Hong Kong is no longer a manufacturing base for Japanese watchmaking giant Seiko, nor is it one of the company's major retail markets - yet Seiko Instruments (HK) Ltd (SIH) plays an absolutely pivotal role in the group's worldwide operations.

Besides having responsibility for sales and marketing throughout Hong Kong and China, the 250 staff at SIH's Kwai Fong offices oversee a complex import and export operation.

"More than 80 percent of SIH's global manufacturing is carried out just over the mainland border at our two factories in Shenzhen and Guangzhou," explains shipping supervisor Mable Ha, "and the products we make there are exported to the US, Canada, Europe and Japan itself - in fact, all over the world. Nowadays not only the assembly of the watches but also the inspection and packing are done in China; but almost everything made there is still exported through Hong Kong."

And that's only half the story, as most of the component parts are also imported into the PRC via Hong Kong. They arrive daily from Japan, Singapore, Taiwan and Thailand, mostly by air as watch parts tend to be small, valuable and time-critical in every sense of the word.

"It would certainly be possible for some of these shipments to go directly to or from the mainland," Miss Ha agreed, "but our management in Japan like to handle all the imports and exports via Hong Kong because they feel it's the most efficient and reliable way of doing it." A key part of the Hong Kong advantage is the minimal trade documentation required for importing and exporting through Hong Kong and increasingly, the opportunity to process transactions electronically.

SIH, who also manufacture digital metronomes, transceivers and other small electronic devices in southern China, were one of the earliest users of the Hong Kong Government's diskette submission scheme for import and export declarations, and were quick to upgrade further to direct electronic submission when Tradelink introduced its ValuNet service in early 1997.

"Typically we're lodging between 1,000 and 1,500 declarations a month," says Miss Ha, "and it can be much more than that in the busiest periods leading up to Christmas, when there is heavy demand from North America and Europe, and Lunar New Year, when the Japanese market is at a peak. So it makes a big difference for us being able to handle the declarations electronically, and not be restricted by the opening hours of Government offices."

Evidence of this difference can be found in the fact that only three people are now needed to handle all SIH's shipping documentation: Miss Ha and two other staff. Previously there were up to five, although the shipping department has always kept a tight ship, as it were.

"In the early days we had a few problems using Tradelink's service, but the system seems to be working much more efficiently now," Miss Ha says, "and we find the sales and service team are very helpful. Fortunately, she notes, SIH has not been affected as badly as some others by the Asian economic downturn, as sales have remained brisk in North America and Europe, and Seiko products are not just targetted at the top end of the market.

"However, like many other companies we're still under constant pressure to find ways of keeping down costs and improving our efficiency. Electronic commerce is a good way of doing that, and it's definitely the way more and more business will be done in the future." In that respect, at least, it seems that this famous watchmaking company is already ahead of its time.