Finding a niche

Steve Lewis founded Veho three years ago in Eastleigh, Hampshire. After working his way up from the shop floor of an electrical retailer to the central buying office for white and brown goods, he ran his own London-based electrical product replacement company, which he sold to fund Veho.

He says his aim in starting the company was to fill a gap in the market that wasn’t catered for by existing brands.

“In terms of consumer electronics it seemed there was either cheap junk directly imported from China or top-tier brands such as Sony, Toshiba and the like,” Lewis says. “I wanted to bring to market quality gadgets and new technology products without the expensive price tag. We seem to live in an ever-increasing gadgetry world and none of the top brands seem to cater for this.”

Since 2006 the company has grown from four members of staff to 25. With offices in the UK and Hong Kong, Veho also has agents in the US, Taiwan and New Zealand and its products are manufactured in the UK, mainland Europe and Asia.

According to UK sales director Ben Vallance, Veho has been going from strength to strength; year-on-year sales more than tripled in 2009 and the worldwide turnover forecast for this year is £20m.

Although the company’s core client base remains in the UK, where its products are sold through retailers including Amazon and Play.com, it is seeing a growing demand in the US and Asia Pacific.

“We are a young, dynamic and enthusiastic team of people who have a genuine interest in the products we decide to manufacture and bring to the global stage,” Vallance says. “We like to think that we bring something different to the table in terms of the products that make Veho stand apart from other brands. We are focused on developing a strong brand identity and continuing to deliver value for everyone in the channel, as well as consumers, without compromise to product quality, aesthetics and packaging.”

Vallance believes there have been benefits to operating as an independent company during the recession. Waiting for parent company approval can slow down the product development process, and Veho prides itself on creating cutting edge technology.

“We feel the best time to develop new products is in a recession when the rest of the market may postpone product releases,” he says. “Our independence has been part of our success as it has allowed us to identify and target niche products and bring them to market quickly.”

“We are committed to remaining dynamic and agile to cope with all market conditions and perhaps where this year the big guns have found market conditions difficult, we have continued to expand and flourish.”

While rival manufacturers might be looking to maximise their own margins during the poor economic climate, Veho has found that passing the saving further down the line has its benefits.

“We continue to attract distributors and resellers because we can offer margins that are more attractive than the margins on offer from more mainstream brands. Why wouldn’t anyone want to make 40 per cent margin selling a Veho HD camcorder?”

Vallance says. “We bring fresh exciting products to the table and allow resellers to make a decent margin in an ever-shrinking channel.”

“This is what the channel really wants, especially at the moment,” Lewis adds. Another key to Veho’s success has been to offer a diverse selection of products. Initially the company focused on non-mainstream electronics, which are still a valuable part of the business.

“The flagship product that really got Veho going was the film scanner, which gave us the global recognition that allowed us to develop new, more exciting, gadget-type products,” says Vallance. “Our strategy is to bring unique innovative products to market and this generates demand even in tough market conditions, because there is little or no competition. We work hard on marketing and PR to let the consumer know there is a new exciting product out there. This benefits everyone and has driven our business forward.”

As well as niche market devices, which range from the film scanner to USB microscopes and a night vision unit, Veho also makes more mainstream products such as video cameras, memory cards and notebooks.

In the past year the company has launched a number of successful consumer goods, including the Muvi Micro DV Camcorder which, at just 55mm long, is the world’s smallest digital video recorder. It has been the company’s big hit of the year and exceeded their expectations.

“Although we released this product as a consumer action camera we have been pleasantly surprised by the sales in the commercial sector,” Vallance says, adding that the company now intends to cash in on the Muvi’s success by expanding the range to include accessories and limited edition models.

The response from the mainstream media has also been extremely positive, with the Muvi featuring on TV programmes including BBC1’s Click and Five’s Gadget Show as well as in a number of consumer magazines.

The latest addition to the company’s range is the Mimi Three PC entertainment console, which as well as working like a traditional PC, is portable and can also be connected to a TV and used as a Blu-ray player.

“We have developed a sleek, wall-mounted PC that has both consumer and commercial viable markets,” Vallance says. “We showcased the Mimi at this year’s NEC Gadget Show exhibition and the feedback was very positive.”

Although the company’s recent success has shown that Veho is capable of competing with older, more established brands, Vallance believes it occupies its own space in the electronics market.

“We are relatively unique in our product range so it difficult to aspire to being the next Samsung or Toshiba, but our ultimate goal is to be recognised as a household name in consumer electronics and gadgets worldwide,” he says.