It’s said that if you give a man a fish you feed him for a day, but if you teach that man to fish you feed him for life.

Okay, but what kind of life would that be? Fish day after day—morning, noon, night and fourth meal—until all that oily build-up’s oozing from his pores and you’ve pretty much guaranteed your piscatorial pupil of never getting another date. Think! Perhaps you could have mixed in a class called Cobb Salad 101, or how about doing something that could be beneficial to both of you and give that man a job in the fishing industry? No, we’re not talking about one of those Deadliest Catch gigs where what passes for HR is a guy named Burl removing a hook from your cheek, again. We’re talking about recreational fishing, fun fishing—angling, Ducky; nice clean boat, nice clean companions, big smiles, blue water, the kind of fishing you see on beer commercials and, you know, other beer commercials. Give him the kind of gig Mitch Birt has. Better yet, have him observe how Birt goes about making money for Penn Reels.

Birt is brand manager in Australia for South Carolina-based Penn, one of fishing’s oldest and most respected names and one, like so many companies in so many fields—not to mention streams—that see enormous possibilities for growth outside the United States. The company depends on guys like Birt to find new customers while keeping old ones satisfied. They are both mentor and marketer, people who can offer a sales pitch one moment and a sympathetic ear the next. It’s daunting work, being responsible for an entire country—and continent.

Then again the job has its moments, as it did early one morning last February. Birt found himself standing on the deck of a 56-foot chartered fishing boat 20 miles off the western Australian coast as he suddenly caught sight of the sun coming up over a tranquil Indian Ocean—glassed out and inviting—and stopped.

“I remember thinking, ‘Wow! I don’t think there is anywhere I’d rather be,’” he says. “It was just a moment where not much else mattered and, yeah, that was a work day.” Now before all of you start casting resumes at Penn, know that even in his reverie Birt is quick to add: “Having said that …”

It turns out that during his serene February dawn, Birt was hard at work checking on the spread of rod and reel outfits set up for that day’s product launch designed to get local dealers some water time with Penn products. “It was a showcase of new range but with a particular focus on the premium durables. We had around 25 different outfits on board to share,” he says. The launch was part of the “massive effort that saw us travel the country doing trade shows and water demo days” key to Penn’s reemergence in Australia.

“We just acquired our distribution rights back in Australia,” says Mike Rice, Penn business manager. Those rights had apparently been lost during the company’s decade of changing hands. Founded in 1932 by German immigrant Otto Henze, Penn Reels grew in popularity throughout the Great Depression in part because Henze’s simple and efficient designs—his motto was “Make it simple, make it work”—made it easy for anyone to use, including those who used the products for subsistence rather than sport. Penn continued to grow after Henze’s death in 1948 and was inherited by his son Herbert, who sold the company to two private investors in 2003. Just four years later the investors struck a deal for the iconic reel brand with tackle maker Shakespeare Fishing, but the company would be swallowed up by Pure Fishing the following year.

“Now that we have it we’re reintroducing the brand to both customers and consumers,” says Rice, who manages Penn business under the Pure Fishing umbrella.

Reintroducing the recreational product in Australia’s saltwater market looks nothing like the beer commercials. “The brand has a lot of heritage here built on the back of stalwarts like the International and the Spinfisher,” Birt says, but rebuilding the brand’s presence after its lost decade is like raising a sunken ship. “I think if a brand could speak, Penn would have busted out of a set of rusty old chains, looked back at the last 10 years and said, ‘Finally!’”

Yes, finally. There is, after all, a lot at stake in Birt’s industry. Last year, recreational fishing generated more than $41 billion in revenue in the United States alone. Recapturing a piece of the international pie requires Penn’s Australian brand manager log 12-hour office days and be on-call for phone conferences at all hours seven days a week, even when on the go. “You take one with the other in our industry.”

In other words, it’s not all days on the lake.

Rice says that whether it’s in the States or overseas, his company does nothing more important than listen to the consumer. For Birt, this meant that in the early days of Penn re-launching its brand in Australia, he would organize the aforementioned demonstration voyages—which yielded a sale that very day—to introduce new products such as the Spinfisher V (an update of the former “stalwart”) and Squall Lever drags, as well as educate people on a complete renovation of Penn’s rod range.

It’s all part of the company’s commitment to ensuring its international brand managers focus on the human touch. In an age of virtual offices, telecommuting, teleconferencing and all manner of technologies designed to keep people from actually meeting in the flesh, successful international businessmen know that the secret to success overseas is that there is no secret to it—that the same thing your customers desire in Stockton is what they desire in Sydney.

Sure, Penn communicates with its brand managers via frequent conference calls, but it also leads annual pilgrimages back to headquarters and Birt says he expects senior management to visit him in Australia at least two to three times a year. The conference calls are usually wide-ranging affairs covering not only general business but marketing activities, challenges and opportunities that may have come their way. At the meetings at U.S. headquarters, managers are not only expected to weigh in with what is going on in their neck of the world, but to lend whatever they have learned to others. In essence, they work apart but together.

ENGLAND’S ROCKY SITUATION

Birt’s European counterpart Robert Valkeneer says the world is getting smaller and smaller each day with things like social media. “It’s important to remember that there is a person on the other end of that technology,” he says, something he and Birt are always reminding themselves. “At the end of the day, the angler is our boss. Our goal is to help the angler catch the fish of a lifetime. It’s his quest, his search, his adventure—and we love being part of that adventure.”

Europe is a growing market for Penn and Mike Rice says the company has just recently put people in place to “help us develop the right products for the various markets within the region,” Valkeneer among them.

Not that it’s going to be easy. Every country of Europe and every region within that country has its own specific fishing styles and needs, dictated by topography, heritage and custom. Valkeneer says that England is a tough country to sell because its coastline and grounds change about every 50 miles.

“A sea-bass rod that sells on the southwest coast will not sell on the southeast coast because some areas have rough rocky bottoms and some have sandy bottoms and both need a different approach,” he says. Next the company struggles with preferences for cosmetics. “Again, England is different here than other countries.”

Valkeneer is currently working through the challenge with a rod series he developed this year called Regiment. He says the continent of Europe loves the design but England feels like it is a bit outdated. “I have changed some cosmetics of the typical English rods to their needs. These rods are specific for England and will not be sold in the rest of Europe. It is quite a challenge to serve each country with products they need.” To meet that challenge he tries to visit each country every two years to learn about the individual markets. “I have the luxury that we have some good coworkers and pro staff anglers that give me lots of feedback.”

Collaborating on the designs has led to such smashing successes as the Sargus reel, which Valkeneer says was by far his most successful for a host of reasons. “First of all the product was great and the value for the money was incredible, but above all strategic-wise it was perfect as well.” The Penn brand hadn’t lost its strength, but it hadn’t offered any new products for several years, either. When Sargus came on the market, Penn delivered a must-have product. “It was good for the shopkeepers but more importantly for the anglers who, after all, are the ones who ultimately decide if a product will be a success or not.”

How popular was the new reel? “One of the biggest compliments we had about the Sargus is that one of our customers told us he sold one reel of each size to two engineers from one of our biggest competitors.”

LIVING THE BRAND

In Vaulkner and Birt, Penn has found brand managers who have become not only the company’s face in their regions, but its ears, eyes and mouth both literally and figuratively. Fortunately for the brand, they’re not only good at what they do but passionate. They live the product. Consider that when Rice is asked about the status of Penn’s brand in Australia, he says, “Business is strong and our team is stoked Down Under.”

But Birt, who describes himself as the kid who “just stood at the end of mum and dad’s bed at four in the morning trying to get dad up so we could go fishing,” is less satisfied: “As far as getting the brand back to where we’d like it to be, I think that road still remains untraveled. We’ve had an exciting beginning to what looks like being a great ride, but our focus going forward is to continue to be the best value-for-money saltwater brand in the market.”

Having devoted most of his professional life to fishing, and much of his life before that, Valkeneer says his love of fishing runs so deep that working for Penn, and its parent company Pure Fishing, amounts to “having my hobby be my work. Who can say that?!”

Like Birt, Valkeneer has had his “Wow!” moment. His occurred while participating in a fishing competition he had organized for Penn off the coast of Kenya.

“We’ve had this competition for five years now and this year there were more than 20 boats, making it the biggest competition on the east coast of Africa,” Valkeneer says. “I was able to go there and do some of the official things like give prizes, do publicity and so on. I was also fishing in the event, which was excellent, and as you’re doing that you think, ‘Wow! What a job!’ I think of that almost every week to be honest.”

Hong Kong calls itself “Asia’s World City.” As global traders representing 150 nations descend on the Hong Kong Convention and Exhibition Centre, packing five full floors overlooking Victoria Harbor to vie for new partnerships at the sister events, Hong Kong Electronics Fair and ICT Expo, you’ll know it’s not a self-serving moniker. It might even be an understatement.

Ninety-thousand international buyers and more than 3,250 exhibitors—and this is just the Spring edition. Hong Kong’s Autumn Electronics Fair is known far and wide as the biggest of its kind. More importantly, it has earned a reputation as a gathering for people actually interested in doing business.

“In Hong Kong it’s more of a world market,” says Jason S.C. Hou, founder and director of Sales and Marketing of VocoPro, a La Verne, California-based maker of karaoke personal amplifiers. (See “Singing Praises,” Page 27.) He’s a 10-year veteran of the exhibition with as many as 30 worldwide partnerships generated through it. Want some perspective? “We tried China but had no return at all.”

At “Mainland” shows, says Hou, there’s a high proportion of spies looking to copycat products and compete; Hong Kong draws an audience that’s just the opposite. “You run into actual customers who want to buy,” he says. “They’re here to look for opportunity too.”

Organized by Hong Kong Trade Development Council (HKTDC), the Spring edition, now in its 10th year, has become as important to electronics traders as its Autumn counterpart. If Hou’s success were rare, there would be little demand for a second fair each year.

Rami Ezratty, vice president of Sales and Marketing for Brooklyn, New York’s Pure Acoustics, says he’s set up about half his company’s partnerships through Hong Kong’s Electronics Fairs. Here’s a scene from one of the speaker producer’s previous shows, in which he expounds on the difficulty of partnering with an Australian:

“The distributor walked by and said, ‘I love your product.’” Six months later it was on shelves Down Under, and that market has accounted for roughly half a million dollars worth of products for the past three years. Ezratty offers a simple reason for the brief courtship. “They liked what they saw and it was just a good business proposition for them.”

A relatively new addition to the show is Improv Electronics, which manufactures proprietary LCD screens out of its factory in Kent, Ohio, then ships them to China to be used in assembling its inexpensive writing tablets. “I do the Hong Kong Electronics Fair as kind of the Asian-central hub of electronics for the Asian market,” says Billy Chapnick, director of Marketing. “So we’re really looking at this to meet with a lot of Asian distributors and retailers and educate them on our product to grow the local market.” After just a few years at the fair, Improv has developed key distributor relationships that have boosted sales by securing shelf space at airports and toy stores, outlets where consumers are likely to make impulse purchases.

Others come to Hong Kong’s electronics fairs because of the wealth of suppliers, largely from the host territory or just over the border in China. Torrance, California-based iSound, manufacturer of audio accessories, has had a presence at both the Spring and Autumn exhibitions for more than a decade. Austin Jones, the company’s product line manager, says the resources of the event are unparalleled.

“Yesterday my boss told me, ‘Hey, I think the market is going to go toward children’s headphones. I need you to go out and meet some suppliers who can make us child-safe headphones.’ In a matter of half a day, I can go out and fill up my book with business cards and information from all different people. Pricing, everything—even get samples. And in a matter of half a day, have so many contacts that we can do business with.”

The supplier network is a crucial element of producing products in the Pearl River Delta, which encompasses Hong Kong and much of the densely populated area in Southeastern China where the rivers Xi Jiang, Bei Jiang and Dong Jiang converge. It’s this network that Professor K.B. Chan, chairman of HKTDC’s Electronics/Electrical Appliances Advisory Committee, sees as the reason China has emerged as what he calls “the manufacturer of the world” over the past 30 years.

“There’s this huge cluster of electronics companies [for] the supply chain in Southern China—and it’s just across the border, one and a half hours,” he says. “It’s a huge manufacturing base with 10,000 workers, over 2,000 factories, so it’s extremely convenient.”

Convenience is an enticing proposition when you consider that a complex electronic device can routinely have 500 components from as many suppliers. “It’s a hell of a mess to organize 500 different components coming from all over the world,” says Chan. “It’s a nightmare in logistics.”

U.S. VS THE WORLD

Here’s a low number: 0.307 percent.

That’s the percentage of U.S. exhibitors at the Spring edition of Hong Kong’s Electronics Fair and ICT Expo. Out of 3,250 exhibiting companies, just 10 were from the United States.

Ready for more? Of the thousands—if not tens of thousands—of components that came together to form the hundreds of complicated electronics products manufactured and marketed by these 10 U.S. companies, just one lonely component was made in the USA: the highly secretive LCD screen manufactured by Improv Electronics in Kent, Ohio.

Does this mean you should pick up sticks and move manufacturing to China? Hardly. The question is: Why aren’t more U.S. manufacturers better utilizing what nearly every one in the area refers to as “The Hong Kong Platform?”

This was the question buzzing around the brains of the folks at HKTDC. Then, in 2010, President Obama announced his National Export Initiative (NEI), aiming to double exports within five years. HKTDC didn’t just roll out the welcome mat; they practically carried U.S. companies over by creating the Pacific Bridge Initiative (PBI). The program’s purpose, says the agency, is to encourage “U.S. companies to make use of the Hong Kong platform when exporting to Asia, particularly the Chinese mainland.”

Raymond Yip, HKTDC’s assistant executive director, says the time has come for Hong Kong to turn some attention from emerging markets and revisit its mature ones. “At the end of the day, the U.S. is still our second-biggest trading partner and second-biggest export market, after China,” he says. “A lot of what we sell to China is raw materials, but what we sell to [the U.S.] are real exports—we’re talking about $70 billion of financial trade each year.”

Of that $70 billion, the U.S. is importing more than $43 billion and exporting the difference, about $26 billion.

But Yip doesn’t stop there: “In fact,” he says, “if you look at the $26 billion we import from [the U.S.], about $14 billion is actually re-exported to other parts of the world. We only consume about $12 billion locally.”

When HKTDC launched PBI in 2010, that year’s U.S. exports to Hong Kong increased by 26 percent. The next year, they increased by another18 percent. “You know what percent [of increased exports to Hong Kong] you need in order to double your exports in five-years’ time?” Yip asks. “Only 15. If you increase your exports by 15 percent over five-years’ time, because of the compound accumulative effect, you double your exports. And in 2010 and 2011, you increased your exports by 26 and 18 percent, respectively.”

In June, HKTDC—self-described as the marketing arm for manufacturers, traders and service providers in Hong Kong—will lead a two-stop event to the United States titled “Think Asia, Think Hong Kong” to encourage an increase in inbound U.S. trade. The territory will be represented by a 100-person delegation of business professionals, service providers and government officials in New York on June 11 and Los Angeles on June 14. “It’s billed as the biggest-ever Hong Kong campaign in the U.S.,” Yip says.

If you’re looking for an indication of whether you’ll find the program useful, consider that its previous stop in London generated an 80 percent jump in inquiries for doing business in Hong Kong. Its Japan tour upped inquiries by 50 percent.

SPRING YOUR BUSINESS FROM THE HONG KONG PLATFORM

The opportunity in Hong Kong reaches far beyond exports, partly because of the environment put in place by the Hong Kong government under China’s famous, “One Country, Two Systems” approach, which offers rule of law, intellectual property protection, duty-free imports (on everything but cigarettes, cars, petrol and alcohol over 30 degrees) and a standardized corporate tax rate of just 16.5 percent on profits only. But Hong Kong has benefits that can’t be legislated.

Yip jokes: “This is something you learn in a MBA course: location, location, location!”

He’s right. Hong Kong can correctly claim to have half the world’s entire population within a five-hour plane ride and the largest market on Earth just across its border. Proximity to consumers has given rise to a thriving port and the busiest cargo airport in the world, Hong Kong International Airport. And it has the service providers to support business—international banks, lawyers, accountants, agents and logistics providers among other professionals. Ninety-three percent of Hong Kong’s GDP is generated by services.

That more of its GDP is not generated by manufacturing is a bit misleading. Three-quarters of Hong Kong is countryside, only 25 percent is urban area and 40 percent of the territory’s 1,100 square kilometers is protected for conservation and recreation— manufacturing space is clearly scarce. Businesses responded with a free-market solution: they outsourced.

“It is not correct to say that Hong Kong has no manufacturing,” Yip says. “Our manufacturing does not take place physically in Hong Kong, because of the high cost of land and labor, but it is still taking place across the border in factories owned by Hong Kong people, where we employ more than our population. We have 7 million people, but we employ 9-10 million people [in China].”

All of this brings us back to the pressing question: Why aren’t more U.S. manufacturers taking advantage of the Hong Kong platform? Perhaps too many are imagining a domestic approach to being a global company. More succinctly: capture the Asian market from Asia.

“We’re not saying to people to emigrate or move,” says Andrew Young, vice president, Marketing & Sales at Hong Kong Science & Technology Parks (HKSTP). “We’re saying you would have your core business where you are.” Under the umbrella of the Hong Kong government’s Innovation and Technology Commission (ITC), which is spearheading the territory’s push to stay on the cutting edge of the world’s electronics innovation, HKSTP provides a host of resources to drive collaboration and research and development. It’s now building Phase III of its campus to add more space for tech companies. It’s first two “phases” have 96.1 percent occupancy; 40 percent of these tenants are foreign-based—15 percent of those companies are from the U.S.

Young says that HKSTP’s strength is as a center for product commercialization, when a company takes its R&D for a product geared toward the Asian market into prototyping. Many companies have “found that here is where they could access customers, but also they could customize their product to suit the local content,” Young says.

“Many startups would retain their affiliation with an institution at their home base—that’s where innovation starts,” he continues. “But we’re saying Hong Kong is the key market development in R&D.”

One U.S. company that suited its product for the nearby Chinese market is One Earth Designs (OED), maker of solar cookers. When founder Caitlin Powers came to China as a scientist in 2007, she learned that half a million Chinese die per year from indoor air pollution generated by the black smoke of fires used for cooking or making tea. Her life-saving solution was to “deliver award-winning clean technologies to rural villagers in China and the nearly 3 billion more people around the world who lack access to clean and affordable energy,” says OED’s Erica Young.

Though its headquarters has shifted to Hong Kong, OED keeps a full-time marketing development manager in Washington, D.C., and sales staff in California and its native Boston, Massachusetts. The company initially came to Hong Kong for its proximity to manufacturing, which helps reduce development costs and speed up time to market. Then it decided to take advantage of HKSTP’s “Incu-tech” program, which provides financial support—including rent, facilities, money for continuing education, marketing and promotions—all of which helps OED be more cost efficient, according to OED’s Young.

The science park’s incubation program, funded by ITC, bespeaks the Hong Kong government’s commitment to being a leader in innovation. It knows it’s not Silicon Valley, but it sees its role as a cradle for the small and midsize tech companies. “We do things where we think we have a place in the world,” says Johann Wong, deputy commissioner at ITC. “We can’t compete with the big guys, we’re not big guys. But even the big guys need the small guys, the medium guys—so we try and say, ‘We could be the medium guys, we could be the smaller guys.’ The smaller guys supply to the medium guys; the medium guys supply to companies like Apple, Intel.” Get all that?

To forward this effort, ITC gives out roughly $1 billion per year through various programs, such as HKSTP’s small business incubators. These programs offer up to HK$645,000 (roughly USD$83,000) in no-stings-attached funding, free rent (usually $2 per square foot) and priority access to its 13 labs, green room and studio at reduced rates.

While many companies will look to manufacture in China, headquartering an Asian operation in Hong Kong guarantees the available business benefits—financing, IP protection, 8,000 lawyers (35 percent of whom practice all sorts of foreign law), low taxes, university support and a transparent and straightforward legal system—all while maintaining proximity to the massive consumer market across the border.

There is but one catch to utilizing the Hong Kong platform for its full potential, including HKSTP’s incubator programs: You must be a Hong Kong company.

Fixing that is easier than you think.

“Setting up a company here takes one hour, one dollar and requires one director,” says Andrew Davis, associate director-general of Invest Hong Kong. “And that director doesn’t even need to live here.” The agency helps foreign companies get set up by offering a range of services, though no monetary or tax incentives.

Instead, InvestHK sees its role as offering addition by subtraction. “We’re not about putting money in. We don’t give grants or any of the incentives, but we try to take costs out by giving useful information, explaining the rules and regulations,” says Davis. A small company looking to locate in Hong Kong could send InvestHK a spreadsheet, for instance, detailing all its cost models, and the agency will formulate a business plan. “That’s a lot of effort you’ve removed from a small company.”

With China being the United States’ biggest export market, there’s no questioning its demand for U.S. products. But how much money are American companies leaving on the table by serving Asian consumers from a distance? Is your global company best served by having a global presence, and does the Hong Kong platform make the most sense for you?

“We want people to use our platform,” says HKTDC’s Raymond Yip. “The ways you can use our platform: You can trade with us, you can sell your products through our Hong Kong platform, of course we welcome people to come and establish a presence here. There are 1,400 U.S. companies in Hong Kong and about 900 are using Hong Kong as a regional headquarters or regional base.”

What do these companies know that others don’t? Those are questions best directed to the speakers at the “Think Asia, Think Hong Kong” symposiums, and you’ll have your chance to ask in June.

Interested in attending? Visit thinkasiathinkhk.com/usa