Among the businesses that have proven most profitable in recent years are these two: selling technology gadgets, and women-oriented products or services. Dyson, the British appliances company, has captured both categories. Founder James Dyson is now the richest person in the United Kingdom after his company posted a record profit last year.
The vacuum giant announced this week that it will relocate its headquarters to Singapore, making it the first major UK firm to move away from Britain in the recent past. The chief executive will also be stationed in Singapore.
Founded in 1993, Dyson has built its reputation as a technology company. It invented the ‘bladeless’ fan, and its vacuum cleaner and hair dryer products have become best-sellers.
Dyson’s latest hair curling tools have become sought-after among women customers. Industry observers say Dyson has successfully opened up a premium home appliance market segment with unique technology and sleek designs, just like Apple did in smartphones, and Tesla in automobiles.
While Chinese-brand fans, vacuum cleaners and hair dryers can be had at a few hundred Hong Kong dollars each, and Japanese brands may cost several hundred to a thousand-plus, products from the British consumer goods company can cost more than HK$4,000 in Hong Kong.
Dyson reported a record annual profit of 1.1 billion pounds and revenue of 4.4 billion pounds for 2018, up 38 percent and 28 percent respectively from the year before. Its founder‘s personal wealth increased to US$13.8 billion from US$10.8 billion, according to the Bloomberg Billionaire Index. That has made him the richest man in the UK.
Meanwhile, Dyson announced the striking news that the firm would move its headquarters to Singapore within this year. What’s interesting is the fact that thes founder had been an outspoken supporter of Brexit, who called on the British government to walk away from the EU even without a deal.
Highly symbolic, his decision to move Dyson’s headquarters to Singapore is likely to make political waves.
However, the company’s chief executive Jim Rowan stressed that the decision had “nothing to do with Brexit” but was about “future-proofing” the business. The Asian market generates over half of Dyson’s revenue, and all of its products are manufactured in the region. Asia market is set to become even more important in future, with growth from China, ASEAN, and India.
Dyson had already shifted the vast majority of its production to Singapore and has announced plans to build a new electric vehicle plant in the city-state. The factory is scheduled for completion in 2020.
Tax rate may be also playing a part in the equation. The corporate tax rate in Singapore is 17 percent, and the local government offers various tax incentives to lure big companies. The legal system of Singapore is based on the English common law system.
And foreign companies are less concerned about the ‘forced technology transfer’ problem, or the impact of the US-China trade war, when it comes to moving factories to the city-state.
Some people have questioned Dyson’s decision, pointing out that Singapore only has a population of 5.6 million, and that the labor cost there is not competitive.
But the fact is, Dyson does not rely heavily on cheap labor as its production lines are highly automated. As for skilled manpower, the company, if needed, can import a large number of scientists and engineers from India, thanks to Singapore’s well-established foreign talent policy.
This article appeared in the Hong Kong Economic Journal on Jan 25
Translation by Julie Zhu
[Chinese version 中文版]
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