Lee Bou company analysis

Part
01
of three
Part
01

Lee Bou SWOT Analysis

Taiwan-based Lee Bou is a leading 3D microinjection label manufacturer that offers services such as silicone application, printing, heat transfer application, and woven badge embroidery. Its strengths lie in its extensive experience, well-established research and development unit, compliance with safety and sustainability standards, breadth of expertise, and strong presence in Asia, while its weaknesses lie in its limited online presence, seemingly inadequate marketing, and lack of production facilities outside Asia. Lee Bou can take advantage of the expected growth in the screen printing, male end user, and North American segments of the global decorated apparel market, but it has competitors and rising raw material prices to contend with.

Strengths

  • Lee Bou’s strengths appear to be its extensive experience, well-established research and development unit, compliance with safety and sustainability standards, breadth of expertise, and strong presence in Asia.
  • Established in 1989, Lee Bou has more than 30 years of experience in label manufacturing. It celebrated its 30th anniversary in 2019.
  • Its experience has made it a leading player in the industry. At a NE Materials Show, the company was described as “the largest manufacturer of OEM 3D microinjection labels.” At present, its monthly production stands at over 10 million pieces.
  • Lee Bou, which has more than 2,000 employees, has a 150-member strong research and development team. It has 10 sample development teams spread across its headquarters in Taiwan and its Chinese production facility.
  • It spends 8% of its revenue on research and development, and it currently holds six patent certificates.
  • The company is compliant with safety and sustainability standards, including CE, CNS, ISO, OEKO-TEX, and UL. 2006 was the year it was able to obtain its ISO 9001:2000 certification.
  • The breadth of its expertise is evident in its range of products and services. Its services encompass silicone application, printing, heat transfer application, thermoplastic polyurethane (TPU) application, laser engraving and cutting, reflective or glow-in-the-dark (GID) product application, leather application, and woven badge embroidery.
  • Apparel, shoes, headwear, pullers, key chains, accessories, and coasters are among the products it handles. Lee Bou has two TPU-film-manufacturing subsidiaries that it can leverage if needed.
  • Lee Bou has a strong presence in Asia. It is headquartered in Taiwan, but it has one location in Hong Kong, two locations in China, and four locations in Vietnam.

Weaknesses

  • Lee Bou’s weaknesses appear to be its limited online presence, seemingly inadequate marketing, and lack of production facilities outside Asia.
  • The company website links to only one social media account, a Facebook account. Lee Bou does not appear to be actively using this account, however, as the account has only 107 likes and 108 followers, and the latest post on this account was on December 19, 2017.
  • Lee Bou provides an English version of its website, but the contents of this English version is very difficult to understand. Press coverage of the company is nearly non-existent as well even though the company claims it is the global leader in its industry.
  • The company does not seem to be promoting its services to the best of its ability. Apart from setting up a booth at The NW Materials Show in Oregon and The NE Materials Show in Massachusetts, it does not seem to have any other publicized marketing activity.
  • It has eight locations or production facilities in total, but all of them are located in Asia. Its lack of physical presence in regions outside Asia may discourage non-Asian clients from availing its services.

Opportunities

  • The screen-printed product market, the men end user market, and the North American market all present opportunities that Lee Bou can take advantage of.
  • The screen printing segment of the global decorated apparel market is expected to grow faster than the digital printing, dye printing, embroidery, and screen printing segments during the period 2019 to 2025, and is projected to experience a CAGR of around 12%. Screen printing offers both durability and versatility, as it results in long-lasting graphics and can be applied to nearly any type of fabric.
  • The global decorated apparel market for male end users is expected to grow faster than the market for female end users, and is projected to experience a CAGR of 12.26% during the period 2019 to 2025. Growth will be driven by custom sports apparel printing.
  • The North American market for decorated apparel is expected to grow at a CAGR of 12.25% during the period 2019 to 2025, faster than the other regional markets. The markets for sportswear and embroidered and heat-printed products are all drivers of this growth.
  • Lee Bou may also choose to improve or expand both its online and physical presence.

Threats

  • Lee Bou faces the threats of competition and rising raw material prices.
  • As with any other company, it has competitors that could eat its market share. In the 3D label manufacturing category, for example, one of its competitors is Sun Print, which is also a 3D label manufacturer with production facilities in Taiwan, China, and Vietnam. Similar to Lee Bou, Sun Print manufactures 3D microinjection labels not only for apparel but for other products as well.
  • It competes with apparel branding service providers such as Lion Brothers. Similar to Lee Bou, Lion Brothers offers apparel decorating services such as embroidery, heat transfer, and laser etching or perforating.
  • Lee Bou also has to deal with rising raw material prices. Silicone prices, for example, are rising due to supply shortages. Lee Bou, which uses silicone among other materials, may be forced to increase the price of its silicone application service as a result.

Research Strategy

Lee Bou’s online presence is very limited, as there is hardly any press coverage or reviews of the company, and the company only has its website and Facebook account. We attempted to research in Mandarin/Chinese as well because Lee Bou is based in Taiwan, but our efforts were unsuccessful. To find additional information, we examined reports and articles covering the markets that directly involve or affect Lee Bou.
Part
02
of three
Part
02

Lee Bou Company Profile

Lee Bou appears to serve mainly big sports brands and national sports teams. What sets Lee Bou apart from its competitors is its prompt and quality service. Lee Bou has eight subsidiaries in total, but there is no evidence in the public domain that Lee Bou has entered into any partnership, merger, or acquisition agreement,

Main Customers

  • Lee Bou does not readily list the types of customers it serves. However, according to a business information site, Lee Bou is a global brand supplier of Adidas, Nike, and Puma.
  • The site also indicates that Lee Bou manufactures the custom leather label of Adidas, the 3D-effect custom patch of Nike, the reflective custom patch of New Balance, and the silicone print label of the England soccer team.
  • Lee Bou’s Products page also shows that Lee Bou has manufactured racket dampeners for Wilson.
  • This information suggests that the main customers of Lee Bou are big sports brands such as sportswear brands, national sports teams, and sports equipment brands.

Competitive Advantage

  • Lee Bou’s edge over its competitors appears to be the prompt and quality service it offers. This is what the company highlights on its homepage.
  • Lee Bou is able to provide a high level of service because of its in-house production of TPU films and other hot-melt adhesive films. Lee Bou is self-sufficient to an extent because it has two affiliates or subsidiaries that manufacture these films and develop and test new materials.
  • Another factor that enables Lee Bou to provide prompt and quality service is its wide network of facilities in East Asia. Lee Bou has facilities across Taiwan, China, Hong Kong, and Vietnam that offer label or trademark application services.

Partnerships

  • There is no indication in the public domain that Lee Bou has entered into any partnership in the past three years or any year for that matter.
  • The closest to a partnership that can be found is Lee Bou’s regular participation in The Materials Show as an exhibitor. Every year, American Events produces The Materials Show twice in the Northeastern United States and twice in the Northwestern United States. The show is reportedly one of the best shows for “materials and component sourcing.”
  • Lee Bou has started participating in the show since 2018. It is set to attend again this February 2020.
  • Brands Adidas, New Balance, Nike, Puma, and Wilson may be considered partners of Lee Bou since Lee Bou is reportedly a global supplier of these brands.

Mergers and Acquisitions

  • Lee Bou does not appear to have undergone any merger or made any acquisition. Though the company has several subsidiaries, no evidence of any merger or acquisition could be located in the public domain.
  • Outside Taiwan, Lee Bou has established six subsidiaries, namely, Dongguan Lee Fong Label Manufacture Ltd. (China), GreatCo Development Limited (Hong Kong), Wuxi Lee Bou Silicon Industries Co, Ltd. (China), Lih Bao Only Member Company Limited (Vietnam), Vietnam Lee Bou International Co, Ltd (Vietnam), and Lee Bou International Binh Duong Company Limited (Vietnam).
  • These subsidiaries were established in 1992, 1992, 2002, 2009, 2014, and 2020, respectively. Vietnam Lee Bou International Co, Ltd was expanded in 2015.
  • Since these subsidiaries were established to expand Lee Bou’s production capacity, these subsidiaries likely offer the following same services that Lee Bou, the parent company, offers: silicone application, printing, heat transfer, thermoplastic polyurethane (TPU) application, laser cutting and engraving, reflective or glow-in-the-dark (GID) application, leather or suede application, and woven badge embroidery.
  • Apart from these six subsidiaries, Lee Bou also has two subsidiaries that manufacture TPU films, namely, Chang Tai Chemical (Huizhou) Co, Ltd and Logotex Industrial Co., Ltd. Chang Tai is located in China, while Logotex is located in Taiwan.
  • Lee Bou spent $10 million to build Chang Tai in 1998. Chang Tai is equipped with polyester polyol and polyurethane resin reactors and sophisticated equipment for TPU film manufacturing.
  • The facility also serves as a research and development center where new products are developed and tested. Among the products that are being explored are environment-friendly materials.
  • Logotex, which was established in 2007, is dedicated to innovation and manufacturing activities relating to hot-melt adhesive film products such as TPU, EVA, and polyamide films.

Research Strategy

Since Lee Bou has a website and a Facebook account, and it may have shared some relevant information on these sites, we started our research with an examination of these two sources. Only the website proved helpful, however, because Lee Bou is not active on Facebook. We turned our attention to business information sites (e.g., List Company) and the media coverage of Lee Bou to find additional information but quickly found that media coverage is almost nonexistent. Our attempts to research in Chinese (Traditional), the main language Taiwan uses, were also fruitless. We only found some information about Lee Bou’s subsidiaries and the events Lee Bou is attending. The lack of information may be due to the fact that the company is based in Taiwan and is privately held. The details presented above are based on the limited information that is publicly available.
Part
03
of three
Part
03

Lee Bou Revenue and Investments

Revenue estimates for Lee Bou International Co. Ltd in Taiwan and its subsidiaries across China, Hong Kong, and Vietnam place the annual revenue of the whole group at $40 million to $75 million. Chang Tai Chemical (Huizhou) Co. Ltd and Logotex Industrial Co. Ltd house Lee Bou’s innovation or research and development centers. Lee Bou spends 8% of its revenue on research and development.

Revenue

  • D&B Hoovers, a business research company, provides the following estimates of the revenues of Lee Bou International Co. Ltd and its subsidiaries:
  • Given the aforementioned revenue estimates, it appears that the revenue estimate for Lee Bou International Co. Ltd is not yet inclusive of the revenues of its subsidiaries.
  • The aforementioned revenue estimates total to the following revenue range: $40.93 million to $50.93 million.
  • Revenue estimates for Dongguan Lee Fong Label Manufacture Ltd, Wuxi Lee Bou Silicon Industries Co. Ltd, and Lee Bou International Binh Duong Company Limited could not be located in the public domain.
  • These three subsidiaries are similar to Lee Bou International Co. Ltd and Vietnam Lee Bou International Co. Ltd in that they provide labeling and trademarking services. If it is assumed that their revenue is in the same range as that of Lee Bou and Vietnam Lee Bou, it can be estimated that the revenue of Lee Bou, as the parent company, is in the $40 million to $75 million range.

Innovation Investments

  • Lee Bou has disclosed very few details about its investments in innovation. All it has shared is that it spends 8% of its revenue on research and development and that it has 150 employees in its research and development team.
  • It has also shared that it spent $10 million in building Chang Tai Chemical Industry (Huizhou) Co. Ltd.
  • Chang Tai Chemical Industry (Huizhou) Co. Ltd and Logotex Industrial Co. Ltd house Lee Bou’s innovation centers.
  • Chang Tai, which was established in 1988, around 9 years from the time Lee Bou started operations, serves as both a manufacturing plant for thermoplastic polyurethane (TPU) films, polyester polyol, polyurethane resin, and other materials, and a research and development center for new materials.
  • Chang Tai reportedly has a total capitalization of $5 million to $6 million and has spent $65 million to $70 million on manufacturing equipment alone. Though its customers include technology firms such as Coolpad, HTC, Huawei, Lenovo, Samsung, and TCL, it supplies Lee Bou and its subsidiaries throughout China, Hong Kong, and Vietnam with the materials they need to provide labeling or trademarking services such as silicone application, heat transfer, thermoplastic polyurethane (TPU) application, laser cutting and engraving, and reflective or glow-in-the-dark (GID) application.
  • The materials that Chang Tai produces have applications in the following areas: (a) automotive, chemical, footwear, and toys, (b) leisure, packaging, and sports, (c) textile and leather, (d) home improvement, and plastic and rubber industry.
  • In one source, Chang Tai was described as a subsidiary of Logotex Industrial. It is worth noting, however, that Logotex Industrial was established in 2007 only.
  • Logotex Industrial focuses on innovation efforts to produce the best possible TPU films and other hot-melt adhesive film products such as ethylene vinyl acetate (EVA) and polyamide. The team at Logotex strives to produce desirable chemical and physical properties such as friction resistance, environment-friendliness, weather-friendliness, low toxicity, recyclability, and versatility.
  • The products that Logotex manufactures are categorized into hot-melt adhesive films, multi-layer TPU films, and decorative films. Similar to Chang Tai, Logotex Industrial supplies Lee Bou and its other subsidiaries with these materials.

Research Strategy

To find the revenue and innovation investments of Lee Bou, we began with information that Lee Bou itself has published. This information is limited to what Lee Bou has published on its websites and Facebook account, as Lee Bou’s online presence is defined by these sites only. Lee Bou and two of its subsidiaries have their own websites. These sources offered little information, but we were able to determine how much of its revenue Lee Bou spends on research and development. We also found the amount that was spent in the establishment of Chang Tai, one of the subsidiaries that house Lee Bou’s innovation centers.

We then proceeded to check if third parties such as news outlets and organizations have covered the revenue and innovation investments of Lee Bou and its subsidiaries. This proved fruitless, however, because media coverage of Lee Bou is almost non-existent. After researching alternately in English and Mandarin Chinese (Traditional), the main language used in Taiwan where Lee Bou is based, all we were able to find was a few sources noting Lee Bou’s participation in events. The lack of information is perhaps due to the fact that Lee Bou is a privately held Taiwanese company.

Lastly, we turned our attention to business information databases such as Hoovers, List Company, and Global Sources. From these databases, we were able to gather the revenues of Lee Bou in Taiwan and five subsidiaries. To find the revenue of the three remaining subsidiaries, we proceeded to check if the Taiwanese government has a business information database. We found one but, for some reason, we were unable to locate Lee Bou. To estimate Lee Bou’s overall revenue, we assumed that the revenues of the three remaining subsidiaries are more or less the same as the revenues of Lee Bou in Taiwan and Lee Bou in Vietnam.
Sources
Sources