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Goodway Electrical onto a Good Thing
Only LW Choi may know with any certainty what emotions were surging through his veins when he first decided to switch the production of his 20-year-old business from radios to irons. That was more than 20 years ago, after then Hong Kong Governor Sir MacLehose urged businesses to diversify their production lines.
Taking his statement to heart, Mr Choi started producing mini travel irons, and in 1982 found an importer in the United Kingdom. Orders soon started to flow in, and before long, what started out as a side-venture producing mini travel irons grew into a multi-million dollar, global business.
"This is the first model that we produced," a beaming Mr Choi says holding up a foldable iron, "and it still sells very well. All told, I guess we now produce about 10 million various models of irons every year under the Goodway brand, as well as a few million more under famous European and U.S. brands."
As founder and Managing Director of Goodway Electrical Company Limited, Mr Choi now employs over 2,500 people, and produces around 80 electrical household appliances -- everything from barbecue grills to vacuum cleaners.
"Then I founded Goodway in 1982, there was little competition in the market, but over the past 20 years, competition has become increasingly intense from both local and foreign companies," he says. "I think maintaining high quality has been an important factor in Goodway's success, because it has helped us become a household name and stay ahead the competition."
In the Mainland, where Mr Choi moved his production facilities to from Hong Kong in 1986, the Goodway brand enjoys great popularity. He didn't start promoting the brand in Hong Kong until 1994, backed by huge advertising budgets and even larger investments in product research and development work.
Orders for original equipment manufacturing (OEM) from well-known U.S. and European brands still keep his production lines humming, especially orders for Goodway's two core products, steam irons and kettles, but Mr Choi, who turns 66 this year, believes the future of the business lies in branding.
Goodway was recently named as one of the top ten Hong Kong brands, a proud achievement which he puts down to quality and design. Despite the success that the branding strategy has achieved, Mr Choi calls brand building "quite an adventurous game."
"To build a strong, motivating and distinctive brand, we have had to do long-term advertising campaigns, ensure excellent product quality and after-sales service," he says. "At the same time, we have had to constantly be innovative in product design and manufacturing know-how, as well as keep costs down."
If done properly, branding creates unique and differentiating qualities for products or services, as well as builds up the loyalty and trust of customers, he added. "The process of continuously adding value to our brand is just like investing for the future, because the returns will be far larger than we can imagine today."
"Gaining market share by discounting prices can sometimes do more harm than good to a business," says Mr Choi. Businesses should attach great importance to promoting and protecting their brands, and should focus on winning new customers by rolling out creative products.
Every year, the company spends millions of dollars on developing new products. Over 40 professionals in his R&D department, which also includes some European professionals in France to help create new designs, roll out between 20 and 30 new designs annually. He feels such a high number of new designs is important to attract new customers, who often consider not just how appliances will work in their home, but also how they will look.
Hong Kong is a good test bed for new products and designs. Products that sell well here are often further developed for overseas markets.
"Cordless appliances are now very popular in Hong Kong. People like the convenience and freedom that they offer," he says. "We've just developed a cordless iron, which is proving to be very popular."
And what is Goodway's most popular line of appliances?
"Irons. Definitely irons," Mr Choi says. "People just seem to love our irons."
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