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Mekim Corners Health Care Market

When William Tsui launched his own business in Hunghom in 1981, his goal was to tap into an under-served market by distributing health products from Europe to a rapidly emerging pharmaceutical and health industry in Hong Kong and Asia.

By appealing to this neglected niche while forming strategic alliances with key players in the pharmaceutical and personal health care business world, Mr Tsui has grown his businesses from a two-man outfit in the first year to over 150 full-time staff today.

"When I founded Mekim in 1981, there wasn't much competition, because a lot of people thought there was no market for importing pharmaceutical raw materials and health care products in Hong Kong and Asia," he says. "The market is a lot more crowded now, but I believe there is still a lot of room for us to grow."

His initial contact with European suppliers of raw pharmaceutical materials soon led manufacturers of finished drugs and health care products to ask Mekim to market and distribute their lines in Hong Kong -- a relationship that continues to this day.

Rapid growth in both finished products and raw materials resulted in the raw pharmaceutical material side of the business being spun off into a separate company. This allowed Mr Tsui to focus on developing the market for finished healthcare products for both professionals and consumers in Hong Kong and Macau.

He managed to win tenders to supply hospitals and clinics, which today account for about 50 percent of the company's sales, as well as shelf space in local supermarkets and drugstores.

However, with new discoveries and products in the medical sector coming onto the market almost daily, keeping track of these developments soon became one of his biggest challenges.

"I define this sector as a kind of knowledge-based business," Mr Tsui says. "When we started, I had to spend most of my time finding out about the market and the situation in terms of products, customers, vendors, legislation, etc, which was a huge challenge. As the business grew, we employed more people to do this, freeing me to focus on driving the company forward."

To manage the flow of information more efficiently, Mekim invested a substantial sum in information technology, which Mr Tsui says has been a critical factor in the company's success.

Branching out

Although he managed to win shelf space in stores for fast-moving personal care products, a lot of the 4,000 products that Mekim represents are too niche to attract the big retailers' interest.

To overcome this obstacle, in the mid 1990s, he decided to open his own retail outlets under the name Meka.  The company now has 13 stores dotted around Kowloon and Mr Tsui says he is thinking about opening a store on Hong Kong Island.

"I cannot say this is a good business, because we treat the shops as our marketing arms. We are not aiming to compete with existing retailers, and we are not looking at high turnover," he says. "What we are looking at is showcasing our product lines to consumers."

To this end, the company also sends a quarterly newsletter on new products and health trends to its database of 40,000 loyal customers.

Besides showcasing products, the shops also allow Mekim to track consumer buying patterns, their preferences and budgets, information from which is then fed back to them through the newsletter.

Healthy growth

When Mekim started out, the health product market was a neglected sector. Higher standards of living and greater awareness of health issues have expanded the market, but it has also attracted more competition. Yet Mr Tsui says this has actually helped the company in some respects, because it pushes the company to work harder and smarter.

"By harder I mean incorporating more products into our range and expanding our retail stores. And smarter as we need to set up some sort of IT system to help us make better business decisions," he says.

With 20-plus years' experience under his belt, Mr Tsui says decisions to expand or diversify into new products and markets have usually been the right ones. But with the operational structure of the business designed for variety and volume, increasing the company's product portfolio and customer base is a continuous exercise.

China provides the answer to expanding a sales base for many companies, but Mr Tsui says he is not aggressively seeking to enter the market at the moment.

"We have to wait for a suitable time before going there, as many things in China are not clear. Yes it is a very big market, but we cannot afford to take such a risk with so many uncertainties at the moment," he says.

"In Hong Kong, we still feel there is a lot of room to play with. Some of our competitors are leaving, because they say Hong Kong is a very tough market. But we are staying and strengthening our foothold, because we are still expanding here."

	Company: Mekim Limited Business: Marketing and distribution of healthcare products and fast moving consumer goods Established: 1981 Year joined HKGCC: 1992 Web site: www.mekim.com