Tai Ping Carpets: A Local Brand with Human Touch
Local is trendy. Tai Ping Carpets (HKEx stock code: 00146), established in Hong Kong in 1956, is a pure-blood indigenous brand. For sixty years, it has never relied on advertising, but only on word of mouth, to build its reputation. The thing it is the proudest of was a Tai Ping carpet used in the handover ceremony of Hong Kong in 1997, which was later cut into 1,000 small pieces, numbered and gifted to customers as a souvenir.
Stephen Wong, Tai Ping’s managing director for Greater China, who has been with Tai Ping for 17 years, still makes a point of visiting and receiving customers in person every day. “We take every customer inquiry very seriously,” he said. “A novice designer who is sent to claim materials today may one day become a brand’s design director capable of bringing big orders to us.”
A new casino exclusively fitted with Tai Ping carpets will open in September, disclosed Stephen Wong, Managing Director for Greater China, Tai Ping.
Tai Ping even has the endorsement of Hollywood star Brad Pitt, with 40-50% of five-star hotels in Hong Kong being its customers, including The Peninsula Hotels, Four Seasons Hotels, W Hotels and The Ritz-Carlton. It began accepting invitations for bid for carpet projects for airports in 1997. “Airports have very demanding requirements for carpets, including compliance with the British standards for fire-retardant fabrics, and colour fastness and durability requirements.”
Turn small orders to big deals
He once stayed on an airport project site for 48 hours straight, supervising the laying of 40,000 feet of carpets in the departure and arrival halls. “I once surprised a hotel customer as well as my colleagues by appearing on the ballroom project site at midnight as supervisor,” said Wong. “You have to impress your customers so that next time they have the same need, they will think of you.”
He said that Tai Ping has expanded its customer base project by project. “A hotel at first may just intend to give a try to our products by using them for a ballroom, or a corner of a restaurant, and if impressed, they will expand the use of our products to more places, such as the guest rooms on two floors. It also happens that a real estate developer that is satisfied with our carpeting work in a real estate project decides to use our carpets in other projects such as private home, private jet and yacht. For example, they may have us design a number of hand-tufted carpets for their Rolls-Royce cars.”
Tai Ping’s Central showroom has designers providing professional information about the exhibits. Hanging on the right wall are historical pictures reflecting Tai Ping in the 1950s and the 1960s. (Photograph by Wai Ying Chan)
To reach wider customers, Tai Ping also offers budget collections such as the “Edition One” collection of wallet-friendly versions of its popular designs in designated sizes. On the other hand, it stations designers in its Central showroom to facilitate communication with premium customers’ design teams. In the recent ten years, Tai Ping has not only expanded its carpet materials to silk, cotton and bamboo, but also had collaborations with fashion and interior designers to keep creating innovative products.
Quadruple turnover to HKD 2 billion, driven by a well-rewarded and engaged workforce
Currently, Tai Ping derives 80% of its turnover from business customers, which fall in two major groups:
1. Commercial customers: hotels, large companies, casinos (see “Analysis”), exhibition centres, and airports. This business focuses on machine-tufted carpets.
2. Retail customers (Artisans): high-end retail spaces, luxury houses, homes, private jets and yachts. This business requires custom design of special patterns. “These projects often last three to four years.”
When Stephen Wong joined it in 2000, Tai Ping only had a turnover of HKD 400 million. However, since 2003 when James Kaplan became Tai Ping’s Chief Executive Officer, the company’s turnover has quadrupled to HKD 2 billion, recording a CAGR of up to 49% over the last ten years. Many veteran employees including Stephen Wong have been promoted to senior management positions. “At Tai Ping, we put people first. It is people who make our products, and it is our top-quality products that have made Tai Ping what it is today.” According to him, he was to attend a banquet in honour of veteran employees the very following day after our interview. The Aberdeen seafood banquet would be attended by 100 Tai Ping employees with combined years of service at the company exceeding 2,000 years. “Tai Ping’s management cares for every employee. Taking myself as an example, I was diagnosed with a serious disease in 2009. And one day I was given a dinner by a director, who told me that my conscientious performance at work over the previous nine years was much appreciated and that if anything untoward should happen to me, the company will make sure that my family will be taken good care of. I was truly much moved and very grateful.” In his present role, his goal is to grow the market pie, especially by expanding in the Chinese mainland market, and increase the company’s market share in Asia from the current 38% to 50%.
Analysis
Orders keep coming from casinos
High-end carpets are very endurable. A customer who bought a Tai Ping carpet thirty years ago is still using it. If every customer is like this, wouldn’t it make Tai Ping’s business very difficult? “Artisan carpets are indeed works of art worthy of collection, but we keep receiving orders from casinos.”
In 2003 when the SARS virus broke out, “Some hotels explicitly asked us not to visit them.” The period saw our turnover in Hong Kong nose-dive by half, but luckily we secured an order from a foreign-funded casino in Macau. Today we have 90% of the foreign casino market of Macau. The crisis proved to be an opportunity for us.
The carpets used in casinos tend to have louder colours and more eye-catching patterns because a casino hall has neither windows, curtains nor clocks, where guests are isolated from the outside world and the carpets serve to maintain their positive mood. “As the carpet features prominently in interior, other fittings like lightings need to be in tune and change with it,” said Stephen Wong. The overall carpet business has its peak and lean seasons, but the casino carpet business is always buoyant. In a bid to attract and retain customers, casinos change their carpets every once in a while, thus keeping bringing new orders to Tai Ping. From 2007 to 2008 when mainland visitors to Macau decreased due to visa issues, the casinos shifted their focus to the Philippines. Tai Ping’s order structure serves as something of a barometer of the casino market, which is currently looking to Jeju Island, South Korea.
Tai Ping even has exhibits on display at The Monnaie de Paris. In the picture is a work, by the name of “Antolie”, designed in cooperation with designer Patrick Norguet.