Leung Wai Ho, Eddie

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Family and education background. A childhood of material deprivation

Leung Wai Ho’s family background. A native of Shunde, Leung Wai Ho was born in Hong Kong in 1949 to parents who moved to Hong Kong in 1947. His father received primary education in China and worked in the engine room of a Yau Ma Tei Ferry Company boat after coming to the Territory. The ferry company operated a 24-hour shift system with employees working on alternate days. His parents gave birth to three boys and three girls with Leung Wai Ho the third eldest of the six. His mother could not read and stayed at home to take care of the children in the Mong Kok cubicle apartment in which they all lived. In 1953, Leung Wai Ho’s uncle founded Leung Lung Kee and also rented a large room in Mong Kok to which Leung Wai Ho’s family eventually moved.

Educational experience. While Leung Wai Ho attended both primary and junior secondary schools, he was aware that he would never be a great student and dropped out at 14 after competing Form One. He subsequently worked as an apprentice in his uncle’s Leung Lung Kee Watch Case Factory. The standard working hours at that time were from 8:00 am to 9:30 pm. After serving a two to three year apprenticeship, Leung Wai Ho understood the importance of acquiring knowledge. It was around about this time that the 1967 riots began affecting the local market. As there was then less work at night, Leung Wai Ho began attending evening classes at the Hong Kong Technical College (later the Hong Kong Polytechnic). While there, he learned drawing and engineering technology. As Leung Wai Ho knew he had a poor educational foundation, he was determined to make up the difference by self-learning.

Summary of Leung Wai Ho’s childhood. Leung Wai Ho admitted that he was naive when he was young. Always hanging around in the streets after school, his academic results were poor. Later on in life, he continued to be appalled at the material deprivation of times when children could only play with picture card games and bottle caps. Because of this, people of his generation tended to develop a hard working and industrious spirit.




Title Family and education background. A childhood of material deprivation
Date 21/08/2010
Subject Industry
Duration 9m50s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-001
Career in Leung Lung Kee: A review of his early career path, building contacts within the watch m...

A review of Leung Wai Ho’s early career. Leung Wai Ho’s uncle Leung Yat Lung named the watch case factory he founded in 1953 as Leung Lung Kee. It was only the third factory of its kind in post-war Hong Kong. During his early time here, Leung Wai Ho learned machine repair and watch case production processes such as cutting and grinding. The young watchmaker believed that his apprenticeship experience laid a good foundation for his future career and thanked his uncle for giving him such a valuable opportunity. Leung Lung Kee developed its business overseas after the 1967 riots and opened a watch case factory in Singapore in 1969 in a joint venture with a Swiss watch manufacturer. Between 1969 and 1972, Leung Lung Kee assigned some of its staff to this overseas plant. This gave Leung Wai Ho even more opportunities for development especially in terms of building contacts within the market.

Building contacts within the watch market. While he was an apprentice, Leung Wai Ho earned a monthly salary of $0. In order to earn an extra $1, at 9:30 pm every night he got on his bike. He then rode from the factory at No. 60 Tong Mi Road at Tai Kok Tsui and delivered goods to watch fitting workshops in Tsim Sha Tsui and Wan Chai. Leung Wai Ho returned home around 11:30 pm after having night snack. As his father worked in the ferry company, he did not have to pay ferry fares each time he crossed the harbour. Leung Wai Ho used this privilege to become acquainted with watch fitting workshops’ personnel. He then began learning how to improve quality from their complaints about finished products. From 1969 to 1972, Leung Wai Ho formally established contact with customers by answering their enquiries or referring their problems to the factory for follow-up.

Leung Lung Kee’s customers. In the 1960s, Leung Lung Kee’s buyers included both local and overseas customers. Among the locals were Wah Kiu Watch Case Factory Limited, some big Ningbonese companies and also some Indian companies. US importers W.M.R. Watch Case Corp. and Pilamontrex Inc. were among its main overseas customers at this time. After Leung Wai Ho came into contact with buyers, he began to learn English, relying on teaching from contacts, reading customer documents, sending telegrams and looking up words in dictionaries. During his early days at Leung Lung Kee, Leung Wai Ho learned about production, while in the later stages he learned about marketing and customer service. In 1974, Leung Lung Kee’s manager left the company to start his own business and Leung Wai Ho took his place, becoming Leung Lung Kee’s second in command.

Opportunities resulting from Leung Lung Kee’s expansion. Leung Lung Kee opened in 1953, moving to Tai Kok Tsui in 1956 and then to Kwai Chung in 1974. Between 1969 and 1974, Leung Wai Ho was responsible for operational matters and planed the plant relocation to Kwai Chung together with his uncle. Thereafter, Leung Lung Kee’s business developed continuously from this base in Hong Kong. In the 1950s, the company began to handle US business, with customers coming to Hong Kong once every year to place orders. After Leung Lung Kee relocated its factory, it began to further develop this overseas business. Leung Wai Ho was among the first personnel in the local watch case industry to seek overseas opportunities. He went to Chicago and New York in 1974 for the first time in search of customers and received satisfactory orders. Leung Wai Ho regretted his limited English proficiency at that time. Around 1974 and 1975, mechanical watches began to give way to electronic digital watches. Leung Wai Ho then went to Silicon Valley in California four times in 1975 alone. While there, he sold Leung Lung Kee’s products to Intel who only produced electronic movements and had no desire to move into watch case manufacture. Leung Wai Ho successfully marketed Leung Lung Kee’s watch cases, generating huge profits for Leung Lung Kee between 1975 and 1977.

 




Title Career in Leung Lung Kee: A review of his early career path, building contacts within the watch market, Leung Lung Kee’s customers, opportunities resulting from company’s expansion
Date 21/08/2010
Subject Industry
Duration 18m15s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-002
Founder, plant changes, production processes, apprenticeships and labour relations of Leung Lung ...

Leung Lung Kee founder Leung Yat Lung's background. Leung Yat Lung, proprietor of Leung Lung Kee, received junior secondary education and went to Guangzhou to work in a locomotive factory as an apprentice when just 16. While there, he engaged in mechanical and engineering technical work. Leung Yat Lung later came to Hong Kong from the mainland in 1946 at the age of 20, working as a master at Sun Kee Watch Case Factory. While machines in the locomotive factory were mainly heavy machinery, their operation principles were similar to lighter equipment such as lathes or planers. After working at Sun Kee for four years, Leung Yat Lung established the joint venture Kwok Kwong Watch Case Factory. A year later, in around 1950, he started his own business.

Leung Lung Kee’s plant changes. In the years from 1950 to 1953, Leung Lung Kee relocated its small plant four times. The company’s first facilities were located in Shek Kip Mei’s squatter area. The second factory was based in a shop at the junction of Canton Road and Public Square Street, close to the Yau Ma Tei Police Station. The third site was located in a ground floor shop of an old building near Tin Kwong Road and Kau Pui Lung Road at To Kwa Wan. This plant was primitive and small and measured less than 500 square feet. While it only had space for lathes and drills, it employed around 20 workers. The fourth and final move was to an old building at No. 66 Tong Mi Road in Tai Kok Tsui in 1955. This last building was a mixed use one, with the upper floors housing families while the factory and its 70 to 80 workers occupied the lower two to three floors.

Leung Lung Kee’s production processes and division of labour. Leung Lung Kee mainly produced watch cases. Including the plastic cover and crown, there were about 12 kinds of accessories in a watch case and some 40 processes were needed to complete its manufacture. First of all, a bronze cast mold base had to be ordered from a metalware factory. In those days, technology was poor and the size of the delivered mold base could sometimes be 40% larger than that actually ordered. Such oversized molds needed to be cut and grinded by a milling machine before they could be used. As cutting copper materials required high temperatures, workers’ hands frequently bore many painful looking red burns. Male employees mostly handled lathing, milling and other machines responsible for cutting and polishing, while female staff took charge of assembly and packaging. The Tong Mi Road factory had more than 80 workers, of whom about 55 were male and 25 were female.

Leung Lung Kee’s apprenticeships. Leung Lung Kee’s mold department was equipped with large-scale production machinery. During his early days with the company, Leung Wai Ho initially worked in the machinery department where he learned about all the machines used to produce different types of watch case. The master taught and guided him earnestly and Leung Wai Ho listened diligently, mastering each of the many techniques used in making machines and equipment. Leung Wai Ho stressed that apprentices needed to be attentive, hard working and willing to climb under dirty machine tools to carry out repairs. Apprentices also had to be prepared to work extra hours and had to comply with the master’s every command – even when it came to buying breakfast! In the first two years of his career, Leung Wai Ho mainly learned in the machinery department. In the next two years, he learned watch case production processes such as cutting, grinding and drilling. Leung Lung Kee did not have a formal three-year graduation requirement for apprentices. Younger workers who had mastered all techniques could graduate at almost any time.

From 1964 to 1968, Leung Wai Ho learned all of these necessary production processes. Apprentices in the factory generally learned either machinery or watch case production. Under the wing of his uncle, Leung Wai Ho was able to learn all about several different departments. In the 1950s to the 1960s, workers mostly entered a trade through apprenticeships. In the 1970s, piece-work-based wages that boosted production output became more popular although they were limited to master-level employees only. In the early years, most male workers could complete their apprenticeships and eventually become masters while female workers oversaw non-technical processes such as packaging and assembly. Female apprentices only started to appear in more recent years when Leung Wai Ho set up production facilities in Dongguan.

Labour relations at Leung Lung Kee. While he was the proprietor’s nephew, Leung Wai Ho never used his status to take advantage of his colleagues. As his family was living near the factory, he moved, ate his meals and lodged there between 1964 and 1967. His aim in doing so was to mix with the masters so that he could ask and learn from them at any time. Leung Lung Kee’s masters and apprentices slept on bed planks in the factory each night. In the 1960s, Leung Lung Kee provided its employees with daily lunches and dinners. After Leung Lung Kee began taking US orders, Leung Wai Ho often worked overnight with the masters and female workers in order to meet shipment delivery schedules. In the early 1960s, the Labour Department stepped up inspections of unauthorised overtime work and legislated that younger and female workers could not work after 11:00 pm. When the Labour Department’s inspections were frequent, Leung Lung Kee would allow female workers to take packaging work home. Leung Lung Kee’s staff received overtime pay for their overnight shifts and its kitchen also served them chicken congee while they worked. Leung Wai Ho felt that in those days both employer and employees were of one mind and one heart and that later labour relation never again achieved such closeness.

Leung Wai Ho’s career at Leung Lung Kee. Leung Wai Ho believed that his uncle intended to share the running of the business with him. He did not really understand his uncle’s expectations when he joined Leung Lung Kee and disappointed the older man when he later started his own business. That said, Leung Wai Ho was very hard working in his uncle’s watch case factory. Unafraid to accept extra shifts, he often put in overtime, receiving guidance and appreciation from everyone in the factory. Leung Wai Ho was keen to learn by observing and grasped every opportunity to do so. For example, he tried to understand the operation of various departments in the process of transporting goods. Between 1969 and 1971, Leung Lung Kee ran a branch factory in Singapore. At the same time, the company suffered from manpower shortages in the Hong Kong factory. Leung Wai Ho was able to assume part of the management burden during this time and went outside to meet customers and provide quotations. He received recognition from everyone in the factory and also began to better appreciate his uncle's expectations.

 




Title Founder, plant changes, production processes, apprenticeships and labour relations of Leung Lung Kee. Leung Wai Ho’s career at Leung Lung Kee
Date 28/08/2010
Subject Industry
Duration 32m
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-003
The origins and setting up of Dailywin. Early development of Dailywin: resolving its capital prob...

The origins and setting up of Dailywin. Leung Wai Ho thanked his uncle for giving him the opportunity to develop and learn about overseas marketing. When Leung Wai Ho later got married and had his own family to support, he was not content with his remuneration at Leung Lung Kee. Cheered by his customers’ encouragement, he conceived the idea of starting his own business and founded Dailywin in 1978. When he opened his first factory, Leung Wai Ho’s savings only numbered a few tens of thousands of dollars. He borrowed a further $200,000 from friends as capital and rented a 5,000-square foot half-floor plant from Join-In Shirt on Kwai Ting Road in Kwai Chung. He later admitted that the start up was a bold attempt. In the early days, Leung Wai Ho hired relatives as workers. As Dailywin’s customers were willing to pay quickly for their orders and suppliers generously allowed credit payments, business got off to a smooth start.

How Dailywin resolved its early capital problems. Half a year after Dailywin opened its factory, funding problems arose and the company constantly needed to borrow to meet its business expansion needs. Leung Wai Ho went to Panama in early 1980 asking a customer there to lend him US$50,000 repayable within one year in return for a 5% discount on orders. He finally succeeded in obtaining the funds needed to ride out these early difficulties. In those years, profits were high enough for Leung Wai Ho to make the necessary repayments. For the next year or two, Dailywin borrowed small sums from banks. When these bank loans proved insufficient, Leung Wai Ho would borrow from moneylenders via short-term loans. Leung Wai Ho emphasised his integrity and never owed wages to employees or ran up outstanding accounts with suppliers. By always fulfilling his promises, he succeeded in establishing a sound reputation that helped him sail through choppy seas during times of future difficulties.

Dailywin’s 1980s move to complete watch production. Between 1981 and 1982, Dailywin’s business volume constantly increased. Leung Wai Ho worked 12 hours a day in the 1960s and often worked from 8:00 am to 9:00 pm after starting his company. During the day, he looked after the factory operation. At night, he liaised with North American customers via telex. Dailywin initially produced the cases which dictated each watch’s appearance. This work had a high profit margin and most of the company’s customers were in North America. In 1983, a US customer commissioned Leung Wai Ho to assemble complete watches with movements provided by the customer himself. As a result, Dailywin’s business model began moving towards one-stop production. In the late 1970s, Dailywin co-operated with top US watch manufacturer Timex and began producing specialty cases for Timex. The company also looked for other manufacturers, acting as intermediary for referring orders to local watch factories such as Nam Keen and Rainbow. In 1983, Leung Wai Ho eventually bought shares in both of these companies despite their being much larger than Dailywin. The three parties then set up an electroplating factory in 1984 so as to better control quality. The fact that the electroplating factory was located immediately above Dailywin’s plant saved a lot of processing costs.

Relocation of production lines to Dongguan in the late 1980s. In the mid-1980s, there was a shortage of industrial factories and workers in Hong Kong. As a result, Dailywin had to move its operations to China in order to expand. In 1987, Nam Keen, in which Leung Wai Ho was a shareholder, moved to Dongguan. The following year, Dailywin also set up a factory there. By 1992, Dailywin had closed all production lines in Hong Kong, retaining only its design and sales operations here. In 2001, both of these departments were also relocated to the company’s Dongguan HQ. Subsequently, the company had just one office and 10 or so staff in the Territory. As a result, Dailywin had transited from being a "Made in Hong Kong" to a "Made by Hong Kong” manufacturer. Leung Wai Ho deeply believed that customers had confidence in, and would pay higher prices for products made by locally-overseen factories as such products had better quality.

 




Title The origins and setting up of Dailywin. Early development of Dailywin: resolving its capital problems, moving to complete watch production, relocation of production lines to Dongguan in the late 1980s
Date 21/08/2010
Subject Industry
Duration 21m49s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-004
Reasons, costs and effects of setting up a factory in China

Why Dailywin relocated to Dongguan. The 1980s were probably the peak period for Hong Kong industries. Towards the end of the decade, there was a shortage of both local factories and workers. Rapidly increasing labour costs further added to the Territory’s lack of competitiveness. Reforms and the opening up of China meant Hong Kong manufacturers were keen to start investing on the mainland. Local companies had been gradually moving northward in the mid-1980s, mainly concentrating their operations in places like Shenzhen and Dongguan. As many factory managers originally came from the mainland before settling in Hong Kong, most preferred to set up factories in or near their hometowns. As Leung Wai Ho was born in Hong Kong, this was not an issue.

During a study tour to Shenzhen in 1988, Leung Wai Ho and his friends found that many places in and around the area were barren and would need to be self-developed. Leung Wai Ho originally paid the deposit to secure a site in Shenzhen’s Longgang District, finally giving up after he worked out that the cost of continued development would be too high. He later chose a roadside lot in Dongguan, as it would be easier to develop and was near Hong Kong. Local policies in Dongguan also facilitated the setting up of manufacturing facilities and charges there were more reasonable than in Shenzhen. The Longgang District eventually developed satisfactorily and Leung Wai Ho later regretted that he had given up the idea of setting up a factory there.

The cost of setting up a factory in China. Most local governments in China lacked financial resources to build manufacturing plants. As a result, Hong Kong operations relocating to China mostly set up factories in rented land, paying fees to the local government to obtain usage rights for 40 years. At the same time, relocating manufacturers had to generate their own electricity. Fortunately, as there were generally adequate local fuel supplies, the charges for doing so were not unreasonable. Dailywin’s Dongguan factory cost RMB80 per square metre to rent. Leung Wai Ho obtained the necessary RMB by taking advantage of reasonable HK$ exchange rates. As a result, the actual rent per square metre was more like HK$40. Construction costs were about RMB80 per square metre and other expenses included decoration, fixtures, equipment and utility installation costs. The years between 1985 and 1996 were the peak period of Hong Kong industries’ northward relocation. This is especially true of the period 1992 to 1996. The majority of the relocating manufacturers adopted the PSM production mode once operational in China.

Improving production efficiency. Hong Kong manufacturers who relocated their production lines to China found their mainland premises were generally four times larger than in Hong Kong. The size of their labour forces also expanded. Rises in production capacity, output and product re-export volume were other increases resulting from the northward move. By 2000, some products were exported directly from Shenzhen. Between the 1990s and today, product quality and quantity have both improved in leaps and bounds.




Title Reasons, costs and effects of setting up a factory in China
Date 18/09/2010
Subject Industry
Duration 14m
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-005
Dailywin’s steps of setting up factory in the Mainland: general trend of downstream factories mo...

Factories of every size and type start moving north. The post-1992 northward relocation of large companies in various fields also included downstream industries such as watch and garment accessories manufacturers. As they lacked financial resources and required smaller facilities, accessories manufacturers tended not to build their own plants. Some Hong Kong merchants built standard factory plants on leased space in industrial parks. Typically, each 700-square metre block was four-storey high, and each floor could be leased to four small factories. From 1992 to 1996, most production relocations to China involved such smaller downstream companies.

Difficulties and opportunities in relocating operations to China. Hong Kong enterprises’ mainland factories lacked water and power supplies during these early days. Communications equipment was also backwards compared to Hong Kong. Dailywin’s Dongguan plant did not even have a telephone line to begin with, forcing Leung Wai Ho to visit the township government office to use the telephone there. He subsequently paid a then very considerable $30,000 to get a telephone line. By 1992/93, Leung Wai Ho secured a mobile phone line for $10,000. Hong Kong manufacturers had to be very flexible in solving problems and took time to adapt to doing business in China. Such companies eventually became so used to the new culture, they even began expanding to areas such as the Yangtze River Delta and Northwest China. The previous decade or so had seen China undergo a period of rapid economic development. As a result, many Hong Kong manufacturers began to explore domestic sales on the mainland. By setting up manufacturing facilities in China, Hong Kong companies were provided with the sufficient labour force and land areas they needed for plant expansion.

In the late 1980s, the Governor of Hong Kong was an eager promoter of ISO Quality Management. After relocating to China, many companies’ plants increased in size and quality management was improved. Setting up manufacturing facilities in China was entirely Dailywin’s internal decision and the company’s overseas buyers had no input. In those years, Dailywin co-operated with Japan's Casio, with the Japanese company providing production equipment for Dailywin’s processing. At the beginning of this relationship, Dailywin’s Hong Kong plant was small and handling orders was difficult. After opening its factory in China, Dailywin’s plant became larger and production problems were easier to resolve. In 1992, Leung Wai Ho established a foreign-invested enterprise in Dongguan, setting up a dust-free workshop for watch assembly, measurably reducing defective and substandard products as a result.

Employees at the mainland plant. Dailywin’s Dongguan plant hired Hong Kong managers to take charge during its initial start up and hired general workers in China. During its peak period, the factory had 25 staff members from Hong Kong stationed in the mainland where they managed and trained up local personnel. Today, just four staff members from Hong Kong are stationed in China. At first, mainland workers were mostly junior high school graduates. So much so that Dailywin once asked a middle school in Qingyuan to select its best graduates to work in its local factory. As Dailywin’s plant had better facilities, workers coming from the countryside were generally very satisfied with its boarding arrangements. Leung Wai Ho was quite lenient about academic requirements for mainland technical staff. In recent years, positions such as production processes and material management were filled by mainland university graduates. From 1993 onwards, Dailywin set up annual scholarships at the Dongguan University of Technology to attract students to join it after graduation. At present, six awardees are employed and hold senior positions in this way.

Dailywin’s reduced reliance on its Hong Kong plant after relocation. In 1992/93, almost the whole of Dailywin’s plant was relocated to China, with only the design and marketing departments remaining in Hong Kong. As inconvenient communications between the two places often lead to information errors, Dailywin subsequently relocated the two remaining departments to China in 1997. Ultimately, only the accounting and shipping departments and just 12 staff were left in Hong Kong. The Dongguan factory officially became operational by the end of 1989 and Hong Kong plant’s watch case department was the first area to move northward.

After the first phase relocation was running smoothly, Leung Wai Ho believed China’s domestic market outlook was good and started expanding his mainland manufacturing operations again in 1992. Hong Kong plant’s watch fitting department was subsequently moved to China in 1993. In 1989, Dailywin Hong Kong laid off about 200 workers, while the Dongguan plant hired 350 staff. In 1993, the local plant made a further 150 workers redundant, while it added an additional 300-350 workers on the mainland. Happily, Hong Kong plant’s severance program ran smoothly. At its 1996 to 1997 peak, Dailywin Dongguan employed around 1,600 to 1,700 workers. Together with a retail workforce of 1,600 across the country, this meant the Dailywin Group employed roughly 3,200 people.

How PSM and foreign-invested operations compared against each other. Enterprises adopting the PSM mode were eligible for concessions on import tax subsidies. As a result, Dailywin retained the PSM mode in China specialising in OEM export business after relocating the entire Hong Kong plant to the mainland. After vigorously developing the domestic market in 1992/93, Dailywin focused on producing goods as a foreign-invested enterprise. All raw materials Dailywin imported under this arrangement were taxed by customs before being imported for production. China’s government did not encourage PSM operation much as the importing of large quantities of raw materials and exporting of large numbers of products were not standardised. Hong Kong manufacturers developing domestic sales were required to apply for a Domestic Sales Permit from the China Horologe Association (CHA). In those years, successful applications were extremely rare, and Dailywin could only apply for a maximum annual quota of 20,000 items.




Title Dailywin’s steps of setting up factory in the Mainland: general trend of downstream factories moving north, difficulties and opportunities in relocating operations to China, employees in mainland plant, shrinking of Hong Kong plant, comparsion of PSM and foreign-invested operations
Date 18/09/2010
Subject Industry
Duration 29m29s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-006
Engaging in sales business in North America and Mainland China

Leung Wai Ho’s failure to make a mark with North American watch buyers. With the issue of the UK’s 1997 handover of Hong Kong to China still to be resolved, 1983 was a year of political instability for the Territory. Leung Wai Ho’s family emigrated to Montreal in Canada in 1984. As Montreal was close to New York, it was a convenient base from which to contact Dailywin’s US customers. The fact that the city was located in Canada’s French-speaking zone also helped Leung Wai Ho’s children learn French. Leung Wai Ho bought the SAGA brand in Canada and given it a Chinese name. From 1986, he focused on promoting the brand’s sales in Canada. As he could not oversee the business on the spot and North America’s vast population and landmass made advertising and marketing very expensive, the venture eventually came to an end. Leung Wai Ho retained his faith that Hong Kong was the ideal place for developing a retail business. Learning from his failure in North America, Dailywin began expanding its retail operations in mainland China with effect from 1992 onwards.

Developing China retailing on a consignment basis. In 1992, Leung Wai Ho accompanied a party from the Hong Kong Trade Development Council to the mainland to promote retailing. While there, he secured sales space in Guangzhou’s Nan Fang Building which had roughly the same status as Hong Kong’s Shui Hing and Sincere department stores. Leung Wai Ho subsequently rented a shop in Guangzhou’s Shangxiajiu Road, opening a flagship store to promote SAGA watches. Having many years of production and sales experience, believing there was a huge potential market in China, and serving as Vice President of the CHA, Leung Wai Ho had every confidence he would be successful in applying for his sales quotas. As a result, he worked hard to promote his mainland retailing activities.

Dailywin’s 1995 listing on the London stock market. Dailywin spent a full year trying to raise funds to develop its domestic sales in China and listed itself on the London Stock Exchange in 1995. It subsequently used all funds raised to expand the Dongguan factory operation. In those days, the UK market had a lower listing threshold, while the Hong Kong Stock Exchange did not welcome small companies capable of earning less than $50,000,000 within three years.

Dailywin began mainland retailing. Dailywin’s China domestic sales team began by focusing on consignments to shopping malls with all selling conducted through wholesalers. As Leung Wai Ho was not familiar with the mainland market and lacked experience in retailing, wholesalers often took the goods and defaulted on payment. This cost him considerably in terms of both goods and money. Between 1994 and the end of 1996, Leung Wai Ho lost a total of $50,000,000 in this way. After this failure, Dailywin was listed in Hong Kong in 1997 to raise funds for a comeback. From 1997 onwards, Leung Wai Ho directly managed the company’s mainland retail stores, using a “shop-in-shop” mode to open 25 shops in big cities across China. Leung Wai Ho was well aware that as a manufacturer he lacked retailing experience, and therefore hired full-time sales managers to run the shops. One of the managers he employed had previously worked in Giordano. Leung Wai Ho rented spaces of 20 to 40 square metres in each large shopping mall. He also co-operated with foreign brands such as Timex, Casio, Disney, Elle and Esprit to market lifestyle watch brands. Labelled Time Zones, these retail corners collected and analysed sales information on a daily basis. Leung Wai Ho admitted that the Guangzhou flagship store was not suitable for selling brand watches and that he had chosen the wrong location.




Title Engaging in sales business in North America and Mainland China
Date 21/08/2010
Subject Industry
Duration 19m52s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-007
Quitting the retail market. Difficulties of building successful own brands

Leung Wai Ho quit the China retail market. Leung Wai Ho claimed that his attempt to enter retailing was a “money burning” business that had cost him around $200 million between 1997 and 2003. Sadly, profits earned from overseas’ businesses were insufficient for him to “burn money” in China at such rates. In 2003, Dailywin’s retail stores in China hit a peak of 450, with goods on display having a total value of over $90 million and some 2,000 staff running shop operations and warehousing. Not knowing when returns would materialise and lacking the financial muscle to sustain heavy losses for much longer, Leung Wai Ho finally sold the retail business in 2003. The buyer was a large locally listed watch manufacturer called Peacemark.

The difficulty of building successful own brands. Leung Wai Ho bought into the idea of creating Dailywin’s own brand, agreeing that retail profits were much higher than manufacturing equivalents. However, only producers who lived within their financial means could hope to succeed in such a market. At this time, Leung Wai Ho is no longer willing to take risks as he grew content with earning smaller profits. He continued to believe that brand building is a long-term enterprise involving huge investment capital and with returns only likely to come some 50-60 years later. As success required some understanding of retailing, a novice’s chances of success are ultimately not high. Leung Wai Ho cited Baleno and Jeanswest as enterprises which had successfully developed retail arms. In recent years, Dailywin sold its retail business to Peacemark. Apart from keeping the SAGA brand, the company’s remaining brands’ license and staff were all transferred in this move.




Title Quitting the retail market. Difficulties of building successful own brands
Date 21/08/2010
Subject Industry
Duration 12m18s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-008
A review of watch industry in Hong Kong: rise and decline of electronics watches, relationships b...

The rise of electronic watches in the mid-1970s. The advent of electronic timepiece marked a major revolution in the watch industry. Electronic watches became popular in the US in the mid-1970s, and were subsequently evolved into electronic quartz analog timepieces. While most watches were equipped with“three keys and one crown”, electronic watches needed four push buttons and also had to be water resistant and dial printed. At this time, watch and clock manufacturers in Hong Kong had not yet developed such technologies. As Leung Lung Kee had mastered the electronic watch category quite early, and Leung Wai Ho was also familiar with the purchase price of complete watches, the electronic watch business generated huge profits for Leung Lung Kee. Back then, each electronic watch button could be sold at US$4 (its value today is just $0.5!), while single electronic watch cases could fetch prices of US$14. Watch crown and silk- screen factories were also making sizeable profits. Other local watch case factories did everything possible to follow Leung Lung Kee’s example in developing the electronic market. Between 1974 and 1977, every local manufacturer producing electronic watch cases made a healthy profit. For this reason, 1974 to 1982/83 were peak years for the local watch industry.

The decline of electronic watches in the early 1980s. The Hong Kong watch industry mainly produced Roskopf movement watches in its early years. From the 1970s onwards, such movements began to decline in popularity as electronic digital watches became readily available across the massive US and Japanese markets. The new generation watches were very fashionable and had many functions. Some manufacturers invested in the electronic movement business and switched to electronic toys after making early profits. Many other local electronics manufacturers rushed to produce silicon chips, importing some chips from Japan and then processing them here in Hong Kong.

Electronic watches’ rise and decline were extraordinarily quick. Sadly, the excessive production of electronic movements and watches in the mid-1980s pushed prices down and eventually made production unprofitable. The fact that manufacturers in the Territory did not attach much importance to quality control also meant many locally produced electronic watches were simply not satisfactory to buyers and wearers. With consumers losing their confidence, electronic watches started to fall out of favour. The main beneficiaries of the electronic watch boom were Casio and ODM. Casio specialised in electronic watches made from high quality chips and cables whose quality was assured and so dominated the market between the 1980s and 1990s. In 1981/82, Japan and Switzerland co-operated in launching quartz analog watches. Such timepieces were popular due to their accuracy and subsequently become very hugely successful mainstream buys. While Dailywin had invested in the production of electronic watch cases, Leung Wai Ho later found that sale of electronic watches was not satisfactory. As a result, he adopted what he felt was a safer strategy and began specialising in quartz analog watches.

Relationships between different types of watch manufacturers. There was a clear division of labour in Hong Kong’s watch industry in the early days, with watch case and band manufacturers not producing peripheral products. For example, watch case factories would purchase mold bases for their cases from other suppliers. Complete watch manufacturers on the other hand engaged in total assembly and would buy in watch cases, crowns, bands and glass dials. While cross-process production is common nowadays, Dailywin was rare in that it produced watch bands and engaged in electroplating at the same time. There were several other large and small watch accessories factories within the local watch industry.

Among watch case factories, Leung Lung Kee was considered a large production facility, whereas most others in the trade were small concerns. As manufacturers involved in the same process in the 1970s tended not to contact each other, outsourcing and sub-contracting were not common. That said, late in the decade, Leung Lung Kee did once sub-contract processes such as pitting and grinding. In the early years, Dailywin received orders from many of Leung Lung Kee’s customers. Some were subsequently outsourced to “friendly” factories to produce complete watches. In the late 1970s, many wage-earners set up small processing plants in order to improve their living standards, thus creating outsourcing and sub-contracting operational modes. Many small factories started business in this way.

Dominance of quartz analog watches in the 1980s. After the electronic watch boom of the mid-1980s, quartz analog watches gradually became the mainstream and watch case manufacturers’ development once again stabilised. As sales of electronic timepieces declined, many watch case factories were hit with bad debts. After manufacturers turned their attentions towards quartz watches, their equipment grew more advanced and their business more standardised. Local factories learned much from the management modes and technologies of Casio. While the production of quartz analog watches was similar to that of mechanical timepieces, quartz analog products’ waterproof functions and level of accuracy were far superior.




Title A review of watch industry in Hong Kong: rise and decline of electronics watches, relationships between different types of watch manufacturers, dominance of quartz analog watches
Date 28/08/2010
Subject Industry
Duration 35m38s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-009
Trade associations and exhibitions of Hong Kong watch industry

In the early 1970s, Leung Wai Ho represented Dailywin on several overseas launch promotions, exploring new markets in the US (1974), Switzerland (1981) and India (1985). Hong Kong, China, Taiwan and India all produced complete watches, but only Indian companies sold their watches locally while the US stopped assembling complete watches in around 1985/86. Leung Wai Ho participated in the world's largest watch event, the Basel Fair in Switzerland in April 1981. Here, foreign buyers gathered to exchange and observe the latest trends in not only watches and clocks but also jewellery. As the organiser of the Fair regarded watches made in Hong Kong as being low-end, they did not allow Hong Kong manufacturers to exhibit at Basel. As a result, local manufacturers organised their own exhibition in the hotel next to the fair venue. After reconciliation, they were finally allowed to join as exhibitors. In July 1981, the HKWMA held its first Hong Kong Watch and Clock Fair. HKWMA was initially established by complete watch manufacturers and only later absorbed watch accessories manufacturers such as watch case, band and crown factories and even assembling technicians as members.

In the 1980s, the HKWMA was probably the trade’s key representative body and the government paid serious attention to its input. Established several years before the HKWMA, the Federation of Hong Kong Watch Trades and Industries (“FHKWTI”) was another prominent industry body. The Federation was initially formed by watch wholesalers and retailers (i.e. watch case factories’ customers), but began accepting memberships from watch accessories manufacturers in the 1980s. In those days, around half of the body’s directors came from watch manufacturer background and the other half was wholesaler and retailer. On the other hand, the HKWMA was composed of watch manufacturers and accessory factories. 

The two associations and Hong Kong Trade and Development Council co-organised watch and clock fairs since 1983. A local exhibition was held every September. The event subsequently went on to become the world’s second largest watch and clock event. Overseas customers came to Hong Kong especially to place orders, with some foreign buyers rushing to capitalise on the upcoming Christmas peak sales period. With the watch and clock fairs gaining popularity, trading firms’ intermediary roles vanished and their operation completely ceased in the early 1990s.




Title Trade associations and exhibitions of Hong Kong watch industry
Date 28/08/2010
Subject Industry
Duration 15m55s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-010
Leung Wai Ho’s path towards community involvement: from Hong Kong Young Industrialist Award to D...

Leung Wai Ho’s path towards community involvement. Participating in industry and political groups greatly enhanced Leung Wai Ho’s social awareness and he remained determined to promote the successful development of the Hong Kong watch industry. His receipt of a Hong Kong Young Industrialist Award for 1990 further added to his sense of commitment to the local industry. In 1991, Leung Wai Ho was appointed as a member of Industry Department’s Industry and Technology Development Council. This allowed him the opportunity to learn more about quality management. He later requested that the government help establish the Hong Kong Watch and Clock Technology Centre.
 
In 1992, Sino-US relations were tense with ongoing arguments over MFN. It was around this time that Leung Wai Ho first got to know the President of the US Asia-Pacific Affairs Exchange Center in Washington. He did so during a chance meeting where he was asked to arrange for liaison sessions with Beijing officials. This helped Leung Wai Ho to fight for China’s MFN status with the United States. Between 1992 and 1995, Leung Wai Ho acted in the name  consultant of US Asia-Pacific Affairs Exchange Center in Washington, Vice President of the HKWMA,  and leveraging his status as winner winner of a Hong Kong Young Industrialist Award.  He subsequently accompanied over 200 US Senators on visits to China and in resultant meetings with officials of the country’s central, provincial and municipal governments. Leung Wai Ho felt the US Senators lacked knowledge about China and did his best to redress the balance. For his active liaison efforts, he was eventually granted honourary citizenship of both Shenzhen and Dongguan. His efforts were also recognised by Hong Kong officials, who invited him to the residence of the Secretary for Home Affairs on the Peak for breakfast! As he had started out his career in the watch industry, Leung Wai Ho first participated in watch associations, subsequently going on to advocate the well-being of Hong Kong industries as a whole.

Leung Wai Ho’s involvement in Dongguan City Association of enterprises with foreign investment (DGAEFI). In the late 1990s, Leung Wai Ho began to act as a director of the DGAEFI. The DGAEFI was under the jurisdiction of Dongguan Bureau of Foreign Trade and Economic Co-opertion In the past, only government officials served as DGAEFI President and the body seldom fought for the interests of the watch industry. In 2001/2002, Leung Wai Ho was invited to become the body’s President. He declined the invitation due to busy engagements. Since 2003, Leung Wai Ho has, however, served as DGAEFI President, becoming the first person outside the mainland to hold such post. He gradually transformed the association into one in which foreign enterprises play a leading role.

Leung Wai Ho first resolved to end the confrontation between enterprises and customs by improving mutual transparency. He subsequently helped propose the concepts of "Sunshine Customs" and "integrity, law abidance, facilitating customs clearance". Leung Wai Ho also organised an assessment committee to audit the integrity of various enterprises. His steady work gradually gained recognition by the local customs who began consulting local businesses before proposing new policies. Serving as a bridge, DGAEFI also co-operated with the tax and labour departments in resolving conflicts. DGAEFI’s efforts were recognised by both provincial and municipal departments across the Chinese and Hong Kong governments. The consulates of the United States, Canada, Britain, Japan and Korea based in Guangzhou would also contact the DGAEFI whenever they encountered problems.

Leung Wai Ho’s active participation in various good causes. Leung Wai Ho believed that to act in a personal capacity was an uphill struggle as it usually meant doing things without any backing. Acting under the title of an industry association, however, often made things happen more swiftly. A good example would be applying to the government for establishing the Hong Kong Watch and Clock Technology Centre in the name of HKWMA. Leung Wai Ho thought that the backing of trade bodies from both China and Hong Kong ensured mutual respect in each place. Perhaps because of its comparatively backwards technology, the mainland respected the HKWMA. On the other hand, the local watch industry placed a high value on Leung Wai Ho’s appointment as Vice President of the CHA in 1992. Joining the watch and clock associations in not only China but also Hong Kong and Taiwan, Leung Wai Ho assisted in the forming of the China Horology Federation (“CHF”) In 1998. His efforts successfully unifying the watch industries in all three places were greatly appreciated by mainland officials.

Association participation meant seizing opportunities. Leung Wai Ho believed that involvement in trade associations allowed him to more quickly access information and so streamline the development of his business. For example, Leung Wai Ho became aware that the Guangdong Province would pass minimum wage legislation in March 2010. Apart from providing training and travel benefits, Dailywin’s Dongguan plant increased staff salaries in advance, winning the trust of its employees in the process. While investing in Hebei, Leung Wai Ho acted as Committee Member and Standing Committee Member of the Chinese People’s Political Consultative Conference (“CPPCC”) of Hebei Province. In recent years, he has also served on the National Committee of the CPPCC where his efforts have facilitated public and private matters such as immigration and customs clearance. Leung Wai Ho added that before serving in the CPPCC, one had to first join the China Overseas Friendship Association. This body operates under the Central Government’s United Front Work Department and is responsible for civil liaison activities outside China.




Title Leung Wai Ho’s path towards community involvement: from Hong Kong Young Industrialist Award to Dongguan City Association of enterprises with foreign investment. Background of taking part in community organizations: participation in various good causes and seizing opportunities
Date 18/09/2010
Subject Industry
Duration 35m58s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-011
His Principles of career success: "Doing things that others don’t", "Excelling in things that ot...

"Doing things that others don’t", "Excelling in things that others do" and "Exploring new things at which others excel". Leung Wai Ho continued to stress the importance of integrity and earnestness in doing things to this day. When developing a new product, he had three principles: "Doing things that others don’t", "Excelling in things that others do" and "Exploring new things at which others excel".

"Doing things that others don’t". The first principle is perhaps best illustrated by two examples. In the 1970s, Leung Wai Ho went to the US for product promotion, bypassing local intermediary trading firms and co-operating with a Silicon Valley company to produce electronic watches. Dailywin also constantly developed new watch making materials such as using glass to make watch dial plates in the early 1980s. The advantages of his policy were superior clarity and durability. The company later switched to sapphire which were 20 times more expensive than glass but never wore out. In 2003, Dailywin became the first company in the world to use plastic glass to make watch cases and watch bands. It also made cases from hard-wearing kitchen countertop material Corian. In the 1980s, cowboy chains were used as watch bands.

"Excelling in things that others do". Leung Wai Ho insisted on maintaining integrity with customers and putting quality first. He ultimately believed that the quality and reputation of Hong Kong and foreign-made goods were better than those of mainland equivalents. While quality was related to technology and machinery, Leung Wai Ho required his employees to achieve “zero returns” by being excellent “goalkeepers”.

"Exploring new things at which others excel". Dailywin stopped producing electronic watches and using textureless zinc alloy materials in the 1980s. In 2003, Leung Wai Ho sold Dailywin’s chain of Time Zones retail stores and instead turned to investing in the production of computer software. He paved the way for his move to the electronics industry with a number of Chinese Americans in developing large-scale project management software such as “8th Manage”. That same year, Leung Wai Ho also transferred Dailywin’s listing status to Wai Yuen Tong Medicine Holdings Limited and served as a non-executive director of the new venture. In doing so, he freed up more time for his DGAEFI activities and community affairs and so was able to get better acquainted with mainland officials.




Title His Principles of career success: "Doing things that others don’t", "Excelling in things that others do" and "Exploring new things at which others excel"
Date 21/08/2010
Subject Industry
Duration 23m21s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-012
A lifelong career in watch industry: keen interest and commitment in the watch industry. A summar...

Enterprise succession and continuity. Having been actively involved in the watch industry for over four decades, Leung Wai Ho hoped Dailywin could continue to operate successfully for many, many years. To this end, he actively cultivated his children and staff to take over the running of operations from him. Leung Wai Ho’s wife only assisted at the company’s outset before subsequently becoming a full-time housewife. His three children were initially reluctant to work with Dailywin after returning Hong Kong from overseas studies, only agreeing to join the company after being lobbied by their mother. From the mid-1980s, Leung Wai Ho allotted shares to his management staff, hoping that Dailywin would continue in business for a century or more. Sadly, after the company’s 1995 listing, staff sold their shares to take profit. Leung Wai Ho now hoped that his mainland employees will stay on long-term. Having a very keen interest in the watch industry, Leung Wai Ho has increased expectations of timepieces and continues to explore new product possibilities.

Integrity and diligence were Leung Wai Ho’s keys to success. Leung Wai Ho remains a very industrious and serious individual who still works over 10 hours a day. He was a very demanding employer, requiring his staff to be meticulous in handling small things. In doing so, he also emphasised personal integrity and was not afraid to suffer for helping others. As such, Leung Wai Ho could always rely on his friends to help him ride out storms such as the Asian financial meltdown of 1998-1999. Dailywin undoubtedly encountered its greatest difficulty during this period due to excessive expansion of business and manufacturing plant following its 1995 listing. Fortunately, over 40 suppliers agreed to accept payment on credit (360 days) as they were all old friends with whom Leung Wai Ho had always been honest. He raised funds in 1999 for a comeback, but finally could only sustain his mainland retailing business for a few years before withdrawing. The years 1995, 1996 and 1997 were the peak of Leung Wai Ho’s career, with both his business and political career running very smoothly. During this period, Dailywin was successfully listed in the UK, and had the support from Japan’s Casio and the United States’ Timex. In 1997, the company employed 3,000 staff.

Summing up: The history of the Hong Kong watch industry. Leung Wai Ho believed that developing an OEM business was a solid strategic decision since foreign brands did not engage in manufacturing. As the key to running a successful OEM business was quality assurance, it was very difficult to adopt cheap products to the OEM mode. If overseas customers were satisfied with quality, local manufacturers could gain huge profits for long-term manufacturing arrangements of high-end products , with the ex-factory price of a very expensive watch often reaching $20,000! Leung Wai Ho explained OEM’s advantage by using electronics and mobile phone industry as examples. In doing so, he pointed out that brand creation requires a long-term vision. As a result, manufacturers must first consider such a move very seriously and must have sufficient funds and endurance to hold out until returns materialise. Ultimately, Leung Wai Ho believed it was still far better to develop a business on OEM lines.




Title A lifelong career in watch industry: keen interest and commitment in the watch industry. A summary of Hong Kong watch industry’s past
Date 18/09/2010
Subject Industry
Duration 23m35s
Language Cantonese
Material Type
Collection
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LWH-SEG-013