Founded 30 years ago, Xindao has made a name for itself on the haptic advertising market as a supplier of high-quality, functional gifts that stand for more sustainability. CEO, Albert van der Veen, about design as a distinguishing feature, ecological roadmaps, printing competence as a competitive factor and distributors in the digital era.
Mr. van der Veen, “Xindao” is Chinese and can be translated as “new path”. Which new path did the company founders tread when they launched the company in 1986?
Albert van der Veen: The two of them – Sandro van Hellenberg Hubar and Diederik van Styrum – knew each other from their university days, founding Xindao was a step towards becoming self-employed. The founders focused on the import business from the very beginning – at a point in time before the whole world imported goods from the Far East and when China was still a real adventure. At the same time, however, it was already becoming clear back then that China was going to play a significant role as a production country in the future. This is why Xindao firmly reinforced its relations to the Far East at a very early stage compared to other importers: Xindao Hong Kong Ltd. was already founded in 1990, followed by Xindao Shanghai Ltd. in the year 1992. The local presence that we have maintained since then was pioneering for the later development of the company and also still plays a decisive role today.
Why are the subsidiaries in China so important?
Albert van der Veen: We have a close relationship to our production partners, our communications are fast and uncomplicated and we can control projects efficiently. This not only applies for the production, but also for the logistics in China. For example, we offer our trading partners the XD Factory Direct delivery service: By shipping products directly from the Far East to the distributors without detours via our warehouse, they receive the goods much faster. We take care of all of the formalities too. In this way, if they order on time our trading partners can have custom-made designs to meet their requirements produced in our factories – an interesting, uncomplicated alternative to direct imports. Of course, this only works because we coordinate the processes locally. One of our biggest strengths is additionally our close-meshed quality assurance system. Our local control teams already monitor the production process by visiting the factories, the finished products then undergo rigorous compliance checks. We lay down very strict benchmarks in terms of quality, compliance and CSR – standards that many companies on the market are still miles away from reaching. Last, but not least, we founded our design studio in Shanghai in 2006. This is where the exclusive own designs are developed for our brand, XD Design, which was launched in 2008, which are then further developed in collaboration with the manufacturers until they are ready for mass production and launching onto the market. Our designers, who come from all over the world, not only have to be familiar with the specifics of the industry, but also have to understand the production processes and visit the factories regularly, so geographical proximity to the producers is imperative.
Xindao has made a name for itself on the market with its high-quality lifestyle products and own designs. However, the company’s focus was different at the start. How did this reorientation come about?
Albert van der Veen: It all began with folding rulers and tools and for a long time the “Tools” area was the segment we became well-known for. However, from the onset Xindao also imported other product groups and at the start of the century we expanded our lineup quite visibly for everyone on the market. From 2010 onwards we expanded into twelve product categories. In this way, Xindao progressed from being a specialist for tools and outdoor items into an everyday supplier for high-quality gifts – a considerable number of which are not “open” import items and me-too products, but own developments. Against this background, we have a real USP with XD Design. Especially since comparably one can penetrate markets beyond the B2B market fast and simply with own designs.
To what extent are you active on the retail market?
Albert van der Veen: XD Design products are available to end consumers in around 40 countries, among others in department stores. The retail business only makes up a comparably small share of our overall turnover at present, however it doubles every year. The success XD Design enjoys in the retail sector is proof of the attractiveness of the products.
You always accentuate the gift character of your products and underline the difference to “disposable goods”.
Albert van der Veen: This is in line with our corporate philosophy. There are still far too many useless products on the market that the recipients more or less dispose of straight away, because they don’t like them or have no use for them. Such products not only lack sustainability in terms of ecological aspects, but also from an economic point of view, because ultimately marketing budgets are wasted. We make gifts instead of give-aways – durable, functional and beautiful products that are actually used and which the recipient gets enjoyment out of for a long time. Our high quality demands extend right through to the packaging.
What percentage do own designs make up of the entire product range?
Albert van der Veen: Of the 250 to 300 product novelties we present per year, between 20% and 30% are new XD Design products. But quantity is not our priority here: Our aim isn’t to produce more and more, but better and better designer products.
Which product development philosophy do you pursue?
Albert van der Veen: We want our products to be simple and accessible and appeal to a wide spectrum of tastes – after all one doesn’t know who ultimately receives the product. That is why the design is linear and discrete, we also prefer plain materials. The most important thing is that the products are functional and durable, other aspects play a subordinate role. Following this principle, in the scope of our sustainability strategy we try to replace materials with environmentally-friendly alternatives as far as possible. However, we only do this if the new material doesn’t compromise the quality of the product.
Ecological and ethical responsibility are a key part of Xindao’s corporate policy – you always emphasise this. At the beginning of 2014 you published an own sustainability programme called “Vision 2020”. Which targets have you achieved in the meantime?
Albert van der Veen: We are convinced that the economy in general and our industry in particular need a change of system. We can’t carry on the same way as before. In the scope of “Vision 2020”, Xindao has, as an individual company, defined in which areas we see potential for more sustainability and indeed we have actually already put a lot of aims we set ourselves into practice: For example we have considerably reduced our packaging. But it is not about proving something – not all of the objectives from our roadmap have to have been achieved by 2020. The important thing is that all of the employees have awareness for more sustainable processes, because that is the only way changes can be achieved in all areas of the company.
In the form of the brand XD Apparel that was also launched in 2014, you are introducing jackets and bags made of eco-friendly materials onto the market. Is the textile terrain not a daring step for an importer, whose basic products are non-textile?
Albert van der Veen: This step – which is also a new path – was, of course, initially unusual. That is why we didn’t want to offer just any textile line, but a specialised one. We wanted to distinguish ourselves and I think we have succeeded in doing so: XD Apparel is a perfect flagship for “Vision 2020” and offers the probably most sustainable jackets on the haptic advertising market. They are made out of 100% recycled polyester, contain no down and are certified according to the Bluesign standard. The Bluesign seal foresees that no substances that have a damaging effect on the environment are used in the production process, follows very strict guidelines and is considered as a standard for many big outdoor and sports brands. We are probably the only company in the promotional products industry that offers products that carry this seal.
Has XD Apparel been well-accepted?
Albert van der Veen: In the light of the initially enthusiastic reactions, the sales figures are a little disappointing. That might be because there is a story behind XD Apparel, which the trade first of all has to explain. It is not the jacket, but the story that is being sold. This story has its price and our market is still extremely price-driven. Perhaps we were a little ahead of our time.
Xindao is represented with own offices in nine countries. Which are your main markets?
Albert van der Veen: We are a European player and the most important individual markets in Europe are the Benelux countries, France and Germany. An interesting new market is Russia, where we founded an office in Moscow in 2014. The Chinese market, where we have been selling products for around five years, is very interesting and at the same time totally different. Hong Kong is ultimately an important hub for the international trade – from there we sell to exclusive sales partners all over the globe.
The Romanian Xindao subsidiary Printmasters is responsible for individualising the products – how important is the customising factory for your corporate strategy?
Albert van der Veen: It is absolutely decisive for us, not to simply have a strong partner for the customising, but indeed to have our own factory. We have invested strongly in Printmasters and inaugurated a new building at the location in Romania in 2014, which disposes of a cutting-edge machinery park and a warehouse. Suppliers of our magnitude, who don’t offer a high-performance customising service, are not competitive. This is incidentally something that has changed fundamentally over the past 30 years. At the time the company was founded, it was inconceivable that a supplier imprinted products, i.e. got his hands on the logos of the contractor. The risk that direct business would ensue was seen to be too high. One of the many areas, in which the industry has undergone a transformation.
Which developments are you expecting to occur over the coming years?
Albert van der Veen: At the moment strong revolutions are taking place on the distributor front. One example: The shift towards eCommerce. Online channels will continue to become more important and in the course of the digital change the distributors have to decide whether they want to orientate themselves online or continue banking on the traditional marketing, communications and sales channels. We, the suppliers are not affected as much by these revolutions. Of course, we have to keep up-to-date on the technology side, however the sales market remains the same – at least that applies for Xindao: In the B2B sector, we will continue to exclusively focus on the promotional products trade. As far as our sales channels are concerned, we will definitely not be treading new paths.
// Till Barth spoke with Albert van der Veen.