The Kings army

Once, not so long ago, mention of China’s role in the global pro audio industry conjured up images of Western manufacturers moving their production to Guangzhou in an attempt to bring down costs. With factories stood ready and labour to spare, the country quickly became the OEM heartland of the audio business, while the same companies who felt the benefit of its resources looked on at its own domestic brands and shrugged their shoulders. Then, suddenly, a single acquisition changed forever the way in which the industry viewed Chinese ambition – Soundking Group purchased Cadac.

For members of the European and US audio community, it was a stunning turn of events. Cadac was one of the UK’s oldest and most revered mixing desk manufacturers, as British as the BBC. While its well documented financial troubles had seen the company struggle for survival, its rescue by a Chinese manufacturer still sent industry insiders quietly reeling. The perception of Soundking’s homeland as an OEM haven was quickly replaced by a new mantra: China is coming.

Of course none of this took into account Soundking’s own 22 year history, encompassing the establishment of its own successful brand covering almost every link in the audio signal chain. The company has long been an exhibitor at major trade shows such as NAMM and Pro Light & Sound, while its manufacturing base in Ningbo – located approximately two hours outside of Shanghai – is among the best equipped in the world, including a 120-sq-m anechoic chamber. The company’s rise to prominence in the global industry has perhaps been far less sudden than many Western commentators assumed following the Cadac deal, and the subsequent purchase of fellow British brands Studiomaster and Carlsbro.

Indeed, arriving at the Ningbo complex is an impressive experience to say the least. Within these grounds, thousands of members of the Soundking family are offered homes in a dedicated apartment block, entertainment in a purpose built $4million arena (which doubles as a testing area for sound reinforcement systems), meals in an enormous food court, shopping and banking facilities and even a Buddhist temple.

Adorning the walls are the philosophies by which the company seeks to trade, the most important of which is ‘tomorrow’s glory, today’s effort’. Elsewhere, a backlit display advertises three goals towards which every employee is expected to work: to make Soundking like ‘an army that has strict and important discipline’; to think of Soundking like a school ‘where all the workers can learn’; and to consider the company as if it were every employee’s family.

Yet as dramatic as much of this may seem, it is all offset by the polite and friendly humility with which the company’s president and founder Xianggui Wang presents himself. Sitting in a pleasant but modest office, he admits via an interpreter that he is ignoring a back injury in order to meet Pro Audio Asia. Yet no matter how much he is suffering, his passion and enthusiasm for the company never wavers.

‘The company really is a family,’ he explains. ‘We encourage its members to think of this as their home.’ Just as important, however, is the concept of Soundking as an army. Mr Wang is quick to explain that the company’s workers are ‘developed to be like soldiers in a war’.

Moreover, just like any army has a campaign strategy, so Soundking long ago settled on a plan to establish itself as more than just an OEM manufacturer. With resource on his side, Mr Wang looked at the international industry and quickly realised that a Chinese brand alone was not enough to meet his ambition.

‘Around 10 years ago we came up with a plan to purchase international brands,’ the president reveals. ‘As a company, we depend on technological innovation but we also need to have good brands. Soundking is a name that we’ve had for more than 10 years but it’s still very limited in the international market, so we needed to purchase some internationally famous names.’

He adds: ‘The strategy adds new technology to our products – these companies have already been developing products for 40 years. And it promotes our international ranking. These famous companies also have customers who come from the middle or high-end, and we want to attract them to us.’

The strategy is working. The third floor of the building that houses Mr Wang’s office is devoted to an exhibition of the company’s achievements and product developments so far. Waiting within are every conceivable type of loudspeaker, dozens of mixing desks, and even a stage set up with every component having been exclusively manufactured within the Ningbo facility.

‘We have multiple products and we can meet many different kinds of customer requirement,’ Mr Wang explains. ‘That means we can generate a lot of custom, especially in Europe and the US. At first our customers thought we were just a trading company but after meeting us they soon realised that we are actually a supermarket of all kinds of pro audio products.’ It’s a traditional Chinese manufacturing philosophy applied in a new way – the infrastructure is so well developed that Soundking’s new acquisitions have benefitted from economies of scale, dramatically reducing their overheads.

Elsewhere, an enormous map of the world plots each global location in which the company now has a sales presence, covering every continent, while Mr Wang himself is pictured with world-leading politicians. An entire wall is devoted to the company’s work within the Shanghai World Expo, most notably within the China Pavilion. Touring all of these exhibits, Mr Wang displays an energy and pride that is characteristic of the company he founded. He points the way, bounding ahead, his back injury dismissed. If Soundking is an army then he is every inch its General, leading by example. And like any good General, he plans to take his army much further still.

‘In five to 10 years our company’s technology will be established as leading the industry in the world,’ he declares, when asked about his ongoing plans. He continues: ‘We will develop our company’s skill-set to around three to five times where it is now, and we want to produce a satellite network of sales companies in all areas of the world.’

That ambition equals more takeovers, and Mr Wang is quick to point out that opportunities in the market are likely to be seized upon. ‘We are prepared for the future,’ he asserts. ‘If we do purchase anything then we’re interested in a high-ranking loudspeaker brand, and cinema sound. If the economic climate is strong enough and we want to acquire a brand then we will consider it.’ He adds that networking technology is also of interest.

Much of China’s domestic manufacturing base is still founded on OEM contracts, but just as the country itself is becoming ever more powerful, so its industry is assuming a new confidence. Mr Wang is part of a new generation of Chinese businessmen who possess the financial means and the experience to assert themselves and their companies on the global stage. While Western manufacturers repeat the new mantra that China is coming, the truth is that Soundking is already here.

www.soundking.com

Box-out:

Rescued and revived: The British brands that Soundking has made its own

When Mr Wang speaks of the UK heritage brands that Soundking has acquired since 2009, it is striking that he refers to them not as assets held by his company, but as respected entities that should be protected and ultimately grown. ‘We will respect the traditional history of these great brands and their success,’ he stresses. ‘We will cooperate with them and develop them in the future to make them the leading companies in this industry.’

As such, the ongoing development and marketing of Cadac, Studiomaster and Carlsbro forms a major plank of the strategy for the growth of Soundking itself, as it strives to assemble a world leading portfolio. The strategy exploits Soundking’s considerable manufacturing resources in Ningbo, providing economies of scale and cost advantages that few manufacturers can beat.

Crucially, it also expands Soundking’s resources beyond China itself. Product design and R&D, some key manufacturing, operational management and worldwide marketing remain based in the UK at the respective Cadac and Studiomaster/Carlsbro headquarters. Under the umbrella of Soundking Group, all three brands are pursuing distinct growth, sales and distribution strategies.

Cadac

The Asian market has traditionally been strong for Cadac, with high demand for its top-end live and theatre sound consoles throughout China, Japan, Korea, and beyond.

The principal strategy for growth of the brand within the Soundking Group is to expand the product portfolio – vertically and horizontally – across new market sectors, maintaining and exploiting the Cadac build and performance premium. Developing an extended product range across a wider range of price points, with products like the Live1 series consoles and beyond, Cadac is actively expanding its distribution network in Asia.

The company’s traditional foundations remain intact however, with R&D handled by UK engineering teams and production based in the UK. Meanwhile, Soundking is keen to assist in expanding the production process, and is currently undertaking intensive product training and manufacturing process improvement programmes in order to enhance the cost effectiveness of production without compromising on quality or reliability.

Studiomaster

The Studiomaster brand has a long established heritage, particularly in PA and sound reinforcement – a reputation that Soundking intends to maintain, while targeting growth in international MI and low-end pro audio markets.

To that end, Studiomaster has established distribution in several key Asian markets including South Korea, The Philippines, Malaysia and Thailand; while it is currently negotiating for distribution in Vietnam, Singapore and Australia. According to Soundking Group, the brand is ‘actively looking at all markets in the pacific rim and beyond’.

Shipment of the mixing consoles is direct from Ningbo, while all communication and planning for the brand is handled from the UK HQ, a strategy intended to achieve competitive pricing across the product portfolio. Distribution in China is handled by Soundking directly.

The brand has also expanded its product portfolio, retaining the most established products while adding further lines similar to the existing Soundking brand portfolio but with additional development. Meanwhile, new product lines are currently being designed and developed in the UK, and are expected to be launched early in 2011. The target is the mid-range pro audio market, in direct competition with ‘some of the best established worldwide pro audio brands’.

Carlsbro

Having suffered a long demise in its first incarnation, the Carlsbro guitar amplification and PA brand was originally built on delivering well-engineered, reliable equipment into the low to mid-range MI market. Soundking is planning to return it to exactly that position with major investment in R&D and production resources, as well as the cultivation of international distribution channels.

As with Studiomaster, all shipments to Asian distributors will be direct from the Ningbo facility, with sales, distribution and product development managed from the UK. According to Soundking Group, Carlsbro will sit ‘very firmly in the low to mid priced MI sector, with instrument amplification and processing products, and small to medium scale portable PA products’.

Classic Carlsbro products are reportedly also currently being resurrected by the UK design team for mass scale production at Soundking’s facility. A brand relaunch is expected to take place at Frankfurt Prolight & Sound.