Wu Changjiang at a new NVC Lighting shop in Britain. Provided to China Daily

Quality should be the cutting edge for Chinese companies in overseas markets, says top lighting industry official

Negative preconceptions about the quality of Chinese products are mistaken and it is high time that China's manufacturing prowess is duly acknowledged in global markets, says the top executive at China's biggest lighting firm.

NVC Lighting Holding Ltd will spearhead the mission to remove the misconceptions about Chinese products in global markets and leverage its success in Britain to expand into other markets, says Wu Changjiang, founder and chief executive.

"We want our brand to be identified with high quality of service, products and manufacturing expertise," says the 49-year-old entrepreneur.

"From our small beginnings, we have already set ourselves the goal of building a respected enterprise at the top of the industry."

Wu points out that in Europe, many people associate "Made in China" products with poor quality. He says it needs a long time to change the misconceptions. Recent years, counterfeits, food and pharmaceutical industry scandals, including melamine-tainted milk, have dealt a blow to the reputation of Chinese products.

But NVC, which is both an original equipment manufacturer and has its own-brand products, is hoping that its name will become as respected as other big European manufacturers such as German lighting company Osram or the Netherlands-based Philips.

"Through our products, we want to change the preconceptions about Chinese products and Chinese," Wu says, adding that NVC is looking to move from "Made in China" to "Created in China".

He says NVC has been focused on innovation, research and development, protection of intellectual property rights and brand building.

Citing an example, Wu says that the coming three years will be a period of rapid growth for the company's LED (light-emitting diode) products division, especially products that help conserve energy. He says the shift from traditional bulbs to lower-priced energy-saving products will prove beneficial in the long run.

NVC realized revenue of more than 1 billion yuan ($160.4 million; 117 million euros) in 2013 from LED product sales. "By 2015, we expect LED products to account for 50 percent of our total sales," he says.

Wu says that the NVC brand has been the fastest-growing area of business for its UK company, currently four times the size of its OEM business.

Last year, NVC signed a deal with the International Swimming Federation to sponsor the Diving World Series from 2014 to 2017. The company was also the official lighting supplier for the 2008 Beijing Olympics and the 2010 Guangzhou Asian Games.

"We have developed quickly in recent years and our brand is now well known and respected globally. We plan to work with the swimming federation to promote our long-term goals," Wu says.

According to industry experts, deals like the diving sponsorship will help NVC reinforce its brand image and also lend it quality assurance in global markets.

The Chinese company currently employs more than 10,000 people globally. The company is also expanding rapidly in Europe, Asia, Africa and Latin America. It has a subsidiary in the UK, and distributors in more than 40 countries.

"Our development in the UK has proved that we can compete with well-known British and European brands," Wu says.

Since entered the British market in 2007, NVC has competed head-to-head with Britain's 86-year-old Thorn Lighting and 36-year-old Dextra Lighting, and shipped products to about 1,500 of the more than 3,500 electrical wholesalers in the UK.

Alongside the sales growth, the British subsidiary of NVC now employs more than 100 people, 15 times the number seven years ago. It has also provided a fillip to Birmingham, an old industrial city, as 95 percent of NVC's British employees live in the city. The company anticipates that that it will have at least 250 people on its payroll and annual turnover of 50 million pounds ($84.1 million; 61.4 million euros) by 2015.

During a visit to the NVC headquarters in Chongqing last year, Birmingham Mayor William Bell had indicated NVC's rapid development in the UK showcased China's development speed.

NVC UK's local presence has been a key factor in its success, says Paul Mans, managing director of CP Electronics, a British company that supplies sensors to NVC UK.

"The biggest issue with importing products from China is not knowing if potential problems can be sorted out. Since NVC has a large office in the UK with employees who have the technical expertise to help customers, it reassures people that potential problems can be sorted out," Mans says.

Besides localization, Wu says NVC's company culture and win-win strategy have played an important role in its development.

"Rather than maximizing profits, we have kept our prices competitive, and used the profits to improve product quality," Wu says.

NVC is planning to tap into other global markets soon and the experience in the UK will be more than handy, he says.

"We have gained a lot of experience in the UK, and using this we can expand the business model to France, Germany, Spain and other European countries, along with Brazil, Russia, and Canada.

"The slowing of the Chinese economy has not been the main reason why we are expanding in overseas markets. Rather, the expansion is a part of an overall strategy that has been formulated based on our own requirements."

Wu started NVC in 1998 with an initial capital of 1 million yuan in Huizhou, Guangdong province. Eleven years later the company became China's largest lighting manufacturer, with annual revenue of more than 2 billion yuan and was listed on the Hong Kong Stock Exchange in 2010.

Wu, however, says that Chinese companies need to be careful before doing overseas investment or purchases. "I have a concept of 'double 10', which means that you should be especially careful if you want to invest or buy a company which has more than 10 years of history or more than 1 billion yuan worth of enterprise assets.

"Since these enterprises have developed their own corporate culture, the real challenge is to integrate the enterprise culture with that of the acquiring company. This is more important and difficult than the acquisition itself."

Contrary to the Western-expansion model, Wu believes it is more efficient to send teams to build sales channels when expanding to emerging economies where channels are still developing, such as India and South-East Asia.

Wu has experienced ups and downs in recent years. In 2012, a battle between him and strategy investors spiraled into strikes that finally saw the company shuttering output for some days.

Workers at plants in Huizhou, Guangdong province, and in Wanzhou, Chongqing, demanded the return of Wu, who had resigned as CEO and chairman in May 2012. On the same day, 36 regional distribution centers stopped taking products from NVC.

Some investors had cited weak corporate governance and instances of financial irregularities under Wu, and also charged him with making reckless decisions. Wu's supporters, on the other hand, claimed that his departure was the result of an alliance between international investors and a foreign industrial giant who wanted to take over the company.

"These are the kind of growing pains for any company, both for founders and investors," Wu says.

"The results proved that some of my ideas were good, and gradually I gained support and respect from distributors, suppliers and employees.

"But the other strategy investors often did not understand the rationale behind my decisions. They saw the immediate interests, and did not support my development in the long term."

Learning lessons from experience, Wu says the founders of companies should choose investors who have the same values and goals.

The founders must also emphasize their priorities during development, he says, adding that he thinks that investors can enjoy in dividends, but not in the actual running of the company.

"I like to learn, research and analyze, and I have continually made changes to our business strategy, marketing model, management and so on.

"We cannot walk an ordinary path, or the same path as everyone else, especially if we want to achieve extraordinary results," Wu says.

zhangchunyan@chinadaily.com.cn

(China Daily European Weekly 05/23/2014 page22)