May 2009 Archives

Yesterday I went out looking at antique furniture on the outskirts of Beijing with Roger Schwendenman of the ACF company. Roger is a specialist in wholesale furniture and has his own restoration workshop, and it was interesting to go look at unrestored furniture "fresh from the countryside" versus the fully restored variety that we see at most furniture sellers in Beijing.

In years gone by furniture vendors from the countryside came right into the city to sell their furniture, but these days with increasing ground rents and lack of space in the city the trade is conducted much further out from the city, in this case about 45 minutes drive from Guo Mao. This spot is strictly a wholesale market, with unrestored items piled high in the warehouses of individual sellers from different parts of China. In a couple of hours we were only able to scratch the surface of what is a very large market. We visited several vendors from north China (Shanxi and Inner Mongolia), though apparently there are sellers at the market from most regions. It's been a long time since I have looked at wholesale furniture like this (the last time I looked at it seriously was back in the mid-90s) and it was reassuring to see that there is still old furniture out there! Vendors are now going a lot further afield for their old furniture than in the '90s and many are bringing in furniture from the border regions versus the central China styles that were more common in previous years.

Aside from carved coffers, money chests, cots for children, side tables and other typical Chinese furniture we also saw wood blocks for printing funerary "money", door hangings and weapons for defending against wolves.

Buying pieces independently from this market is tricky (you would need to find transport, then arrange for the piece to be cleaned and repaired), but Roger can help with that aspect, and has been taking wholesale customers from overseas to this market for many years. You would also need to be a little braver and bolder than the average customer since you will need to imagine what a dusty, unrestored piece will look like in its finished state (the difference can be dramatic!).

I am not sure if Roger plans to make these trips a regular event, but I can certainly recommend it to anyone who wants to trace antique Chinese furniture back to its source. (Roger is the tall one in the center of the photo).

From May 1st 2009 we reduced the prices of all our own-make Tibetan rugs by 33%, with no compromise in quality. This is a major change for us, and the culmination of three years of hard work. It's also the most obvious indicator of some more profound changes in the way we run our business.

To backtrack a little, when we first opened our carpet business in Beijing in 1998 it was a very different kind of operation to the one we have today. We sold carpets in a very small boutique store in the Kempinski Hotel (we finally moved out of the Kempinski in March this year, and our Beijing store is now at Danshui in Shunyi). From the beginning however we found that most of our sales were not to hotel guests but to residents furnishing their homes. This realization guided most of what follows.

At the time we opened our store our carpets were contract manufactured for us by a supplier in Tibet. Those who know something of purchasing theory will know that having a single supplier is an uncomfortable position to be in: it doesn't leave you in a strong position to negotiate a better price, and you are very vulnerable if your supplier encounters difficulties.  So in 2001 we set ourselves the target of having three excellent suppliers, a target that came directly from purchasing textbook theory. One of these suppliers which would be our own workshop in Lhasa, in order to get the most competitive price and to ensure that we would always be in the driving seat as far as quality and design were concerned.

Candidly, I also had a personal motive in wanting our own workshop in Lhasa. I enjoy making textiles, and I enjoy experimenting with design and color. I also have an interest in natural dyes, which are not popular where commercial workshops are concerned. Owning our own workshop is a chance to experiment with fewer constraints.

So much for the theory. In practice it took us until 2006 to turn vision into reality. We bought land near Lhasa, on the banks of the Kyichu river, built a weaving workshop and we are gradually building up a skilled workforce. With our own production facility for our Tibetan rugs we are able to make exactly the designs we want, and also to ensure that no compromises are made with raw material quality. This latter aspect was a big problem with contract suppliers, who were forever looking for ways to cut costs, particularly by substitution of cheaper wools. This aspect can now be guaranteed.

While building up our own workshop, we added two more suppliers: the excellent and internationally renowned Michaelian and Kohlberg company who have been making handmade carpets in China for more than twenty years and who specialize in Middle Eastern rug making techniques. We have also recently added kilims and other items from rug makers in Afghanistan, who are very competitive in terms of price. These textiles complement our Tibetan rugs and ensure that we can offer the full range of styles and price points to those designing their homes.

My particular expertise is in design, development and color, and we have built a unique facility for creating new colors, using the best of both traditional and contemporary dye methods. Our eventual aim is to broaden our current scope to work with other professional carpet manufacturers in Asia, in addition to our own weavers, to make better and more varied carpets (and we invite potential carpet manufacturing partners to get in touch). We have already participated in a successful project to research and document traditional dye methods in Tibet, and more work is ongoing in this area. We also lead the field in environmental and product safety, particularly through correct choice of non-toxic starting materials and processes.

Back to price. Though this wasn't the only reason for founding our own workshop, it was a major factor, especially for our customers. By eliminating one layer in the supply chain as well as reducing costs generally in our operation we are now able to offer rugs at a significantly lower price, and that is what we have done. The true extent of this is only apparent when you consider that the price we charge today is actually 40% lower than when we opened our business in 1998: when inflation is taken into account our prices today are 60% lower in real terms than when we began. A major factor in our favor versus other carpet companies worldwide is that we don't maintain any offices overseas, since the overheads from these can often add up to more than the production costs of the carpets.

In keeping with our focus on design and interiors we moved out of our Beijing hotel location earlier this year, and we are now in a new store in Danshui town in the Shunyi district. We have more space here (200m2) and display a wider range of carpets and sizes. In Shanghai we have a lovely two-storey space in An Fu Lu in the French Concession district.

You can still find some rugs that are cheaper than ours here in China ... provided you are prepared to compromise on both wool and dye quality and accept (for example) short-fiber Mongolian wool and Chinese dyes you might be able to save a further 30% or so. Is it worth it? Come look at the colors and wool in our rugs and then decide.

We often get orders for rugs from former expat residents of Beijing and Shanghai who have returned to their home countries. While here in China it is easy to lose sight of the huge difference in price and service level between here and "back home". The kinds of service for custom rugs that we offer is only available in London and New York (for example) from a very few top-end suppliers, and it comes at a price that is usually at least five times the cost of one of our rugs, and often more. This is because the cost of employing a designer in a London office is quite staggering. Even a basic "off the peg" rug costs three times the price of a Torana rug here in China.

Both expat residents, local residents and visitors to Beijing and Shanghai are warmly invited to come see our stores, and also to contact me to talk about the services we offer. I am traveling fairly often these days, but always interested to meet in one of our stores by arrangement, if I don't happen to be there on the day in any case.

One final word: our price list for 2009 is now set, but we don't guarantee to keep our prices fixed at this level for ever. Most of the costs that can be driven out of our operation have been driven out already, and inflationary pressures will certainly build as economies come out of recession, led by China...