Changing tunes

Taut strings

The global guitar market is one of the most competitive and proving to be a veritable challenge for Chinese companies to make inroads. Unlike pianos and violins, guitars are popular mostly with youngsters and the purchasing patterns are largely governed by personal interest and preferences.

A woman makes a guitar at the Kapok factory, which produced about 1 million guitars last year. [Yang Yang / China Daily]

"It is also this uniqueness that makes guitars the top-selling musical instrument and the one with the most revenues," says He from Kapok Guitar.

He's claims are not without reason considering that the annual global demand for guitars is about 15 million units, with the Americas accounting for more than 65 percent of the demand.

In China, most of the guitar makers are export-oriented OEMs for popular global guitar brands, according to CMIA.

"The high-end segment is dominated by foreign brands and the Chinese companies' share is less than 10 percent," He says.

For Kapok, 80 percent of the 1 million units produced in 2011 were entry-level products sold at prices ranging from 100 yuan to 500 yuan. Only 5 percent of the output was for the high-end market, where prices start from $3,000 (2,260 euros).

He says that in 2013 the company will move production to a new unit in the neighboring city of Heyuan. The new facility is spread over an area of 70,000 sq m with a designed annual production capacity of 2 million units.

"We cannot continue to position ourselves as a third-class company for OEM as the profit margins are shrinking. Our goal is to revitalize the 55-year-old Kapok brand," he says.

"Much of our marketing strategy will focus on economical guitars that offer superior performance. Going forward, we expect products of our own brands to account for more than 60 percent of our output." Currently, OEM still contributes about 70 percent to its business output and only 30 percent are from its own brand.

But He knows that it is not such an easy endeavor. "Building up an international guitar brand is not so easy for China, as it needs decades of dedicated effort," Liang Zemin, president of Jisheng Musical Instruments Manufacturing Ltd in Guangzhou, said at a recent industry conference.

For Kapok, the problem is even more peculiar, considering that the brand is popular in China and some Southeast Asian nations, but relatively unknown in most of the other countries.

To overcome the challenge, the company has decided to go in for region and sector-specific branding and is accordingly targeting the high-end US markets with its "G.great" guitars.

"We will also have a branding strategy and a mascot to emphasize the music culture that will last for many generations."

Kapok Guitar is also investing heavily in traditional Chinese arts and design to further increase the added value and intrinsic designs of its guitars. He says that the most expensive guitars from his company have a selling price of more than 130,000 yuan. Apart from the expensive main materials, the guitars come inlaid with hundreds of pieces of abalone shells patterned on traditional Chinese paintings.

"What we are attempting here is not just an expensive product, but to create a new high-end fashion statement," says He, adding that his ultimate goal is still to reach out to more consumers with economical and high performance guitars.