Logitech, the globally renowned brand in computer peripherals originated from Switzerland, has been actively expanding its presence in Taiwan, extending beyond its IT-centric image and delving into the realm of everyday life. In May 2023, Logitech took a further step by establishing the world’s first Logitech for Business Showroom in Taiwan, with the objective of providing enhanced office experiences to a broader range of businesses. This strategic move represents a significant elevation of Logitech’s brand influence. In this interview, Vince Huang, General Manager of HH Galaxy, engages Aries Sze, Country Manager HK & TW of Logitech, to gain deeper insights into Logitech’s brand management strategies in Taiwan.

Vince: “Aries, you mentioned that you hypothetically fire yourself every year. I’m curious, what’s the mindset behind this practice?”

Aries: “This concept was proposed by our global CEO, Bracken Darrell, and I think it’s great. Logitech has experienced rapid growth in the past decade, and our business, sales channels, and products have evolved significantly. By embracing the mindset of starting fresh each year, as if we were new hires, and contemplating how we would tackle challenges, we are able to uncover the captivating and remarkable aspects of Logitech, rather than magnifying shortcomings within the organization. This annual reset enables me to pinpoint areas for personal growth and ongoing improvement.”

Vince: “That’s an excellent concept. Will Logitech incorporate this concept into internal communication and employee management?”

Aries: “Absolutely. We incorporate this mindset into our internal leadership discussions, ensuring that employees understand the value of embracing this approach when facing challenges and seeking opportunities for growth. Effective communication becomes crucial as the business experiences rapid expansion. Business growth is closely tied to personal growth; without individual development, it becomes challenging for the business to thrive. Personally, I always look ahead and assess whether the organization’s growth trajectory aligns with the industry development direction for the next 5-10 years. It’s vital to determine if both my team and I are adequately prepared for what lies ahead.”

Vince: “It sounds very similar to one of the core values of HH Galaxy, the Growth Mindset. I would like to know how you propagate this concept among the entry-level employees.”

Aries: “I believe that having ownership is crucial in fostering a Growth Mindset. Without shouldering responsibility, it’s challenging to develop such a mindset. When team members have well-defined roles and responsibilities, they can identify areas for growth, and it enables us to support their development. Accountability serves as a powerful motivator. Our approach is to empower individuals by granting them authority and responsibility, as it is through this framework that a Growth Mindset can truly flourish.

Logitech’s work culture sets it apart from conventional foreign companies, as we prioritize more than just execution. Over the past decade, we have fostered an environment of internal entrepreneurship, enabling each country to redefine its unique identity within the parameters of our brand image. This may involve localized development, sharing successful case studies, and subsequently applying them to other global regions, creating a dynamic exchange of ideas and strategies.”

Vince: “I rarely see such examples in large global organizations. It resembles more of a tech or startup company.”

Aries: “Exactly. For example, in the past few years, we focused our resources on esports in Taiwan and Hong Kong, while allocating fewer resources to office supplies. This wouldn’t be possible in other companies due to the different business units. However, Logitech trusts the expertise of local managers. As long as it fits within a balanced P&L scope, we’re willing to try new things. Our expansion of stores in Taiwan, collaboration with esports associations in Hong Kong, and the establishment of the Logitech for Business Showroom in Taiwan are all examples of our ventures. This is why I fear boredom, but I can happily work at Logitech for ten years! While our sales used to rely on physical channels, we’ve now embraced a dual focus on retail and e-commerce. Looking ahead, we aim to become an integrated hardware and software service provider, collaborating with more businesses and channel partners.”

Vince: “I can personally relate to that. HH Galaxy serves many international brand clients, but our partnership with Logitech is different. It’s not just a simple client-vendor relationship; it feels more like a true partnership. We collaborate on how to do together, evaluate each other’s capabilities and resources, and tackle market challenges as a team. I’ve learned a lot from this kind of collaboration.”

Aries: “Logitech doesn’t encourage unethical means to achieve business goals. We believe in collaboration and equality. When I first entered the market, I noticed that our approach was often too submissive, as if we were begging retailers to place orders. But it shouldn’t be that way. We should think about how to help our channels improve their performance through initiatives like advertising, new product launches, and integrating online and offline experiences. These efforts help us establish mutually beneficial relationships with our retail partners. Despite having a market share of over 70% in the computer peripherals market, Logitech doesn’t let that go to our heads. We continue to approach our partners with equality and fairness.”

Vince: “Another example that showcases Logitech’s strong Growth Mindset DNA is its recent shift from a consumer focus to the enterprise market, which has resulted in significant breakthroughs. How did you identify this business opportunity?”

Aries: “Actually, even before the pandemic, Logitech had already started incorporating video conferencing features into its products. The company recognized the potential of the B2B market, but it was during the pandemic that the opportunity truly exploded.In the past, our focus was primarily on the B2C market, and the idea of targeting the B2B market was not actively pursued.

However, as I delved deeper into the dynamics of the market, I realized that the issue lay not with the market itself, but with our own perspective. Coming from a consumer-oriented background, I took it upon myself to study and build a strong B2B business model. I discovered that Taiwan and Hong Kong alone have over two million small and medium-sized enterprises. If we could successfully cater to their business conferencing needs, the revenue potential would be significant.

Finding the right balance between the C and B markets is a crucial responsibility for business leaders. By capturing opportunities in both segments, we can achieve a more robust and sustainable operational structure.”

Vince: “Let’s discuss Logitech’s approach to e-commerce, which I find to be quite innovative. What role does e-commerce play in the overall strategy?”

Aries: “We may not be leading the pack, but we are eager to learn and experiment. We’ve gained many insights from collaborating with HH Galaxy, and it has been a mutually beneficial partnership.

Logitech’s products demand a hands-on experience for consumers to truly appreciate them. The distinction between a mouse priced at NTD 199 and another at NTD 3,999 lies in the tangible touch and feel.

Initially, our e-commerce approach was focused on price competition, and we faced objections from our channel partners. However, one of our salespeople noticed that when we offered online promotions for Product A, offline inquiries for the same product also increased. This led me to realize that our online and offline product strategies should align, as consumers were often left confused by the disparity. So, we made the decision to synchronize our online and offline strategies, resulting in an immediate improvement in offline conversion rates. We also recognized that e-commerce is not just a sales channel but an avenue for creating awareness, exposure, and activation. The integration of online and offline is the best approach for our brand, consumers, and channel partners in this market.”

Vince: “It seems like Logitech is strategically focusing on the entire consumer shopping journey. Is that correct?”

Aries: “Yes, indeed. In Hong Kong, we offer a unique online purchasing experience combined with offline pickup services, which has contributed to 20% of our online revenue. Moreover, we have taken steps to make the Logitech brand more relatable to consumers’ daily lives. We have established our presence in department stores and outlets, where our focus is not solely on communicating product specifications and prices, but rather on conveying the concepts of a high-quality lifestyle, environmental sustainability, and promoting health-conscious office supplies. This strategic shift has resulted in an increase in average customer spending.

We strongly believe that online and offline channels should not be seen as competing entities, but rather as mutually reinforcing components. Each channel offers unique advantages. Offline channels provide customers with a tactile and immersive experience, while online channels enable us to create multiple touchpoints and engage with a wider audience. Building on this perspective, we have transformed our physical stores, moving away from a cluttered display of products to creating experiential environments. As a result, our retail channels have seen a remarkable 30% increase in average customer spending. This approach was initially met with skepticism from channels, but as Logitech successfully implemented it, other brands have started to adopt similar strategies. We are thrilled with this development because our goal is to grow together with our channel partners.

In my opinion, the true growth of the Logitech brand doesn’t come from snatching market share from competitors; it comes from collaborating with our channel partners to create greater value for consumers and enterprise customers.”

HH Galaxy and SJ Conso Inc., with extensive 7-year local expertise, join forces to establish HH Galaxy Philippines. With a focus on international brand product sales, HH Galaxy Philippines aims to capitalize on the booming post-pandemic e-commerce market in the Philippines and expand into the Southeast Asian market.

Seizing the opportunity in the post-pandemic era, the global e-commerce market is poised for growth, and HH Galaxy sets its sights on the Philippines. With plans to establish HH Galaxy Philippines in the second half of 2023, the company will leverage the 7-year local expertise of its partner, SJ Conso Inc. By adopting a localized business approach, HH Galaxy Philippines aims to introduce international brands into the Philippine market. Jimmy Yeh, General Manager of HH Galaxy Philippines and head of SJ Conso Inc., emphasizes their commitment to hiring local talents, as they serve as the vital link between the company and the local market, enabling them to quickly grasp market trends.

Unleashing the Power of the Philippine E-commerce Sector

Expanding into the international market is a crucial strategic move for businesses to broaden their market reach. “But first, we need to ask ourselves, why the Philippines?” Jimmy expressed. Before venturing into the Philippine market, HH Galaxy had already conducted extensive market research, comparing the current state of various Southeast Asian countries. They comprehensively analyzed population dividends, smartphone penetration rates, internet usage, e-commerce market trends, and potential. Among these countries, the Philippines emerged as an unmissable new frontier.

First and foremost, with a population of over 100 million people, the Philippines ranks second only to Indonesia in Southeast Asia. The average age is approximately 26, indicating a predominantly youthful population that drives a substantial domestic consumption market. Furthermore, Filipinos generally exhibit a high level of receptiveness to new innovations. “This aligns perfectly with HH Galaxy’s goal and strategy of introducing international brands to the Philippines,” Jimmy emphasized.

Furthermore, the internet penetration rate in the Philippines is high, with nearly 80% of the population having internet usage habits. The number of smartphone users is also substantial, reaching approximately 90 million. According to statistics from 2022, on average, each person owns about 1.72 smartphones. Jimmy explained, “Having two smartphones and two SIM cards per person is quite normal due to the affordability of intra-network calls.”

In other words, shopping through smartphones on the internet is convenient and easy, and the e-commerce market in the Philippines has been growing year by year. According to a market analysis report published by eMarketer, the e-commerce market in the Philippines generated sales of $28.5 billion in 2022, showing a growth of approximately 30-40% compared to 2021. It is estimated that the market will continue to grow by at least 30% in the whole year of 2023. Therefore, the potential of the e-commerce market in the Philippines should not be underestimated.

Moreover, from a channel perspective, the two major e-commerce platforms in the Philippines are Shopee and Lazada. Jimmy observed through website traffic data from SimilarWeb that currently, Shopee and Lazada account for approximately 80% of the total visits to all e-commerce platforms, with both platforms having an equal share. “In the future, HH Galaxy plans to list our products on both platforms, which would allow us to reach about 90% of consumers. This will significantly boost our market presence,” Jimmy explained.

“We insist on hiring local people because they are our closest connection to the local market, enabling us to quickly grasp market trends.”

– Jimmy Yeh, General Manager of HH Galaxy Philippines

The Swift Growth of E-commerce Platforms

The e-commerce market in the Philippines has experienced rapid growth in recent years and has made significant progress. “Seven years ago, it would take two weeks for a purchased television to arrive, while Taiwan’s PChome was already challenging with 24-hour delivery. It was really unfamiliar,” recalled Jimmy. However, now, in the Greater Manila area, delivery takes only three days. “The global pandemic has catalyzed the development of e-commerce in the Philippines. When online shopping became the only sales channel, platforms had to find ways to increase their logistics capacity to cope with the surge in orders during the pandemic.”

Despite entering the post-pandemic era, e-commerce sales have not returned to their original state but have gradually grown in line with the habits of Filipino consumers. “This is a significant opportunity, but it still requires effort to seize,” said Jimmy. It is not only important to be familiar with local consumer preferences and introduce products that meet market demand but also crucial to address payment and logistics aspects. “Because the key to the e-commerce market lies in both payment and logistics. Both are indispensable.”

Although Shopee and Lazada have the highest website traffic among e-commerce platforms in the Philippines, the overall market remains highly competitive, with many other platforms eyeing their positions. Jimmy observed and analyzed, “It is precisely because of this competition that e-commerce platforms are putting more effort into solving payment and logistics issues, making payment more secure and convenient, and improving the speed and convenience of logistics.”

Perfect timing for HH Galaxy to enter the Philippine market

“Now is the perfect time for HH Galaxy to enter the Philippine market!” Jimmy emphasized that the e-commerce platforms in the Philippines have gradually improved their logistics and payment systems, and consumers have become accustomed to using online channels. Therefore, HH Galaxy can leverage its advantages in the Taiwanese e-commerce market and its understanding of brand requirements to gradually introduce international brands into the Philippine market through online channels.

In addition, HH Galaxy Philippines can benefit from the mature software technology, operational experience and logistics of HH Galaxy in Taiwan, combined with the 7-year experience of SJ Conso Inc. in the Philippines. This will provide HH Galaxy Philippines with a solid foundation in e-commerce operations from the beginning. Jimmy stated, “HH Galaxy focuses on selling products and bridging the last mile between brands and consumers. With our sales capabilities, we will establish a strong presence in the Philippines.”

HH Galaxy Philippines is currently poised for launch and is expected to be officially established in the second half of this year. Jimmy has set a goal: “The international brand sales market in the Philippines is currently in a state of intense competition, with no single company dominating the majority of the market. Therefore, HH Galaxy has unlimited potential in the Philippines, and our goal is to secure the leading position in selling international brand products.”

“When it comes to e-commerce operations, it’s not just about ‘agency outsourcing’ or ‘brand self-operation’!” In recent years, HH Galaxy has introduced the PowerSolution series of tools, offering brand owners a more diverse range of options for e-commerce operations. These tools not only help brands generate revenue but also assist in reducing manpower and improving operational efficiency. How do they achieve this?

Understanding user pain points and offering suitable solutions is the key to success for every company. To achieve this, companies often invest heavily in market research and user interviews. Every company strives to understand what users truly want, putting in maximum effort and exploring various methods. However, HH Galaxy’s unique position in the e-commerce industry allows it to be both a user and a developer of e-commerce tools.

Rising Cost of Traffic: Shifting Focus from Revenue to Data

“We are the Experts in Sales, Data, and Tools!” by Ethan Shaw, Vice President of Operations at HH Galaxy

Established by the largest brand agency in Taiwan, THL (Taiwan HsinLin Enterprises), and HCT Logistics, HH Galaxy is capable of providing services for brands looking to sell through various channels such as official websites, momo, PChome, and Shopee. From product listing and advertising to final product delivery, HH Galaxy covers the entire process.

Since 2013, HH Galaxy has accumulated a portfolio of hundreds of domestic and international brand clients, including New Balance, PANDORA, L’Oréal, Kao, and Johnson & Johnson etc.

Three years ago, HH Galaxy entered the SaaS market, starting with advertising tools and gradually expanding its services to include customer data analysis. The latest addition to its offerings is the newly launched order and warehouse management system called PowerOrder.

Ethan Shaw pointed out that in the past, e-commerce was just one of the many channels for brand owners, and many of them chose to outsource their e-commerce operations to e-commerce service providers. However, in recent years, brands have started to view e-commerce as a crucial channel for collecting consumer data and understanding the market.

This has put many brand owners who previously relied on e-commerce service providers in a dilemma: should they continue to prioritize efficiency and maintain their collaboration with e-commerce service providers, or should they invest significant resources in reclaiming their e-commerce operations to gain access to customer data?

However, from HH Galaxy’s perspective, it’s not a binary choice. Ethan said that the PowerSolution tools were developed to allow brand owners not only to continue entrusting their operations to HH Galaxy but also to leverage the data collected through these systems to provide more customer insights to the brand owners.

For HH Galaxy, entering the SaaS market not only helps its brand clients gain more data and improve their performance but also allows HH Galaxy to expand its customer base from large enterprises to small and medium-sized enterprises, bringing a new wave of growth to its operations.

Data Analysis with Precision Advertising, PowerSolution Boosts ROI up to 50%”

“The PowerSolution tools were developed to allow us to leverage the data collected through systems to provide more customer insights to the brands.” by Ethan Shaw

HH Galaxy’s SaaS e-commerce operation tool, PowerSolution, currently includes the following product offerings: PowerCDP for customer data analysis, PowerAI for advertising placement, and PowerOrder for orders management. 

Firstly, let’s talk about PowerCDP. As the pandemic-driven e-commerce boom gradually subsides, many e-commerce brands are facing slower growth and increased sales and acquisition costs due to inflation. Therefore, leveraging the accumulated customer data from previous years for precise marketing has become a major focus for brand owners.

That’s why HH Galaxy’s PowerCDP tool not only includes a self-developed customer data platform specifically for Shopee, but also actively collaborates with AI consultancy data platform company beBit to provide cross-platform data integration, automated customer segmentation, and marketing campaign automation features.

Ethan pointed out that through actual testing, the use of PowerCDP to analyze customer data combined with PowerAI resulted in an average increase in advertising return on investment of two to three times, and sometimes even up to five times higher compared to before.

He provided an example where it was commonly believed that customers who purchased clearance or short-lived products were unlikely to become repeat customers, and brand owners were concerned that the popularity of such products would affect the prices of regular products. However, HH Galaxy’s data analysis revealed that customers who purchased short-lived products not only had a high probability of becoming repeat customers but also had a higher average customer lifetime value than typical customers.

This discovery led HH Galaxy to encourage brand owners to promote short-lived products more boldly, attract new customers, and develop new combinations of short-lived products with regular products to increase the average order value. Recently, this approach generated nearly $300,000 additional revenue for a brand in just one sales period.

Another showcase involves a diaper brand. In the past, the brand believed that customers who purchased size S diapers would naturally purchasing size M or L diapers as their children grew, so the advertising focus was on converting customers to buy larger sizes. However, data indicated that as much as 80% of diaper customers were one-time purchasers. This led HH Galaxy to shift their advertising target towards increasing the average order value instead of converting customers to larger-sized products.

Ethan revealed that an international beauty brand has deeply collaborated with HH Galaxy, relying on data interpretation of customer shopping journeys to adjust product sales combinations and pricing strategies.

In terms of advertising, HH Galaxy not only utilizes common advertising platforms such as Google and Facebook but also plans to collaborate with cloud-based invoice and music streaming platforms. This diversifies the types of advertisements and expands the audience reach, ensuring that advertising costs are not completely controlled by major platforms.

From Operations to Tool Development

“We started as a business operator, so we transform the pain points we encounter at work into tools that we provide to our customers, making our services increasingly comprehensive.” by Ethan Shaw

There are similar e-commerce tools available on the market, so why choose HH Galaxy?

Firstly, their solutions are highly practical. “We started as a business operator, which sets us apart from other SaaS service providers,” explained Ethan. These tools are not only sold to customers but also used daily by HH Galaxy’s own operational teams. “We transform the pain points we encounter at work into tools that we provide to our customers, making our services increasingly comprehensive.”

The second major advantage of HH Galaxy is comprehensive data. In the past, data of customer behavior, e-commerce advertising and sales performance were scattered across different systems, making it difficult to compare them simultaneously. However, with HH Galaxy’s PowerSolution, real-time advertising ROI, sales performance, and customer behavior data are integrated and directly compared on the same platform, helping brands improve the efficiency and accuracy of their advertising strategies.

Many different tools are available, what truly sets a brand apart is understanding customers, mastering operational processes, and implementing precise sales strategies. All of these aspects come from accumulated experience and continuous optimization, which is the core value of HH Galaxy.

“In the past, it may have been a binary choice between self-operation and outsourcing, but now businesses can take control of their operations and strategies while leaving the work of developing supportive tools to HH Galaxy,” emphasized Ethan.

The new round of e-commerce competition has already begun, and the winners will be those who can effectively utilize digital tools to enhance operational efficiency and gain insights into consumer behavior!