Clocks

Seventy percent of the world's clock output comes from China, where 1,000 suppliers exported US$450 million of product in 2003.

In this report, you'll learn how different manufacturers are trying to keep prices stable despite increasing raw material costs, and which are being successful.

You'll get profiles of 75 key producers in mainland China and Taiwan, many of which supply to leading buyers such as Wal-Mart, Kmart, Target, JC Penney and IKEA.

Plus you'll receive a comprehensive industry overview highlighting new trends, product and pricing forecasts, and areas of sourcing opportunity in the years ahead.

What you'll get

Deep profiles of 20 major clock manufacturers with an in-depth look at their production facilities, export capacities and future plans. These profiles are based on personal factory visits and interviews with senior managers

Short profiles of an additional 55 suppliers with key facts such as manufacturing capacities, technologies used, export ratios and key export markets

A product gallery of 190 best-selling clocks from China, with detailed product specifications and full-color pictures

The results of Global Sources' most recent Supplier Survey giving insights into future pricing, production, sales and R&D trends

This report covers: analog wall/table clocks, alarm/multifunction analog wall/table clocks, novelty/decorative wall/table clocks, floor clocks, alarm/multifunction digital wall/table clocks, novelty digital table clocks

How you'll benefit

Learn how the use of recycled plastic in clock and movement casings is affecting product cost and quality from China

Find out which companies are moving to digital clock production, and which are focusing on decorative wall, table and floor clocks

Discover how in-house manufacturing of movements and modules will affect the price and quality of clocks over the coming 12 months

Identify the innovative new functions top China manufacturers are adding to analog and digital clocks

Executive summary

Seventy percent of global clock supply is produced in China, where 1,000 small-to-large suppliers make a full range of analog and digital clocks. The United States imported more than one-third of China's total output of US$450 million in 2003.

Production is based almost entirely in Guangdong province, and consists mainly of low-end premiums models. Basic quartz analog wall and table clocks currently lead output with a 37 percent share, with multifunction digital models second at 21 percent. Next year, expect multifunction digital clocks and novelty decorative quartz analog clocks to grow to prominence as makers consider these two categories have the best export growth potential. The market is already saturated with low-cost quartz analog clocks, which go for as little as 20 cents in Fujian province. In addition, the cost of producing an analog clock has increased to levels where clock manufacturers either have to cut profit margins or raise product prices.

Steps toward producing more multifunction digital clocks are already being taken. An increasing number of makers have either shifted or started production of digital clocks, a category where more value (in terms of function and design) can be added at the same cost as for a basic quartz analog model.

One of China's largest clock manufacturers, Fuzhou Reida, built a new factory early this year which will be used exclusively for digital clock production.

The majority of companies that produce digital clocks make the modules — which account for 60 percent of the product's cost — in-house using outsourced components.

More companies are making movements in-house as well. Eight of the 20 companies we visited for this report now make the movements they use for their clocks, and one has plans to do so by next year.

OEM and ODM orders comprise 45 to 90 percent of China's clock output. Suppliers in this report produce clocks for Wal-Mart, Target, Metro, Kmart, Jusco, Daiso and IKEA. Some are also licensed manufacturers for Citizen, Seiko, Snoopy and Disney.

Despite the focus on OEM, many makers have developed their own brands which they are actively promoting in international markets. Clocks that carry suppliers' own brand names make up 15 to 35 percent of exports, on average. In some companies, 90 percent of clock exports carry the supplier's own brand name.

For this report, we have classified clocks into six major categories: basic analog wall and table clocks, analog alarm and multifunction wall and table clocks, analog novelty and decorative wall and table clocks, floor clocks, digital alarm and multifunction wall and table clocks, and digital novelty table clocks. The products and prices section on page 8 has price guidelines for each of the six categories.

To produce this report, Global Sources teams toured the factories of 20 companies in the mainland and spoke with top-level executives who discussed their 2004 performance and provided forecasts for 2005.

Industry overview

China's 1,000 clock suppliers are gradually shifting from being mere assemblers to becoming actual manufacturers that produce the majority of parts and components, including movements, in-house.

Any one of these small-to-large companies can export clocks, but only about 150 have direct export rights. Some makers register companies in Hong Kong to handle the overseas sales, but the majority export through local traders. Total output from these makers accounts for 70 percent of global clock supply.

At the top end, individual suppliers' output can go as high as millions per month. Five of the 75 companies featured in this report produce between 1 million and 3.5 million clocks monthly. The average, however, is 150,000 pieces.

China exported US$450.3 million worth of clocks in 2003. The United States is the single biggest importer, with shipments averaging at US$11.2 million a month, representing a one third share of China's total exports. The European Union is a close second with 28 percent.

Export value for the first four months of 2004 grew 9.2 percent from US$130.3 million to US$142.3 million. However, this does not necessarily mean makers are delivering higher value products. Many companies have raised their prices 5 to 10 percent over the past six months in response to rising raw-material costs. After the initial hikes, most companies in this report plan to keep current prices at the same level for the next 12 months, opting to absorb possible cost increases to remain viable in an increasingly competitive market. But about 26 percent of the suppliers surveyed in this report will raise prices by up to 10 percent in the next 12 months, especially if the cost of plastic continues to increase. Many makers are now bringing production of components in-house in an attempt to reduce production costs.

A handful of state-owned clock makers remains in China, and these companies continue to manufacture all parts and components in-house. Privately owned and foreign-invested companies, which make up the bulk of the industry, have typically outsourced all parts and components from ancillary suppliers and simply assemble the clocks in their factories.

As assemblers, these companies do not have to invest a lot in technology, labor and machinery. Factory and staff sizes are small, and some companies need just one production line for assembling the clocks. These assemblers do have to invest in QC and testing equipment as the quality of their clocks relies heavily on the quality of the parts and components that they source.

But the continued rise in the cost of raw materials such as metal and plastic has raised prices of parts and components as well. The cost of plastic increased 50 percent in 2003, and has risen a further 10 percent since the start of 2004. Further price increases can be expected as the price of crude oil continues to climb.

Many of these assemblers are investing in technology and purchasing new and additional machinery to offset possible cost increases in the coming months. Initial investment needed to manufacture all parts and components in-house is high — at the very least, makers have to purchase new equipment, hire skilled workers and expand production facilities. But vertical integration is seen as cost effective in the long run because companies will be able to produce components more cheaply. In addition, in-house manufacture will cut lead times, reduce minimum order requirements and allow suppliers to respond to buyer requirements faster.

The move to in-house production is not industry-wide. A shortage of skilled workers is slowing the transition, and many companies simply do not have the technical capability to produce components such as movements and modules in-house.

Samples of supplier profile

Chang Chin Lin Co. Ltd
Chang Chin is a Taiwan-invested company offering midrange and high-end quartz analog clocks. The export-oriented company ships 100 percent of output to Europe, Japan, Southeast Asia and the United States. OEM orders account for 60 percent of business, with Wal-Mart and Target as its major customers.

Its pool of 12 R&D members can release 10 new clock designs quarterly and to date, the 19-year old company has a collection of 350 models. Chang Chin apportions 10 percent of its US$5- million annual export sales of clocks to R&D expenditure, focusing on improving functions, surface treatments and cosmetic designs.

To guarantee the quality of its products, 80 percent of Chang Chin's movements are imported from UTS (Germany), Young Town Enterprises (Taiwan) and Seiko (Japan). UTS movements are used for the company's high-end and radio-controlled clocks, which sell for as much as US$40 each.

The company consistently participates in the Hong Kong Gifts & Premium Fair, Asia Expo (London) and Ambiente (Frankfurt).

Products
Basic analog wall and table clocks comprise 70 percent of Chang Chin's clock output. Of that percentage, about half is radio-controlled. Other clocks offered are multifunction analog wall and table clocks (20 percent), novelty/ decorative analog wall and table clocks (5 percent) and multifunction digital clocks (5 percent).

Wall clocks are the company's bestsellers. One of these is the CC- 925BW three-in-one analog clock that also works as a thermometer and a hygrometer.

Chang Chin's midrange analog clocks are priced US$3 to US$30, and metal clocks go for US$40 to US$50 each. Only galvanized steel is used for metal clocks, despite costing 30 percent higher than untreated metal.

Clock movements are outsourced from professional makers, both local and overseas. Huayi (Longhai) Clocks & Watches Co. Ltd, China's biggest clock movement manufacturer based in Fujian, supplies 20 percent of Chang Chin's movements. Chang Chin also uses US$6-movements from UTS for its high-end metal clocks that sell for US$30 to US$40. Young Town and Seiko are its other suppliers.

ABS, PS, HIPS and PP are imported from Taiwan. The company only uses new plastic for its clock cases and plastic parts, as recycled plastics result in uneven surfaces, cannot be electroplated and are available only in dark colors. New plastics are bought for US$1,200 to US$1,400 per ton; recycled plastics cost US$480 per ton.

Manufacturing
Chang Chin has six production buildings at its 30,000-square-meter facility in Shenzhen. The company provides a safe and conducive workplace, where employees can listen to relaxing music while working at the assembly workshop.

Sample of product gallery

Basic analog wall clocks Centre Clock Product type: Analog wall clock Model: CM300A-8A Price: US$6.50 Description: Narrow shiny metal frame with 60 indexes; metal hour and minute hands; traditional design

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