THE GREY MAN; We can't reveal his name but, like Harry Lime in the

Sunday Herald, The, Sep 5, 2004 by Iain S Bruce

The rattle and clatter of downtown Seoul seemed a million miles from his native Glasgow, but Harry Green recognised a good deal when he smelt one. He knew full well that the fact he was operating solo, disorientated and unable to speak a word of the lingo made him prime patsy material, but risks are worth taking when the opportunity is solid gold.

At the prices quoted by the smiling factory boss sitting opposite, all he had to do was play his cards right and he'd be heading back to a red-hot market with a container load of VCRs and a profit margin beyond his wildest dreams.

It was the mid-1980s, and that first deal marked the beginning of a career on the shadowy edges of international trade. Success as a high-tech manufacturing centre for companies like Sony, Sanyo and Fujitsu, had given a welter of Korean entrepreneurs plenty of assimilated know-how and rock-bottom overheads, but their inexperience of global commerce created a golden opportunity for Green. Travelling east as an unusually speculative market stallholder in search of cheap wholesale deals, he returned to a Scotland gripped by the electronics boom with a line in unbranded video recorders priced well below the high street norm.

"I didn't know it at the time, but I was witnessing the beginning of a commercial revolution. Up till then electrical items had always been luxury goods that everybody wanted but most couldn't afford," says Green.

"Prices were kept high because the market was dominated by a handful of major manufacturers, but then suddenly businessmen like myself started shipping goods over that didn't cost a couple of month's wages and the whole picture changed.

"Twenty years ago it seemed impossible, but today people are popping down to the supermarket for cornflakes and coming back with home cinema systems that cost less than a pair of shoes."

Now moving out of the imports market to hunt down opportunities new, Green has witnessed a sea change in the way the world does business but believes he has ridden the curve as far as a small operator can go. It's something consumers can't see, but the (pounds) 39.99 DVD systems now piled high on the shelves of supermarkets such as Asda represent the sharp end of technology's advance and hard evidence of a shrinking world.

Trading in the legal but fringe areas of the economy, the profits from his Korean venture were the fruits of being ahead of the curve. Whether lucky or astute, he arrived in Seoul at a point when a generation of entrepreneurs had realised there were alternatives to subcontracting for Western corporations but had yet learned how to do business overseas. A success due to his willingness to go that extra mile, his first shipment of VCRs was a batch made using the same parts, premises and people responsible for making the products of some major household names.

For two decades Green has turned a respectable profit serving as an international middleman connecting factories that didn't know how to export with consumers unaware of what luxury gadgets really cost.

Shipping in no-brand televisions, DVD players and stereo systems cheap enough to command demand, he has essentially made his living by slipping into the gap between the old and new worlds. Everything must end however, and now he feels that his has come.

"Nowadays Korean industry is extremely sophisticated, while even so-called new boys like China are pretty savvy about international trade. There are less and less barriers to selling anywhere in the world and neither the manufacturers nor the markets see electrical goods as luxuries," he says.

"They're perceived as a low-profit, high-turnover deal in a business packed with suppliers and you need to think mass market to make it worthwhile because the margins are getting tighter."

Profits have become very tight indeed. According to market analsyts IDC, the average cost of producing a DVD player in China stood at (pounds) 22.20, including operating costs, in the first half of 2004. Given that these brands - including Apex, Pacific and Mintek - sell in outlets such as Argos and Asda for as little as (pounds) 29.99, UK margins after overheads might be greater than the dollar earned on each machine by US stores but are nothing to write home about.

For the retail sector, in fact, the attraction of DVD players is not to be found in the machines themselves. Perilously close to becoming loss-leaders, their primary function is as a conduit facilitating sales of related items and peripherals such as blank discs, pre-recorded movies, spare cables and sundry accessories ranging from protective carry bags to cleaning products.

Already tough, the business is only going to get tighter. In the same six-month period this year, China manufactured 41 million DVD players on outsourced orders from a variety of firms such as Sony, Philips, and Panasonic, brands which are still considered valuable enough to sustain a minimum price tag of around (pounds) 79.99, but which many insiders believe will have to respond to the challenge mounted by the 110 million units the People's Republic intends to export in 2004.