In the early 1990s, when SAGA Audio Equipment Co., Ltd., or simply SAGA, was founded, it was an obscure manufacturer of small appliances in China, primarily producing Bluetooth speakers and karaoke machinesThe company faced significant challenges during the Asian financial crisis in 1997, which almost led to its demiseHowever, this crisis also paved the way for a crucial transformation that would ultimately redefine the company’s future.

During the mid-1990s, home theater systems gained immense popularity among consumersFor those who grew up in the 80s, the sight of speakers flanking television sets in living rooms might seem familiarEarly home audio systems typically did not include amplifiers, consisting merely of passive speakersRecognizing the market’s potential, SAGA embarked on innovative designs to incorporate amplifiers into speakers, thus creating what is known today as active speakers

This pioneering effort in miniaturizing amplifiers marked SAGA as a forerunner in producing home audio equipment, ultimately sparking a revival for the company during a time when it seemed on the brink of collapse.

However, the home audio industry posed a low technical barrier to entry, and product designs often fell into a pattern of homogeneity, leading to limited growth potential within the sector.

It was around 2000 that serendipity struck; SAGA received an unexpected order from a Hong Kong-based foreign trade agent to develop car amplifiersInitially, production was limited to small batches, but to our surprise, the agent was pleased with the results, leading to an increase in orders.

Through this venture, SAGA recognized that automotive sound systems held greater potential for growth, both in international and domestic markets, due to their higher technical demands

Developing automotive amplifiers requires navigating a range of complexities—from product design to the intricate circuitry necessary for withstanding the challenges posed by the automotive environment, such as vibrations, dust, humidity, and extreme temperature variations.

Despite being in the nascent stages of this automotive audio journey, where production varied between zero and thousands of units, SAGA made the pivotal decision to pursue dual pathways, transitioning into automotive sound systems.

At that time, the global automotive industry’s growth trajectory indicated that automotive audio would inherently adopt a globalized approachThe domestic market in China was still immature and unable to sustain such niche segmentsAs a result, from that moment onwards, a significant proportion of SAGA's business began deriving from overseas marketsBy 2008, SAGA had increased its annual production of automotive amplifiers to over one million units, achieving the status of the world's largest producer of these components, with sales extending to more than 100 countries and regions.

The First Phase of Global Expansion: From Discovery to Partnership

Global engagement has always been woven into SAGA's DNA

Before even stepping into the automotive amplifier arena, we were involved in cross-border tradeWhen I first joined SAGA, having recently graduated from university, I managed our offline retail outlet in Guangzhou, frequently visiting border cities to explore business opportunities, and I first interacted with traders from Myanmar, Thailand, and elsewhere during those visits.

For SAGA back then, the fastest route to unlocking the global market was through participation in exhibitionsA memorable experience occurred in 2004 when we rented a significant 60-square-meter booth at the Consumer Electronics Show (CES) in Las VegasIt drew curiosity from many American brand representatives passing by, wondering: “Who is SAGA? Is this a well-known brand that I haven’t heard of?”

This chance encounter allowed us to connect with various key clients, including MB QUART, a well-established German automotive amplifier brand with a history spanning over 70 years

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At the time, MB QUART was considering supplier changes, but they remained skeptical about our qualificationsShortly after the exhibition, they, alongside their American distributor, traveled to Hong KongWe even sent representatives to bring them to our factory for a tourThis early partnership has endured, and to this day, we maintain a close collaboration, now nearly 25 years strong.

During these initial growth stages, we adopted a strategy of attending international trade fairs every two months, tirelessly promoting our brand globally, regardless of the scale of the eventsEven minor, seemingly insignificant local exhibitions were opportunities to connect and gather leadsThis strategy helped SAGA build a robust clientele worldwide.

An interesting anecdote involves TAESHIN INTERTRADE, now one of Thailand's largest importers

The owners, once a humble couple running a small retail operation, met us at the Hong Kong Electronics Fair in 2003. Initially, MrSee was knowledgeable about audio equipment but had no experience in import tradingI later visited their store in Thailand and was struck by their genuine enthusiasm and determination, despite financial constraintsWe tailored products based on their market needs, and trusting our partnership, we extended credit terms for up to a year.

A similar story unfolds in Indonesia with MrIrwan, who started as an inexperienced young entrepreneur but, through a decade-long collaboration, has built VENOM, a renowned automotive amplifier brand in IndonesiaThroughout these relationships, we witnessed clients grow and thrive in their markets, wholeheartedly embracing SAGA products.

People often wonder how we approached these small clients back then, considering the risk of potential fraud

My father instilled in me the importance of evaluating people and fostering long-term relationships in businessJust as MB QUART once believed in us, our journey to a new country involved transitioning from mere transactional relationships to mutual achievements, which invariably requires time.

SAGA represents a departure from strictly brand-centric globalization by emphasizing mature products and servicesOur growth trajectory aligns with the success of our clients; as they flourish, we receive more orders to fuel our expansionIt’s fair to say that SAGA enjoys deep-rooted relationships with clients in over 100 countries and regions worldwide.

Today, SAGA collaborates with a variety of brands, partnering with both leading industry names and regional small to medium-sized enterprises in diverse marketsSome relationships have evolved into ‘back-to-back’ arrangements, making SAGA the service provider for specific brands

As mentioned earlier, with MB QUART, we acquired operational rights across Asia, being responsible for the brand's R&D, production, sales, and management in the regionWe operate under the belief that only locals understand local needs—we use Asian talent to design products tailored for the Asian marketBy 2023, under our management, MB QUART witnessed a staggering 200% increase in sales across Asia.

Even during the pandemic lockdowns, we maintained weekly project development meetings with global clients, averaging three to five sessions a weekIn late November 2022, I was part of a delegation of entrepreneurs from Foshan, China, on a mission to secure ordersThis journey took me from Frankfurt, Germany, to Poland, then to Italy, Luxembourg, and further to the United States, Mexico, followed by trips to Thailand, Malaysia, and AustraliaOver nearly three months, I visited nearly all of SAGA’s important clients

Many were pleasantly surprised to see me, exclaiming, “Finally, an old friend has returned!” Many admitted I was their first visitor since the pandemic broke out, so I needed to return with tangible ordersBy the end of my extensive visits, I successfully brought back over 100,000 orders for the company.

The Second Phase of Global Expansion: Identifying Demand Before Production

Audio systems from different brands vary greatly, much like fashion—there are those who prefer sporty styles, while others favor formal wearThe differences in sound systems can also manifest in audio quality and overall designIn terms of sound quality, some consumers enjoy softer musical genres, while certain brands focus on vocal-centric soundscapesSAGA’s own brand, Marriola, embodies a trendy persona that resonates with younger audiences, favoring a heavier bass experience

Meanwhile, American brands like JBL may emphasize bass-heavy rock music.

The disparity in consumer preferences doesn’t merely reflect brand identities; it also illustrates regional characteristicsIn confronting a plethora of global niche markets, it becomes indisputable that copying a single explosive product does not guarantee success, which has been one of the most arduous challenges SAGA has faced throughout its years of international expansion.

For instance, high-end DSP digital tuning amplifiers enjoy popularity within the Asian market but are far less favored in the United StatesDespite the Asian and European markets’ enthusiasm for such features, American consumers tend to find these tuning technologies cumbersomeObserving this first-hand while entering the American market, I learned that, despite its standing as a technological powerhouse, the average American consumer appreciates simplicity over complexity

Consequently, we adjusted our strategy to focus on traditional amplifier products while incorporating new features sensibly and straightforwardly to align with American consumer expectations.

This perspective similarly applies to high-power amplifier products in the U.S., where we produce models rated at 5,000 watts, 8,000 watts, and even up to 10,000 wattsTo put this into context, a 10,000-watt amplifier can power 20 fifteen-inch subwoofers to deliver sound so loud it shatters glass, a phenomenon colloquially termed ‘street blasting’ in the U.SmarketAmerican consumers genuinely enjoy this auditory experienceHowever, this contrasts sharply with preferences in Asia and Europe, where consumers lean towards softer music, necessitating the design of compact products that can be discreetly placed beneath car seats—similar in size to a mooncake box.

Beyond merely altering product designs, I believe that for small to medium enterprises venturing abroad, the most crucial aspect is adjusting marketing philosophies

From SAGA’s perspective, we must create products aligned with market demand rather than producing items for sale based solely on our designsIn this light, we do not conduct market research traditionally; we do not create new products on a whimInstead, we follow a reverse approach—identifying market demands first and then developing products that meet those requirements.

Curious minds may wonder how we predict these demand trends or where we gather such insightsOur sources of information are essentially embedded in the minds of our brand clientsMy method may seem outdated or even simplistic: extensively visiting various markets and engaging in direct dialogues with customersHowever, our discussions prioritize future needs rather than immediate orders.

Recently, I returned from Mexico, where I stayed at a local HF AUDIO brand client's home

For three days and nights, we discussed the local market and its futureI firmly believe that if a company can achieve this depth of engagement with clients, securing orders becomes significantly more feasible.

However, building rapport with clients takes time; it isn't feasible for a client to outline their requirements today, prompting a company to rush to production tomorrowClients likely share their needs with numerous suppliers, thereby heightening competitive pressuresIn such a scenario, every factory may edge closer to underpricing their offersIf a product sells for just fifty dollars, how can companies maintain profitability under these conditions?

Therefore, recognizing the strengths of Chinese enterprises is vitalOur manufacturing capacity represents a distinct advantage, while brand marketing remains an area where Chinese companies need to enhance efforts