure products are made as we have instructed," he said.
Such detailed quality control covers all elements of the manufacturing process, including the raw material, the manufacturing, packaging and labeling.
In 2010, Silver Cross also entered the nursery furniture market, producing items including wardrobes, beds, cots and drawers. Most of this furniture is manufactured in Vietnam.
Silver Cross first entered the Chinese market a decade ago with the establishment of a subsidiary in Hong Kong, run by Halsall's son. It has sales and market for the Asian marketing as its key functions.
Halsall says the choice was due to Hong Kong's location as a relatively central place to serve markets in Asia, Australia and the Middle East. In 2012 Silver Cross also established a store in Hong Kong's Ocean Terminal Shopping Mall.
Two years ago, Silver Cross decided to invest in the Chinese mainland market and set up a wholly owned foreign enterprise to support its Chinese distributor.
"We were not happy with just having a distributor in China. We wanted to be there to help them with the marketing and promotion. We also wanted to see how they do things in store, work with them to maximize sales," he said.
Silver Cross also provides training for staff in over 100 stores across China, to make sure sales staff understand the brand and the way the products function.
Silver Cross' current brand representatives in China are the pop star Zhang Jie, 32, and his wife, Xie Na, 33. The couple has many fans who are or will be young parents. They had a famous wedding in 2011, in Shangri-La, Yunnan province. Friends who attended the wedding including Chinese celebrities who host the television show Happy Camp together with Xie.
Silver Cross prams are sold in retail stores across first-, second-and thrid-tier cities and its products also retail on Tmall, the Chinese equivalent of eBay.
Halsall said that the sales of Silver Cross prams in China remain small, and the subsidiary has not yet reached the break-even point after having invested so much to tap into the Chinese market. But he believes profits will come in the long run, providing Silver Cross continues to invest in building the brand's reputation and products to suit Chinese consumers.
"We have to work with the Chinese consumers to deliver what they want, which is quality, high-end luxury products. The Chinese consumer is very discerning and expects a high-quality service. Given our office in Shanghai, we can offer the support the young mum in China needs to support her purchase."
Halsall agrees that the Chinese market is challenging and delayed entering it until he was confident that he had both the product and marketing knowledge required to make it a success, which he said is starting to show already.
