Suppliers of massagers in China are focusing on factory upgrades to raise efficiency and quality. To minimize spending, however, enhancement efforts revolve mainly around existing equipment rather than the procurement of new apparatus.
This is true even for large enterprises. Such operations already run advanced machinery, enabling these makers to carry out more than 90 percent of production in-house. Companies are cooperating with their providers on a range of equipment modifications, including the addition of fully sealed painting areas for a dust-free environment. The last not only boosts cover quality but saves cleaning time as well.
Taiwan-invested ST Life Co. Ltd has developed a proprietary electrical locking tool for nailing together small parts of massager heads. This raised the assembly output significantly from 300 pieces for every two workers to 600 per individual.
Such efforts have minimal impact on costs. Outlay is raised by no more than 5 to 10 percent, allowing makers to keep price increases at bay.
Nonetheless, many midsize companies are also investing in automated production as a way of positioning themselves against larger rivals.
CNC machines, for instance, yield high-precision molds that in turn result in massager housings with smooth edges. Automated painting lines ensure color consistency and raise efficiency by at least 40 to 50 percent.
Small makers are also procuring new equipment, although purchases are limited to basic units that will supplement their facilities for plastic injection, welding, cutting and sewing.
Rather than sourcing from Taiwan or South Korea, they prefer domestic versions that cost 20 to 30 percent less.
Companies have no plans of recovering expenses for the new machines immediately, expecting to get a return on their investment in two or three years. Prices will therefore remain stable.
At many factories, enhancements in manufacturing efficiency will lead to a downsizing in the workforce in the next five to 10 years. The reduction, however, will be gradual. Even with their recent move toward automation, companies continue to rely on manual labor.
Amid these changes, about 30 to 40 percent of small makers of massagers in China have no plans of expanding production facilities, preferring instead to subcontract most processes to other factories. Such companies offer low-end designs and have minimal allocation for equipment upgrades.
Other small and midsize operations are adopting a wait-and-see attitude. These suppliers plan to invest in expensive molding and painting machines only if strong orders are sustained over a prolonged period.
|Protecting original designs|
In addition to equipment upgrades, an increasing number of midsize and large suppliers are applying for patents to protect external designs, structures, parts and functions as part of differentiation efforts.
Shanghai Rongtai Fitness Tech. Development Co. Ltd, for instance, has registered its massage mechanism, easy-to-install armrest, back cover design and VFD-equipped remote control.
Large suppliers usually secure more than 100 patents in the major markets, including mainland China, Hong Kong, Taiwan, the US and the EU.
Midsize makers hold 50 patents at most, while small enterprises have fewer than 10.
Although companies are starting to promote in-house brands in certain destinations, China's massagers industry remains OEM-driven. The majority of exports go to Japan, Malaysia, the US, the EU and the Middle East.
There are at least 800 suppliers, most of which are small and 30 percent midsize. The rest are large.
Despite dominating in number, small and midsize makers' current combined monthly output is less than one-third of large companies.
Tier 3 players have annual sales of $3,000 to $3 million. In a month, they produce 2,000 to 3,000 low-end and midrange handheld massagers, massage belts and cushions. Typically, such suppliers do not manufacture massage chairs.
These makers often farm out the painting and molding processes. About $20,000 to $200,000 can be spent on subcontracting the latter.
To cut costs, some small and midsize companies adopt inferior molds that result in low-end models that generate noise and have a shorter life span.
Midsize suppliers make about 5,000 to 10,000 small or handheld massagers every 30 days. On top of that, some produce 200 to 500 massage chairs. Such operations generate $3 million to $10 million monthly.
Large enterprises, meanwhile, yield 2,000 to 8,000 massage chairs and cushions each month. Their yearly revenue can reach $200 million.
These organizations offer midrange and high-end models with CE, RoHS, GS and ETL certification.
Besides having strong manufacturing capability, some Tier 1 makers adopt top-brand components and boast advanced laboratories for QC.
Shanghai Rongtai, for example, has a computer-controlled leather-cutting machine, which makes the process 50 percent faster. About 8,000 massage chairs can be completed in a month.
Further, the manufacturer extends product life span by using mechanisms and bearings from Sigma and NSK, respectively.
While Shanghai Rongtai has a circuit leakage tester, Wenzhou Shengli owns analyzers for noise output.
Xiamen Comfort Science & Technology Group Co. Ltd, on the other hand, has dedicated factories for sponge, metal and mold making. On its own, the supplier can perform about 98 percent of processes.
The maker also has product life span, EMC, seating impact, swivel cycle and construction testers.
Materials are outsourced, and only the packaging process is subcontracted.
Like their large counterparts, Taiwan- and Hong Kong-invested midsize suppliers invest significantly in product development.
Some small enterprises, on the other hand, simply copy the external appearance of new designs from their bigger counterparts.
The main manufacturing centers of massagers in the mainland are Dongguan and Wenzhou in Guangdong and Zhejiang provinces, respectively.
There are about 200 suppliers in Guangdong, most of which are Hong Kong- or Taiwan-invested. They benefit from the hub's abundant support industries.
Massage chairs from Dongguan are generally more reliable than those from other sourcing centers because the city has mainly large suppliers.
Zhejiang has 250 to 300 makers that offer primarily low-end and midrange models. The key hub for massage chairs and cushions, Wenzhou is home to several large suppliers. This includes Wenzhou Shengli, which ships high-end massage chairs abroad.
In addition, Fujian province's Xiamen city is an emerging production hub about 20 mostly large companies. They cater to the midrange and high-end markets. Top-tier OEM clients include Panasonic, Sanyo and Fuji of Japan, and Malaysia's Ogawa.
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