"Rihanna likes Totes' umbrellas, so her record company ordered 15,000 pieces from our company through Totes," Yvonne Mao, an Enson sales manager, said July 12. "In addition to being props in music videos or at live performances, those umbrellas were used as gifts for promotional activities."
"Taiwan used to be called 'The Kingdom of Umbrellas,'" Jackson Lee, president of Yamaiji Umbrella Mfg. Co., Ltd., said July 11. Lee started in the business 35 years ago as an apprentice in an umbrella company.
Lee founded his own company in 1984. Taiwanese umbrella manufacturers flourished during the 1980s and 1990s, with their total exports reaching a peak of US$300 million in 1987, Lee recalled. He said there were about 200 umbrella companies operating in Taiwan back then. "The gross profit of producing an umbrella at that time was around 30 percent," Lee said.
The boom did not last, however. Due to rising real-estate and labor costs, many labor-intensive Taiwanese industries, including umbrella manufacturing, began to move abroad in the mid-1980s, with most of them going to China. Lee said that he also relocated his umbrella factory there in 1988. Taiwanese companies now had about a 40-percent share of the global umbrella market, while it had risen as high as 70 to 80 percent in the 1980s and 1990s, he said. "During that peak period, people said, 'Taiwanese umbrellas cover the whole world,'" Lisa Chen, Yamaiji's general manager, explained July 11.
In the first three years after relocating his factory, Lee did original equipment manufacturing, mainly for Japanese companies. Then he found that a price war had broken out among Taiwanese firms. Competitors from Hong Kong and China led to further downward pressure on prices, shrinking profit margins.
In response to the changing market, Lee decided to upgrade Yamaiji's research-and-development facilities, focus on value-added products and choose clients with brand images. The first product created under this strategy was a lace parasol, which was considered fashionable in the 1990s, Lee said.
"You should find your position in the market first, then you can decide who your customers are," Lee stated. Referring to the improvement in the company's products, Yamaiji's R&D department would search for the most fashionable materials in the market and collect relevant information, Lee stressed. "Then we will decide how to use those materials to make samples that would fulfill clients' specific demands," he said. After samples were completed, Lee visited potential customers and solicited orders.
Starting from 2001, Lee began to expand his clientele to first-class brands in Europe and Japan. At first, it was difficult to get orders from those companies. "They had high standards of quality control," Lee said. "One famous company turned down Yamaiji's samples more than 20 times before giving approval."
"We had to fly to Europe and the United States more than 30 times over a period of three to five years," Lee noted. "Thanks to our earlier experience with Japanese clients, who are famous for their strict quality control, Yamaiji could later satisfy its Western clients," he said. All the effort was worthwhile if his company could finally get orders, Lee stated. Now Yamaiji made umbrellas for more than 200 clients, including brands such as Celine, Burberry and Yves Saint Laurent, Lee said.
"To win the trust of customers, we had to apply for certification on our products first. For example, one of our ultraviolet-protective umbrellas was sent to a radiation laboratory to be certified and our factory also received certification from the International Organization for Standardization," Chen explained.
"Now we are doing R&D on new materials, such as fireproof and anti-electromagnetic fabric, as well as carbon fiber and fiberglass-reinforced plastic for umbrella frames, " Lee said.
"Our company introduced aluminum as a rib material to replace steel and it was a revolutionary idea 14 years ago," Chen claimed. This led to a trend of lightweight umbrellas, he explained.
Due to aluminum's fragility, Yamaiji had to replace it with fiber-reinforced plastic, which was lightweight and rust-resistant, two features that other frame materials lacked, Chen said.
Taiwan had considerable R&D ability and intellectual property, since its manufacturers owned several patents on fabric, frames and features, Lee said. "When you hold copyrights in the industry, you cannot be knocked out of the market, even when competition is extremely fierce," Lee noted. "That is Taiwan's advantage."
While Yamaiji concentrated its resources on developing better umbrella frames and applying new materials, Enson has been focusing on creating original features, Lee pointed out. In doing so, the two companies found their niches in the market.
If a company only did OEM for foreign clients, it would earn small profits, Mao noted. In order to have lasting success, a company should promote its own brands, she said.
In the United States, the listed price of a general umbrella was between US$18 and US$30, the Chinese-language Money Weekly quoted Philip Wu, an Enson sales manager, as saying June 14. "In order to differentiate our products from low-priced ones, you should test many materials and designs before you find your niche," Wu stated.
"Enson currently has patents on over 50 innovations and all were developed by T.Z. Wu, the president of our company and a veteran in this business for more than 30 years," Mao claimed.
"For example, the first one-button automatic open-and-close umbrella in the world was invented by Wu around 20 years ago when he was working for another company. Enson still holds the biggest share of the global market on those umbrellas," she said.
Another notable Enson product is "Starry Light," which has light-emitting diode lights on the tip of an umbrella, Mao stated. That design drew the attention of Walt Disney Co., which asked to cooperate with Enson in 2001, she said.
For the second generation of the series, Enson moved the lights to the handles. "Since the lights now are at the lower part of the umbrella, it would help people to see keyholes or watches more easily on rainy days when they get into cars or houses," Mao said.
Totes was interested in the new product and asked Wu to modify the design slightly to make it more user-friendly. Totes launched this umbrella in October 2006. Till the end of the year, there had been one million umbrellas made by Enson for Totes, Mao claimed. The average U.S. sales of a single item in a year was about 400,000 to 500,000.
"Enson's strategy is to be the sales agent for Totes' products in Taiwan, South Korea and Japan. We have 14 sales points at department stores around the island. Now our trade volume as a distributor is just 10 percent of our total trade volume, and we wish it would increase to at least 30 percent in the future," Mao explained.
Write to Edwin Hsiao at edwinhsiao@mail.gio.gov.tw