The ability to offer DFM (Design for Manufacturing), flexible
services and manufacturing know-how in a number of
product categories has made VTech CMS a leading contract
manufacturer. It has a dedicated manufacturing facility
offering reduced logistics and customs clearance costs for
customers wishing to distribute their products in China. The
Group’s stringent quality control system and experienced
staff allow it to handle low to medium volumes as well as a
high mix of different products. As in previous years, VTech
CMS received numerous customer service awards during the
financial year 2014.
Gains in Market Share
will continue to be the growth driver for
the Group in the financial year 2015.
VTech continued to be the world’s largest player in ELPs from
infancy to preschool in the calendar year 2013
4
. The pipeline of
new products will enable the Group to strengthen its market
leadership in the core learning area, while pursuing growth in
new areas.
In addition to leadership in ELPs, VTech remained the world’s
number one manufacturer of cordless telephones in the
calendar year 2013
5
. In the calendar year 2014, further market
share gains are expected for TEL products in the US and Asia
Pacific. Market share in Europe and Other Regions will recover,
driven by new product launches and the signing of a major
new distributor for the Middle East.
The Group’s commitment to quality products and services has
enabled CMS to win market share year after year. According to
Manufacturing Market Insider
, VTech CMS ranked among the
world’s top 50 EMS providers in the calendar year 2013. The
Group expects to continue to increase its CMS sales globally in
the financial year 2015.
Geographic Expansion
will see more emphasis on expanding
outside North America and Western Europe, in order to capture
growth opportunities. In Asia Pacific, the potential in China is
huge and it will continue to be the most important market
for development. The developed markets in the region such
4
Source: MarketWise Consumer Insights, LLC and Retail Tracking Service of NPD
Group. Ranking based on 2012 and 2013 total estimated annual retail sales in the
combined toy categories of infant electronic learning and preschool electronic
learning
5
Source: MZA Ltd, 2014
as Australia and Japan will continue to be a focus. The Group
will also extend its reach to other markets including Taiwan,
Malaysia and Korea. In Other Regions, the Group aims to grow
sales in Latin America and the Middle East.
Operational Excellence
underpins VTech’s success. As costs in
China are set to rise further, operational efficiency is becoming
increasingly important. In addition to process improvement
and product optimisation for manufacturing, the Group will
increase its application of automation by deploying more
commercially available and in-house custom-made machines.
This will reduce the number of workers further, even as
output increases. The Group will also benefit from enhanced
competitiveness as automation improves product quality,
reduces time to market and increases flexibility in production.
Outlook
Economic recovery in the US appears to be on a sustainable
footing, while the economies of Western Europe are improving.
With a stabilised market environment and new products ready
to be launched, the Group is targeting further revenue growth
in the financial year 2015.
In addition to process improvement and
product optimisation for manufacturing,
the Group will increase its application
of automation by deploying more
commercially available and in-house
custom-made machines. This will reduce
the number of workers further, even as
output increases.
5
VTech Holdings Limited
Annual Report 2014
