Going native
Sheico makes all manner of water sports clothing and accessories—for surfing, rafting, sailing, and paddle-boarding to swimming and diving. It enjoys a total global market share of 60‡70%. With the Chung Hsin brand, company chairman Shiue Pi-goong established the company in 1968, manufacturing raincoats and rubber boots. In 2018, Sheico celebrated its 50th anniversary. In order to keep labor and factory construction costs down, it has been locating factories overseas for 30 years. By this point it has well-oiled management systems in place.
At the company’s second Cambodian plant, in Phnom Penh, there are three separate factory buildings that make flotation vests, diving clothes, and a variety of customizable sports garments and equipment. They produce more than 200,000 pieces a month.
Sheico requires all its Taiwanese management staff to “go native.” They must learn Cambodian, and they are regularly tested on their proficiency, with scores included in performance assessments. With the Taiwanese staff speaking Cambodian, it both prevents misunderstandings when meaning is lost in translation and makes it easier for the staff to gain the respect and trust of Cambodian workers.
2008, when the company established its first factory in Cambodia, was a great learning year for Sheico. Back then some of the company’s local management at its Shenzhen plant led the strikes. After the strikes were called off, a share of their employees left to work for a competitor. There was even one employee who secretly photographed the raw materials in the company warehouse and sold the photos for RMB50,000‡100,000.
Min Shiue says that based on its experiences in mainland China the company decided that it wouldn’t produce products in China that made use of its core technologies. Sheico’s R&D and raw materials production are based in Taiwan, with its headquarters located in Yilan. Each year the company files more than ten patents for processes connected to the texture and functionality of its raw materials, as well as to its dyeing and finishing processes. The company makes an insulating neoprene fabric that can be produced in thicknesses ranging from only 0.5 millimeters to more than one centimeter. It is used to make the lightest surfer’s wetsuits in the world.
It has turned out that one key to Sheico’s successful global strategy has been to remain based in Taiwan, where its focus on R&D enables it to keep its lead over its competitors. Meanwhile, by establishing factories overseas, it has leveraged the favorable treatment the EU offers ASEAN countries. By playing to its strengths and adapting to local conditions, it is conquering the world.
Sheico managing director Min Shiue is working diligently to maintain the company’s leading global position.
Sheico employs many Taiwanese managers to control production at its overseas operations. They are a major reason the company is able to maintain its industry-leading global status.
Sheico has developed special ink that it digitally applies to Glideskin wetsuits to create highly realistic images. The breakthrough earned it a German Design Award in 2018.
Sheico uses Japanese industrial sewing machines, which don’t skip stitches, thus maintaining a high level of quality.