Taiwanese companies are recognized for their original-equipment manufacturing (OEM) cost-down advantages, but they should go into design and move to brand-name manufacturing, a world-renowned French designer said yesterday in Taipei.
Taiwanese OEMs are capable of developing world-class brands to compete with well-known US and European brands in the market, Philippe Starck, chief vision officer of Hong Kong-based designing and marketing consultancy The Key, said at a forum held by the semi-official Taiwan Design Center (
"When I asked various companies how to put my ideas into products they asked me to design, they always tell me to go to Taiwan, because that's where everything is made," he told a packed house of industry representatives and journalists yesterday.
"In this way, I believe Tai-wanese manufacturers are full of potential to bring their quality products to the world with their own names if proper branding and marketing strategies were in place," he said.
Starck, 55, is recognized for his numerous product designs including architecture and interior, furniture, high-tech products, vehicles, clothing, foodstuff, stationary and accessories.
Saying design is key to the success of the company and the product, Starck hopes The Key can help prop up Asian companies from OEM to "OBM" -- own brand management -- rather than remain subcontractors for large Western of Japanese corporations.
"The ground should be owned by people who work on it," he said.
Romain Hatchuel, chief executive officer (CEO) of The Key and former global director of business development for Euro RSCG Worldwide, the world's fifth largest advertising and marketing services group, said OBM is not merely an option, but an irreversible trend.
Citing an analysis by Business Week magazine, Hatchuel said that the world's top 100 consumer goods and retail companies recorded sales of US$3,578 billion in 2002 and profits of US$228 billion, while top 100 OEMs in the Asia- Pacific region that supplied products to the companies reported pnly US$85 billion in sales, with total profits of US$4 billion in the same year.
"The brand is the new asset that enables a company to create a stronger and longer-lasting relationship with the customer, as well as selling its products at a higher price," Hatchuel said.
He cited another example, saying that Samsung Electronics Co, a South Korean electronics maker that was also an OEM several years ago, successfully transformed itself into an OBM and become the world's 25th most-valuable brand in the world.
As Western brands are sagging due to a lack of authenticity and ethics over the past years, Asian brands that represent original technological products have great opportunities to grab Western consumers, Hatchuel said.
To move forward, Gilles Mangin, chief marketing officer of The Key, said the key for OEMs is to boost their own identity and differentiation among end consumers, either to do it themselves, or having experienced consulting agencies to provide a total solution.
Tony Chang (張光民), CEO of the Taiwan Design Center, which was launched on Feb. 17, said many local OEMs are aware of the importance of branding and looked for help from the center.
Since the center has only 60 staff members right now it might not be able to meet the demand.
Chang said he is considering recruiting 20 more design experts, as well as forging alliances with specialist firms such as The Key.
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