Drive it home

Chinese golf brand Sagar offers novices an opportunity to try the rising sport

Cost shouldn't be a handicap for those who want to play golf. A popular choice among newcomers to the sport in China is Sagar, an affordable, domestic brand.

"Currently, most of our customers are beginners. They don't want to spend (too) much money on equipment, as they know they will change their setup in a short time compared with old hands," says Huang Yunjiang, CEO of Chuncui.cn, an online golf gear retailer as well as the manufacturer of the Sagar brand.

A set of golf clubs, produced by domestic brand Sagar, is more affordable than foreign brands. Provided to China Daily

A set of Sagar golf clubs costs 4,980 yuan ($782, 588 euros). The average price for a set of foreign golf clubs is about 15,000 yuan.

The price for a set of clubs from overseas is 30 percent higher in China than in Europe and in the United States because of the high tariffs, since they are labeled as luxury goods.

"Because the Chinese market accounts for a small part for multinational brands, they don't attach importance to the after-sale services. As a result, it leaves some space to create a high-quality and lower price brand," Huang says.

The 32-year-old entrepreneur worked as an advertising planner for a computer company in Beijing's Zhongguancun high-tech district for more than 10 years. When he started golfing seven years ago, he found foreign brands had major reach and major power in China's golf gear industry.

Huang is using his branding and marketing experience to create a well-known Chinese golf equipment brand. He has found that although some manufacturers can make high-quality products, they don't know how to establish a brand in a competitive market. He says he hopes Sagar will become a principal player among golf gear giants. He also owns the brand Wodge, which targets students and lower income players.

Although foreign brands are occupying the lion's share of the market right now, they are more expensive and lack after-sale service, according to Huang.

And with golf being reinstated for the 2016 Olympics, the rapidly growing economy and people's increasing interest in the sport, the golf gear industry has surged over the past couple of decades.

"It is replaying the circumstances of the Chinese computer market 10-20 years ago. I thought it is the right time to create a Chinese golf gear brand, just like the chance for the birth of Lenovo in the computer industry," Huang says.

Zhang Jianfu, 48, a salesman at an alarm company, began to play golf more than a year ago.

"I was using a Callaway club at the beginning. However, when I tried Sagar at a golf course last year, I found it simple and easy for me to use. I decided to buy a club on the spot, which cost about 650 yuan."

Zhang is preparing to buy a driver, and he is paying more attention to the function rather than the brand. If he likes the clubs and feels comfortable using them, he will consider buying more gear from Sagar.

Huang adds that some of his customers are more practical about their purchases. They focus on the brands' performance, not just keeping up with the Joneses and picking a trendy, foreign brand.

The company went through a tough time in its early days.

Huang opened Chuncui.cn in 2004 when China barely had a golf gear industry. The Sagar brand was launched in April 2010 after two years of preparation. But those two years were very trying.

"Although more than 90 percent of the global golf gear is produced in Chinese factories, no one knew the procedure of design and research. We imitated the shape of clubs and heads of Callaway initially. Our golf clubs and heads are produced by the same manufacture of Callaway in Dongguan, Guangdong province," Huang says.

The factory refused to work with the company at first. Compared with the output of more than 10,000 sets of clubs per month for foreign brands, local factories thought little of a new Chinese brand and did not believe in its financial ability.

"I stayed there for several months. I went to the factory frequently to convince them. I told them that we wouldn't bargain and how much we paid attention to the quality," Huang says.

Now, the Sagar's Red Star series is its most popular product, selling more than 1,000 sets in the past 18 months, Huang says.

Besides buying Sagar products on Chuncui.cn, customers can buy them from 15 stores around the country.

Although Chuncui.cn invested 5 million yuan for Sagar and its revenue is just about 5 million yuan, Huang is quite confident with the brand. "Our online store is providing cash flow to the branding unit and our agency business of foreign brands are also generating revenue, so we can continue to invest in our own brands," Huang says.

Huang expects Sagar to turn a profit next year.

If all goes as planned, Huang wants to open 10 to 15 stores at golf courses in the next year. The investment for each store is expected to be between 2 million and 3 million yuan.

"Our customers can test our golf clubs on the green before buying. The practical experience will be more attractive than in a space-limited store," Huang says.

Also in the works, increasing the present 60 after-sales services stations to 100, covering most affluent cities in China next year.

When it comes to its go-global strategy, Huang says his company will work with LightInTheBox.com, a China-based global online retailer, to test the European and US markets.

"We are not in urgent need of making a profit in the global market in the first two to three years. We hope to give foreign customers some impression of our brand, and they can give us some feedback for improving of products," Huang says.

Even though the West has a long history of playing golf, the first golf course in China didn't open until 1984. Today it is a favorite pastime for the country's wealthy. "People are playing golf not only for exercise, but an increasing number of players are also using it as an effective way of business communication," Huang says.

To keep in close contact with his customers, Huang established a 17-member golf team in Beijing. They gather on occasion to learn more about the sport, socialize, and more importantly, play golf. More customers are showing a strong desire to take part in the team, so he plans to expand the team across the country, another way to establish a relationship with his clients.

At the same time, he will stick to the multiple brand strategy to satisfy different needs.

"A children's golf gear brand will be launched in 2012," Huang says.