Behind the scenes of a Chinese Watch Manufacturer – Interview with Ningle Zhong

I met Ningle Zhong at the HKTDC Watch fair in Hong Kong back in September 2012, while representing a client. Since then a lot of things have happened in life and business for both of us. Ningle Zhong is the founder and manager of the watch manufacturer Shenzhen Babylon Watch Co.Ltd. In this interview we look into how he got started, his views on the industry and what he thinks about the future.

Before you started Shenzhen Babylon Watch Co., Ltd. you were working for a Trading Company in Shenzhen. How come you decided to start your own factory?

When I was working for my previous employer I received a lot of customer complaints regarding quality issues. Each time I was being put into a position where I had to find a solution to these issues, I started thinking if I could make a difference. I spotted the opportunity and decided to give it a try, I started my own business.

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It’s been a lot of hype about suppliers moving inland to provinces in China such as Henan and Sichuan, in order to cut costs. But Guangdong is still the center of Chinese manufacturing. Why do you think so many Chinese manufacturers, you included, choose to stay?

In fact, there are quite a few enterprises that have already made the move. I believe this to be a trend that we’ll see more of in the coming decade. However, for now most small to medium sized enterprises, like mine, prefer to stay on the Chinese east coast. While a move would result in lower labor costs, we would end up paying more for transportation and general operations.

Besides, it’s not all about cutting costs. Guangdong province has a deeply rooted business culture and workers here are in general more experienced and better trained than workers in the inland provinces. At least that’s what it’s like for now. I have experience working for a major Hong Kong based company that had manufacturing operations in Jiangxi province and I could really see a difference.

You’ve been in the industry for years now. Why did you choose to enter the wristwatch manufacturing business instead of any other industry?

It’s simple, I have a true passion for wristwatches as a product. I love to stay in touch with the industry and work on new designs. It’s really exciting.

How do you find your buyers?

We find them at Alibaba.com and the HKDTC Watch Fair in Hong Kong.

A common problem for Chinese manufacturers is that buyers don’t provide them with clear product specifications such as the required materials, dimensions and components (i.e. movement brand and watch case thickness). What can overseas buyers do in order to make it easier for Chinese suppliers to provide them with an accurate quotation?

In the watch industry, there are many components such as the case, the band, and the movement that have an impact on the pricing. The watch case materials are also a major price factor since one can be made in various materials such as stainless steel, titanium alloy, zinc alloy and so on. We’ve had some overseas customers who are not quite familiar with watches, and in these cases I ask them for their target market and target price. Based on this information, I provide them with a recommendation on product specifications.

Many small businesses have a hard time reaching the MOQ requirements set by Chinese suppliers. Do you think it would be possible for your business to reach a larger market if you lowered your MOQ requirements?

Sure, we would win more small orders if we lower our MOQ. However, a lower MOQ means that the product itself becomes more expensive to produce, and the buyer must pay a higher price. I think this is something that can be worked out between the buyer and the supplier.

The year just started and there are plenty of trade fairs ahead. Which trade fairs do you recommend our readers to visit?

I recommend that you visit The Watch and Jeweler Show in Basel, Switzerland, and at the HKTDC Watch Fair in Hong Kong.

Will your company attend any Trade Fairs this year?

In September later this year you’ll find us at the HKTDC Watch fair in Hong Kong. Don’t hesitate to get in touch with us!

China, and Guangdong province in particular, is still dominating in wristwatch manufacturing. However, in the years ahead, you are quite likely to face competition from other Asian and African countries. How do you plan to stay competitive?

I think that product quality is the key for us to stay competitive. We’re still a young company, but we have already established a name for ourselves as a highly reliable manufacturer. Our customers trust us and that’s critical. Some customers used to send Quality Inspectors to inspect the products, but most of them are now confident with us managing the whole Quality Assurance process in house. We’ve managed to do this because we have implemented a Quality Assurance process based on our customers requirements. Therefore the biggest challenge for us is not competition from other Asian or African countries, but rather maintaining the trust of our buyers.