Hong Kong


	The Japan Times WORLD EYE REPORTS HONG KONG

©THE JAPAN TIMES	Wednesday, June 26, 2002

Local Vision for a Global Giant

Toshiba's Hong Kong subsidiary envisions a greater role for itself as China's WTO-enhanced opportunities open up a new world of possibilities.

Established in Japan in 1875, Toshiba is a world leader in advanced electronic and electrical products - with 315 major subsidiaries and affiliates around the globe. Ever-shortening product cycles and high customer expectation have made the Toshiba name renowned for delivering excellent technology and products on a global scale.

In Hong Kong Toshiba has two main subsidiaries with very different responsibilities. Toshiba Electronics Asia directs the semi-conductor business within Hong Kong and parts of Mainland China.

Hisao Ishiyama, president and managing director of Toshiba Hong Kong

Toshiba Hong Kong, on the other hand, is in charge of all products under the consumer durable goods label, divided into audio-visual products, multimedia products, presentation equipment and household appliances. Approximately 50 percent of its turnover comes from the Hong Kong and Macau markets, while the rest comes from the Chinese Mainland market.

Led by its dynamic president and managing director Hisao Ishiyama, Toshiba Hong Kong has often been chosen as the launching pad for its company's products, as this China gateway is one of the biggest and most advanced markets within Asia-Pacific.

Regarding the strategy for Toshiba in the SAR, Ishiyama says: "We have the leading market share in terms of quantity for color TV's in Hong Kong. Our strategy has been to have relatively few yet large accounts, as opposed to many small accounts, making it easier for us to control everything. We have about 80 to 90 accounts within Hong Kong - chain stores, department stores, and some small independent dealers. Our strength lies in 'shop-in-shop' marketing, where good displays and presentation of our products are crucial."

Although Toshiba Hong Kong has been enjoying its market success, the pressing issue of the moment has to do with manufacturing. Many of the Japanese consumer electronic giants have already moved the majority of their manufacturing facilities to the mainland to keep their products cost efficient. To-date, although Toshiba does manufacture some products and outsources some of its production to EMS companies in China, the manufacturing of major items still takes place in Japan.

Ishiyama's personal vision is "to see the day when all our products are manufactured in China - and the role of the Hong Kong office can evolve," he comments. "As of now, we just buy from other Toshiba factories and distribute the products in the Hong Kong and mainland markets. In the future, if all manufacturing were to take place in China, then Toshiba Hong Kong could take charge of distributing these products to Toshiba subsidiaries worldwide."

Although Ishiyama has only been at the Hong Kong office for 10 months, he has worked within the Toshiba Corporation for over 29 years, and his strong commitment to the future of Toshiba shows. "Although China is a very big competitor for Japanese manufacturers," he adds, "at the same time we have to cooperate with them in order to increase our price competitiveness within the industry. Many others are already doing this and have working business relationships with manufacturers in China. We have to continue to do this as well."

Moreover, China's economy is opening up so that it is no longer just a base for manufacturing; but also a huge market for companies like Toshiba. With this in mind, Ishiyama's goal is to establish Toshiba's own sales and marketing company within mainland China as well.

The World Trade Organization, which China has just joined, rules that it will take three years before investors can establish a 100 percent foreign-owned company in China. While Ishiyama may have to wait a few years, his visions for Toshiba Hong Kong are set to become reality.

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