Zuru Group’s Nick Mowbray, a co-chief executive with his brother Mat, is quite candid: “We were terrible for the first seven or eight years. It was slow and tough going but we had no choice but to keep ploughing forward.”
After automating their production systems to improve operating efficiency, building creative and talented teams, and creating key retailing contacts through international toy fairs, the Waikato born-and-bred siblings Mat, Nick and Anna Mowbray clicked into gear.
“Mat was very engineering and factory-focused, Anna made sure we were executing the operations and building the teams, and I was out there selling, hustling and marketing,” said Nick.
“When we were young, we were fighting for survival but we were highly competitive and just wanted to win. We never borrowed a cent and built the business organically. Once we got momentum and taught ourselves how to scale up, the improvement compounded faster each year. We had a combination [of skills] that worked well.”
There is a fourth Mowbray sibling – the eldest, Andrew, who founded his own business AWOP (Another Way of Paying) which provides a radio frequency identification cashless payment system for events and festivals in New Zealand.
AWOP is based at the historic Matangi dairy factory (established in 1885) owned and restored by the Mowbrays' equally entrepreneurial father and consulting engineer Harry, with help from Andrew.
Their mother Linda, a teacher, supported Harry and the children in the business, said Anna. “They were a dynamic duo, so efficient, and mum had a big personality with huge energy. She could achieve three tasks at the same time. We weren’t allowed to use the word ‘can’t’ at home.”
Mat, Nick and Anna headed to Hong Kong to start their toy business after Mat won a school science fair with his patentable miniature hot air balloon, which had a little burner in a can.
Mat and Nick continued making and selling the toys out of a barn in Tokoroa – “we paid the rent by milking the cows and spraying the weeds,” said Nick.
Anna said the science fair win gave Mat the notion that he could innovate. “He is a dynamo, an incredible engineer and he’s a fearless and deep thinker. Mat’s the unsung hero in this whole journey.”
Established in 2003, Zuru – over the past 14 years especially – has grown into a $3 billion (revenue) multinational with 5000 team members, nine production factories, eight centres of excellence (in Auckland, the United States, London, Italy, India and China), and 34 sales offices with interactive showrooms around the world.
Its 19-level, 24,150sq m head office housing 3500 staff is in Shenzhen, China. Zuru has just built a 100,000sq m confectionery factory and is now completing a pet food factory in Thailand, its first factory outside mainland China.
Zuru’s main US office is in Bentonville, Arkansas, where Walmart is headquartered. It has campuses including a 34-room showroom in Los Angeles and another in Minneapolis, and is developing a new 6500sq m centre of excellence in Angel, London to grow European sales.
Zuru has become one of the leading global toy makers and suppliers – No 6 in sales in Canada, No 7 in the US, in the top three in Australia and the top five in Britain, though it went to No 3 above the bigger Hasbro for three months.
But Zuru now is not just about innovative toys. The global group has three divisions – Zuru Toys, Edge and Tech – and sells its products in more than 120 countries through clients such as Walmart, Amazon, Target, Costco, Tesco, Kmart and Coles. Zuru Toys became known for products like Robo Fish (the world’s fastest-selling toy in 2013), Bunch O Balloons, XShot, Rainbocorns, Mini Brands, Smashers, Max Build and others. It makes and supplies 58 million XShot darts and water blasters a year.
Edge started six years ago and focuses on fast-moving consumer goods (FMCG) in six categories: Baby care, with nappies Millie Moon (exclusive for Target) and Rascals (Walmart’s fastest-growing brand); personal care including Monday Haircare and Osana Naturals; pet care with Bonkers and Nood petfood; health and wellness with Habit supplements; homecare with One laundry drops and the Zorb sweeper; and confectionery with Gumi Yum Surprise. With sales of 2.5 billion nappies, worth $600 million over three years, Millie Moon has become Target’s No 2 brand and has taken 14% market share.
The Tech division, in its development stage, is planning an assault on the traditional building industry with an automated building information modelling (BIM) system.
Combining software – Zuru’s BIM version is called DreamCatcher – with robotics, the Tech division will automate the design, engineering and construction of affordable new homes. Zuru is already establishing a 10ha factory in Shenzhen to produce the houses. “It will be a fully automated output, meeting every building code and compliance in the world,” said Nick.
“The house will be shifted in parts and assembled on the site at a tenth of today’s construction costs. Our AI personal assistant will create tens of thousands of materials to fully visualise your project.
“We will be testing and selling the houses within the next two years. It will have a dramatic impact on the building industry and make new houses far more affordable,” he said.
The toys division contributes $2b in revenue and Edge $1b with a profit margin of around 30%. “We will increase revenue 25% this year and go again next year and get close to $4b revenue,” said Nick. “We don’t have any revenue goal; we just want to continue getting better. We are just beginning.”
Nick said: “Everyone thought we were crazy going into fast-moving consumer goods (FCMG). We had a strong thesis: Toys were large and when you get to size and scale it gets harder to grow because you are replacing products with new ones.
“We realised the FCMG category was dominated by duopolies, even monopolies. With our data-driven platforms, we can reach the customer more efficiently, develop better products and compete with these guys.”
Nick has different descriptions for the whole business: A robotics and automation company; a reimagination company; a digital company.
“At Zuru we win when we combine innovation and automation with a data-driven approach,” said Nick.
“We reinvent 40% to 50% of our toy products each year.”
Zuru’s fully automated processes mean it can go to market faster and cheaper than many others. The company, for example, can inject a toy or collectible into the 3D-printed Gumi Yum Surprise egg and retail for around US$2.
“We have 500 automation and software engineers in India, China, New Zealand and the US who can automate one new production process per week. We have paid planning, execution and measurement across YouTube, Google’s Display, Search and Shopping, Amazon, Criteo and Citrus Ads.
“We can leverage four billion data points per day to inform product, marketing and commercial strategies,” said Nick.
“There are four million followers on TikTok for our Rascals premium diapers, Bonkers pet snacks and Monday Haircare.”
Nick said the in-house digital data agency and AI-powered product review reports are at the fore of every initiative. Zuru has 12 FMCG brands and 30 in development with 3D and prototyping capabilities.
What the Top 200 judges said:
“The Mowbrays’ grit, tenacity and creativity in challenging the traditional global retailing and production systems has earned Mat (45 years), Anna (41) and Nick (39) recognition as Visionary Leaders in the Deloitte Top 200 awards.”
The judges said it takes a great deal of courage and foresight to leave New Zealand in your 20s, move to China and set about building what will ultimately become a billion-dollar-plus business.
“Two decades on from when Mat and Nick Mowbray first moved to Hong Kong to set up a toy factory – later joined by their sister Anna – and then moving to mainland China, their initial toys business has expanded into what is now the Zuru Group.
“They have sustained their entrepreneurial spirit, which has seen the company expand into new areas utilising China’s scale and technological prowess.”
The judges said it is light years from the siblings’ early days when, armed with a $20,000 loan from their parents, they purchased an injection moulding machine and started making toys in a Guangzhou factory.
“They could not speak the local dialect, subsisted on vegetables and rice – and the occasional McDonald’s – and even slept in the factory while they developed their big sellers like Robo Fish, X-Shot and Bunch O Balloons.
“They adopted an organic growth strategy that has seen the business financed completely internally. The Mowbrays were bold enough to take on global toy giants; form relationships with key retailers like Walmart – which got their product on to key consumer shelves – and along the way become expert in large-scale Chinese manufacturing,” the judges said.
Known for its cutting-edge software and world-leading automation and manufacturing systems, Zuru Group with 5000 team members in more than 30 global locations is perfectly placed to continue building its reputation as one of the fastest-growing and most disruptive companies in the world.
“Such ambition and success take courage, innovation and a lot of hard work, and in the opinion of the judges best exemplifies the visionary leadership of this award.”
As well as the Guangzhou factory, the Mowbrays set up a showroom in Hong Kong. “We wanted to capture all the international buyers coming through,” said Anna Mowbray.
“There were as many lows as highs, but we built credibility with retailers and delivered on our promises. I was obsessed with the details of supply chains, the cost of goods, distribution network and meeting the needs of customers.
“We started applying that and started to see success. We built manufacturing teams and infrastructure, and China became the powerhouse of our business. We were persistent and showed up at toy fairs offering the value they were looking for.
“Nick travelled door to door and worked with retailers about delivering on time and at the right margins. We showed integrity by being the first ones to show up when something didn’t work out.
“Business doesn’t need to be complex but there is a formula.”
Anna said she, Mat and Nick would meet weekly to “throw ideas around, look at the social trends and the new technologies, and figure things out. My office was then the centre of the research and development team (there are now 100 creative team members in Auckland, China and New York).
“Touching and feeling the toys, it was a fun place to play. It was action-packed. Toys are fickle just like the fashion industry and we had to constantly reinvent products every six months.
“The methodology and mindset, we had it down pat in the end and it wasn’t till I came back to New Zealand that I realised we had built something truly exceptional, with the infrastructure that is behind the business.”
After 16 years, Anna cashed up her shareholding and stepped out of that to chase her own business dreams like her older brother Andrew.
“I set a goal when I was 35 to do something different before I was 40. I wanted to stretch my personal growth and development,” she said.
Anna, who has three children, returned to New Zealand in 2020 after experiencing the Covid-19 outbreak and its impact in China. She soon realised New Zealand was not as prepared as it should have been in providing personal protection equipment (PPE) to front-line workers.
She organised a team in China to wait on production floors and buy PPE supplies from manufacturers with cash payments and chartered five planes carrying 160 million pieces of PPE, masks, gloves, medical gowns, face shields and sanitisers.
She has invested and become a director of the Auckland Football Club and the recently opened aluminium can manufacturer Recorp. The purpose-built Recorp factory in Manukau, with Zuru-like automation, can produce 550 million beverage cans annually at 1850 cans a minute.
“We are eliminating single-use plastic bottles and providing an alternative source of canister that can be recycled and is better for the environment. The market in New Zealand is short of 300m cans and [they] are brought in from China or Australia. We are able to fill that deficit and help expand the market,” she said.
At the end of August last year, Anna established Zeil – an interactive job market that she describes as a mixture of Tinder and Instagram. Using artificial intelligence, Zeil matches candidates with jobs – there are now 5000 listed on the platform.
“We are focused on middle management and below and democratising recruitment for everyday Kiwis. We know that the job seeker is looking for a great fit and organisation that caters for their values.
“It’s super-exciting. We’ve come into a monopolised sector that lately has had very limited innovation,” Anna said.
First, it was disrupting the toys and consumer goods market, then recruitment, and coming up is the building industry.
The Mowbrays, now the richest family in New Zealand with an estimated $20 billion fortune, continue to be opportunist and successful.
Said Nick, who was the 2018 New Zealand Entrepreneur of the Year: “We just keep working. I feel more motivated today than I’ve ever felt. We have a bigger purpose through Zuru Tech. I enjoy competing most of all and taking market share like the baby business. It’s fun and it’s worth getting up in the morning.”
Said Anna: “The Visionary Leaders Award is fantastic.
“It celebrates what New Zealanders are great at, innovation, and inspires the next generation to build great products. I feel proud that we have globalised products and taken them to market.”
Nick Mowbray says: “You can settle for not trying to do something extraordinary or you can try and do something that truly changes the world.”
Team members working at Zuru say “you can gain 15 years’ experience in the space of two years”.
Zuru leverages advanced robotics and automation in its production, creating cost-effective manufacturing while maintaining high quality. This technological edge has enabled Zuru to offer competitively priced products in a market dominated by larger, more established brands.
Here’s a selection of Zuru’s call to arms that inspires and motivates Zuru staff each day:
● Good humans only. Getting the right people in the right roles to do great things.
● Collaboration: Team members rather than employees. Leadership is on the dance floor, not the balcony.
● Radical candour or feedback: Debate hard, and contest and stress test ideas, no matter where they come from, to get the best outcomes. We are led by ideas, not by hierarchy.
● Shift of needle: Speed of innovation, less fluff and more doing, never stop hustling and persistence, persistence, persistence. Make sure business is streamlined.
● Compound improvement: Aim for at least 2% improvement each week; set high standards even for small things. Be relentlessly competitive. Complacency is our enemy; we suck now compared with where we will be in the future.
● Over-prepare and win: Look after the micro and the macro will look after itself. Work out how to win the battle before entering the arena. Make 10 fast decisions to get seven right rather than two slow decisions to get both right.
● Be obsessed with developing (product) pipelines. Build a muscle of innovation.
The Visionary Leader Award is sponsored by Hobson Leavy.
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