Export story: Naim Audio

Why finding the right distribution channel is vital

Award-winning Naim Audio exports to 40 countries worldwide. Managing director Paul Stephenson explains why finding the right distribution channel is vital

British manufacturers are going to drive the UK economy back into the black, according to the coalition government. By continually growing its overseas trade, Naim Audio, a manufacturer and distributor of high-tech audio equipment, is setting an example.

The business was launched in 1969 under the name Naim Audio Visual by founder Julian Vereker, a self-taught designer of hi-fi audio equipment and ex-mini racer. Recently winning The Queen’s Award for Enterprise 2010, Naim Audio proves to be a lasting legacy to Vereker, who died in 2000.

Today, the business remains privately owned with a strong reputation built on quality, according to managing director Stephenson. “Our products are built to last in line with our green ethos, and we are still servicing equipment that is 30 years old,” he says.

Naim Audio works in partnership with Bentley to create high-end audio equipment for its vehicles. “Within our genre, we are very well known and have a good global reputation, as we offer full solutions,” says Stephenson.

The business began exporting after receiving enquiries from overseas buyers interested in the brand. This demand led Naim Audio to market across Europe and Asia, attending consumer-led electronics shows. “We went on various UK overseas trade missions that supported British companies and received some government help for attending places such as Berlin, Las Vegas and Tokyo to showcase our products and interview potential distributors,” explains Stephenson.

“This has built up over the years and that particular route of going out there and getting the distribution deals has worked well. We continue to work in that marketplace.

“You’ve got to be out there doing it,” he adds. “You won’t stand a chance if you sit back and wait for people to knock on your door. You’ve got to play an active part.”

One of the biggest hurdles for Naim Audio, says Stephenson, has been finding the right distribution channel, particularly in countries where more than one language is spoken, such as in China and Russia. “The Chinese market was extremely difficult to understand, particularly learning how people do business,” he explains. “In Europe and North America trading is easy as how we do business in terms of the relations, safety standards and language is more similar. In China it varies between regions.

“Just as when we first entered Russia, we didn’t really understand the mechanics of how business is done there, we didn’t know things like how money transfers are carried out. When we first began dealing with Russian retailers, it was very difficult to understand why payments were taking so long.”

The company, which turned over nearly £14m last year – up 23% on 2008 – has projected a further rise to £15.5m for 2010.

Helped by the fact that British manufacturing brands are becoming increasingly popular with overseas markets, Naim Audio has boosted international sales. Now, 60% of its business comes from exports, and China has become its second largest foreign market in just five years.

“We are right at the leading edge of audio technology and as a lot of national products are bulk-produced in China, buying a European product has become really important for what it stands for in terms of quality,” says Stephenson. “The Chinese would really like us to put a Union Jack sticker on the boxes. British manufacturing is seen to offer engineering process and class.”

With an ambition of continuing growth overseas, Naim Audio is looking to find the right distribution channels for South America and India. “Although China has been difficult to crack, it is very well organised, whereas you can imagine India being far more fragmented and disorganised,” says Stephenson. “However, it is booming and getting the right distribution there will be one of our biggest challenges over the next three years, as we look to find the right partner and trade carriers.”


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