From processing raw wood to teaching music, Hong Kong-based Parsons
uses extreme vertical integration to promote music participation
When a consumer buys a musical instrument at retail, it’s the very last in a chain of events spanning months or years. Raw materials had to be sourced and manufactured into finished goods, which were then shuttled through miles of distribution channels before they reached their destination. Music industry pros know all this, but few are as deeply embedded in every step of the process as Parsons Music of Hong Kong and China. As owner of a major piano manufacturing operation, Parsons also owns, at one end, the forest where wood for its instruments is harvested, and at the other end, a chain of nearly 100 retail stores throughout mainland China and Hong Kong. In addition, the company has now established more than 80 music schools in the same geographic area, an effort the Parsons team views as key to the future of music making and music commerce in China.
“A lasting brand begins with a concrete fundamental mission, one that can never be compromised,” said Arling Ng, who heads up Parsons Music with her brother and co-CEO Terence Ng. “Our ultimate mission is to popularize music culture and nurture musical talent. On the manufacturing side, we have only one priority on our list: quality. Only with quality will we withstand changes in the market.”
Founded in 1986, Parsons Music is now the largest music retailer in China and the eighth-largest in the world. Terence and Arling Ng’s first location, however, was nothing more than a 300-square-foot lesson studio in Hong Kong. The founders set up their first retail store in the late ’80s, and by the early ’90s had six locations. With the seventh, the company had its breakthrough, setting up shop in Hong Kong’s Times Square, the island’s most popular retail district. Today, the Times Square store occupies two floors and 20,000 square feet. Already established in mainland China, Parsons expanded with the reunification of Hong Kong and China in 1997, bringing an array of previously unavailable foreign-made music products into the nation. In the same year, Parsons entered the manufacturing sector, consulting and collaborating with piano makers from Asia, Europe, and North America to form an elaborate operation of its own.
In the 27 years since its founding, Parsons has tapped into seismic cultural shifts in China: broader freedoms, a better-educated populace, and a growing middle class. As interest rose in not just music products but high-quality music products, Parsons met demand with modern-format retail stores stocking varied name-brand goods. “It’s very important for us to offer good brands and products to give customers the choices they want,” says Ng, “and it’s crucial that we constantly analyze the market to maintain the perfect product mix.” Parsons now has more than 30 locations in Hong Kong and upwards of 60 in China. For the past few years Parsons has displayed its entire retail inventory on the web, a first for Chinese music retail. It also maintains a presence on Facebook and the Chinese-based WeChat social network—now approaching 400 million users. Stores are now equipped with ten-inch tablets so customers and staff can consult the entire “e-catalog” online.
On the manufacturing side, Parsons’ operation comprises eight facilities including its major production base in Hubei and its Qingdao Sejung Guitar Factory—along with a wood processing base, an iron foundry, and a piano factory in Germany. Heavily invested in R&D and quality control, each of the company’s factories has recruited technicians from all over the world. Along with its own retail network, Parsons-made products are also sold through around 500 dealers across mainland China—and exported to 24 foreign countries and regions. “When we talk about creating quality instruments, we start from scratch,” says Ng. “We plant trees in our own forest, handle timber in our own wood processing factories, do our own iron-plating and manufacturing, and present our products in our own retail stores.”
In a recent move, Parsons acquired Wilh. Steinberg, the renowned German piano brand dating back 130 years. “We truly hope to bring the traditional craftsmanship of these pianos to more music lovers,” says Ng. Company-wide, upcoming plans call for increased production of high-end instruments, newly streamlined procedures, and an entry into the electronic music products segment. Within mainland China, the company aims to raise its piano marketshare to 25%. “In the not-too-distant future, we would love to have a Chinese-produced piano, built to the strictest standards of quality, become the finest piano on the stage,” says Ng.
With its population of 1.3 billion and its collective passion for classical music, China is already the largest piano market in the world—and rising standards of affluence and education suggest it will keep expanding. With its 80 music schools serving hundreds of thousands of students, Parsons has only accelerated the trend. “Only by nurturing musical talent can we create more musicians and more demand for music products,” says Ng. “Besides providing the education itself, we’re also providing the quality instruments that make it possible. We’ll remain dedicated to all music lovers and hope to see more and more children grow up with music in their lives.”
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