Trade Fair Forum:  Preview In Seoul

Korean Fabrics Meet China’s Challenge

By Veronica Zaragovia

Although South Korea boasts better fabric quality than China and lower prices than Japan or Europe, it has lost export capacity to China, which has a bigger chunk of the world market. So long as China offers low prices, cheap labor and fast production, Korea will have to keep innovating multi-functional active wear, like anti-ultraviolet rays and moisture absorbing materials, to keep its edge.

The China Challenge

The strong participation in Preview in Seoul (Sept 3-5) belied the fact that exports of textiles and fabrics from Korea have dropped from $13.4 billion in 2007 to $13.3 in 2008 because of the price difference with China, according to figures from Moon-Chang Choi, general manager of the fashion and exhibition team for the Korea Federation of Textile Industries In 2007, Korea’s market share of the world’s export of textiles was 2.1 percent, down from 6.6 percent in 1990. For all the talk of Korea outpacing China in innovation and quality, China is a viable threat.

Taiwan-based Nuke Chou, a buyer for Idole Trading Co. said Korea’s saving grace is its innovative capacity. China “doesn’t have ideas,” Chou said. “They just follow the rest.” Even though China has a superior silk production, said Tom Dong of China-based Kee Yip Fashion, he comes to South Korea multiple times a year in search of fabrics like jersey for prom dresses. His company could afford the prices because of the American demand for evening gowns. “People say the U.S. economy is bad, but we made the most money from the U.S. market,” Dong said.

Functional Edge

The U.S. is one of the largest clients for many Korean companies. To survive the competition, Seoul-based Eco-Cube “needs to find different techniques from other companies and also match buyers’ needs,” said its general manager, S.H. Kim. The company’s Texrevo line caters to outdoor needs with heating and cooling properties. Its summer line has German peppermint oil to absorb moisture from sweat and the winter one has capsaicin, a plant extract that warms the body. Texrevo also includes citric acid and collagen to protect against fungi and to moisturize the skin. Kim said both can take up to an hour to have an effect, and after about 20 washes they lose about five percent of the effect.

Competing exhibitor Dry-Zone claims its fabrics’ efficacy stays the same after washing. According to company information, Dry-Zone’s fabric for outdoor activities has ultra-fine, or nano, particles with positively charged ions that sterilize the skin and protect against bacteria 99 percent of the time, even after 50 washes. Man Jae Lee, Dry-Zone’s assistant manager of overseas sales, said the company avoids cotton because it retains sweat.

Eco Fabrics Maintain Demand

Bryan Yoo, managing director of Shin Han said his company uses recycled PolyEthylene Terephtalate, or PET, in its fabric, which is more eco-friendly than new polyester from petroleum. Shin Han also uses recycled nylon and organic cotton, and has bluesign certification, which confirms the company adheres to industry standards of consumer and occupational safety and also air and water emission levels.

But these eco-friendly products come at a cost. To combat reduced spending in the global economic downturn, companies that use organic cotton, for instance, focus largely on children’s clothing targeting mothers willing to spend more.

Despite the hype about organic cotton, S.K. Kim, director of Spinners and Weavers Association of Korea (SWAK), said this cotton is limited in supply, giving Korean weavers insufficient material to work with. Plus it’s “not easy to verify that it’s organic,” he said.

Masako Nabe, a buyer for Country Quilt Market of Tokyo came to Preview Seoul in search of organic cotton to sell to Japanese businesses. She usually travels to the U.S. for fabrics, but came to South Korea in search of better prices. Although organic cotton is pricier, there’s “definitely a need” because of the amount of children with allergies, she confirmed. Nabe also sought organic lace. “People need it so they’re willing to pay the price.” But Nabe said the taxes and duties levied on imports made some of the fabrics cost-prohibitive.

Beyond Price

The fiscal downturn hasn’t hurt companies Korea’s Visionland who work with international brands like H&M, Zara and Mango. They are price-sensitive, yet demand eco-friendly materials, so Visionland’s Assistant Manager Bryan Yoon said they use materials like yarn that has recycled polyester, called PolyLactic Acid (PLA) yarn. While regular polyester isn’t easily biodegradable, Yoon said this material dissolves within a year. In early 2009, Visionland won $8,000 in government funding for a five-year period to continue making innovative fabrics.

Daniele Negro of Italy’s Miroglio Fashion came for more mainstream fabrics like viscose, nylon, spandex and polyester. One particular material was on his list, though – memory fabric, which is a hot trend in Europe, especially among the ironing averse. It retains hand-created creases, giving a uniform crumpled look from specially textured yarn.

But Karen Chen doesn’t think the memory material is worth the price. One manufacturer, Texlink, sells it at about $3-4 per yard. Chen, a Taiwanese designer, said she came to find materials that evoke luxury – “like Gucci,” including silk and leather. “Korea is more fashionable and the materials are better than in China and Taiwan,” said Chen, whose clients care more about fabrics being special than economical.

For Kabir Lumba, executive director of the Landmark Group, the goal was finding “functional” and “value- add fabrics” that people “would pay a small premium for.” Because of India’s growing upper-middle class, Lumba is optimistic. The customers of Landmark, India’s equivalent of Bloomingdale’s, want protection against moisture and lightweight fabrics. Two to three years from now, Lumba said the demand may lie in high-end fabrics, but for now it’s all about function. “Comfort is a key feature” in India, he said, where people are increasingly engaging in outdoor activities.

Fumio Takahashi, a buyer from Japan, was looking for “good textiles at a good price, but that doesn’t mean consumers will buy just because it’s cheap,” Takahashi said. “It’s got to be a good quality, because in this economy you can find cheap products anywhere.”

Turning To Tradition

Lee Min Jeong, a designer and professor, teaches a class at Sookmyung Women’s University in Seoul that is involved in a project with the agency of North Face in Korea to come up with new material for outdoor wear. She was impressed with a down jacket made by One Chang that had a transparent white shell that showed the multi-colored polyester filling beneath the outer layer. She said the use of recycled materials is becoming passé, while the new focus is on natural ingredients like hanji, a traditional Korean paper made from the bark of mulberry trees.

Lohas Hanji makes thread from this paper, and converts it into fabrics for linens, garments and even air conditioner filters. Manager J. Park, who was clad in a hanji button-down shirt and tie, said although it’s more expensive than cotton, people with sensitive skin will pay for hanji fabric. Adidas is in talks with his company to manufacture socks from hanji.

The three-day fair showed a glimpse of what South Korean companies are using to keep their place in the textile industry despite the weakened global economy and the growing threat from China. By making innovative outdoor wear, these companies may have what it takes to make the cut.