Legacy Business Strikes while the Stove is Hot Amid the Pandemic

Home cooking has been made popular because of the restrictions on restaurant dine-in services and social distancing rules. This allows CGS (Crown Gas Stove), found more than 40 years ago, to turn the “kitchen” table around. Mr. Kot Man Tai, Managing Director of Crown Gas Stoves (Holdings) Co. Ltd., said the company’s predecessor focused on liquefied petroleum gas (LPG) and gas stove business, and once he took over, he started to transform and introduce a range of kitchen products, bathroom and electric appliances as well as kitchen engineering services to broaden the market. He believes the future of CGS is still full of promise as he saw a 20% jump in gas stove online sales, despite the pandemic ravaged.

Declining Industry Fights Its Way Out

Open kitchen is becoming more widespread among Hong Kong residences, fueling the demise of flame cooking in those new households because of safety issue, and prevalence of flameless cooking. “70% of our current revenue still comes from gas stove products, one of our customers’ favourite is a glass-top built-in LPG stove, which is as slim as a 1-dollar coin and requires gas tube size of pit on cabinet desktop for mounting only. In addition, we have been introducing air fryer and Korean BBQ grill to meet the demands for flameless cooking.”

The company has been testing the water on new market sectors and collaborations as stove business reported flat growth. “Food and cleaning supplies are the must-have items for kitchen, so we sourced foods like canned abalone and detergent products, and marketed them using social media live platform to appeal to the younger generation. Sharing similar ‘housewives’ demographics, we also partnered with La Raine on their eczema / contact dermatitis-killing products. The synergy worked out nicely, as we both won new customers.”

Keep Abreast of Time in the Technology Bandwagon

As GS1 HK members for years, CGS always apply GS1 global barcode onto its products, no matter for its branded or distributed products. “Barcode not only helps us accurately log our inventory and in-out record, but also to get listed in the physical retail stores. Now it even bridges the offline to online world, enabling us to get listed onto e-commerce platform too.”

“Technology-wise, we have deployed electronic invoicing more than 10 years ago to reduce human errors. Tapping into the Government’s Technology Voucher for digital transformation, we have upgraded our website and integrated with our backend logistics system, so the sales support staff can issue and review the work orders more efficiently and accurately. We are also preparing to launch an app that allows customers to place orders and make payments easily online.”

“Besides Hong Kong and Macau markets, we have been exploring the Chinese market in Australia. After-all, cooking Chinese food with gas stove is easier to bring out the flavor in the dishes.” noted Mr. Kot. “In fact, CGS is fairly famous in Mainland China that some consumers cross the border just to buy and bring the stoves home, yet our operation in China ceased since the change of hands. As we see counterfeits and parallel imports manifest, we hope to enter the Mainland China market again as soon as the pandemic is contained.”

Customer Centric and A Job for Life

4 years in a row now, CGS has been crowned “Consumer Caring Company” since 2017 by GS1 Hong Kong. Their commitment to safe and reliable products, certificated with GU label by EMSD, along with their customer centric culture, have always kept the customers loyal. “We once received a sudden call from an old customer in winter time,

saying there’s no hot shower because the water heater broke down. We immediately arranged technician to fix the problem so the customer had hot water for shower that night,’ recalled Mr. Kot. “We also offer technology-enabled, personalised service to customers by reminding them to check their products and offering help if needed, as our transation records are able to show the inspection or replacement needed for products sold.”

Customer loyalty usually goes hand in hand with staff loyalty. With more than 40 employees, he stated, “Over 70% of our staff have worked with us for more than 15 years, one of them has been with me since I started the company.” Treating employees like family and providing training and coaching to support staff career, are the major reasons for his staff to dedicate their lifetime for the job. “The sad truth is, LPG is an old-fashioned business with very few new blood, so we are also recruiting new immigrants from China and Southeast Asians to support our development.”

SME Strategy: Win Amid Stability

As a member of GS1 Hong Kong’s SMEs Advisory Board, Mr. Kot said the latest Government’s Budget has offered adequate assistance to local SMEs, and the Quality Migrant Admission Scheme also provided unpopular industries with manpower support. He believes technology development is the focus in Greater Bay Area, so SMEs in trading sector need to commit time and resources to compete and open up the market. For Southeast Asian markets, he advises SMEs to understand the local regulations and culture inside out, and prepare sufficient resources on brand & product promotion to fully uncover the opportunities.