After four decades as a manufacturing powerhouse – making goods for Western markets and dominating the computer sector – Taiwan is trying to transition into an economy based on services and its own brands.
A Canadian duo based in Taipei has created a thriving business out of the macro-economic shift. Affinity Asia specializes in branding and marketing, mostly helping industries in Taiwan, but also assisting Western companies looking to move into Asia.
Affinity founder Richard deVries, who was born and raised in Elliot Lake, Ont., and CEO Michael Kovalio, a native of Ottawa, met as MBA students at the elite National Chengchi University in Taiwan. Affinity was born in 2008, jointly owned by Mr. DeVries and Mr. Kovalio.
"We were the only Canadians in the program and we realized that we were thinking in the same direction about Taiwan and its needs," says Mr. Kovalio, who graduated with an MBA in 2009. "After 40 years in manufacturing, most Taiwanese companies believe that if they make good-quality products at low prices, people will buy."
That might have worked when companies were making goods for established brands, but it's a problem if they're trying to create their own world-class names, Mr. Kovalio says. "There is a communication problem. Taiwanese companies are good at producing quality products but not at representing themselves internationally."
Enter Affinity, which also does work for the government. The company has quickly made a name for itself with its "globally minded" strategic thinking and it is keen to hire more employees this year to supplement its 15-person team.
Affinity has found it effective to get customers of clients to speak on behalf of the products at international events and trade fairs. HEC, a leading Taiwan kitchen goods and housewares maker, experienced a sales increase of 500 per cent after one such initiative.
Mr. Kovalio, a board member of the local Canadian Chamber of Commerce, arrived in Taiwan in 2003. A 2001 sociology graduate of Carleton University, he moved to Asia because he believed the region "is the place to be for the next 10 to 20 years and Taiwan is the perfect spot – it is traditional but modern."
In his time in Taiwan he has seen how difficult change has been for its economy. "Taiwan has so much competition from the rest of Asia: China, Malaysia, Vietnam. Prices are being driven down and Taiwan can't compete any more by doing OEM (equipment manufacturing)," Mr. Kovalio says.
"Canadians talk quite a bit about doing business in Asia, but in Taiwan we don't see as many Canadian businesses as we would like. But now with this shift from West to East in consumer demand, I think Canadian companies are starting to realize the need. We have had a lot of interest from Canadian companies who want to know how to design their products and services for Asian market and how to access distribution channels."
Affinity's CEO, who is married to a Taiwanese woman with whom he has a two-and-a-half-year-old son, points out that a lot of his friends say the next business place to be is an up-and-comer like Vietnam. "Maybe the next place to be is in Canada, the perfect spot to access North America," he quips.
Mr. Kovalio still owns a house in Ottawa.
Special to the Globe and Mail
Alexandra A. Seno has written about economics and business trends in Asia since 1994. She is a regular contributor to Newsweek, the International Herald Tribune and The Wall Street Journal Asia. She lives in Hong Kong.
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