Survival of the Fittest
By Samantha Vaughn
Manufacturers are battling it out to survive amid tough economic conditions. With prices on raw materials rising, the future of Europe’s currency in disarray and rising labor costs becoming a monumental issue, companies are desperately trying to lure new buyers to compensate for smaller orders – or in many cases no orders – from old customers. On opening day of Hong Kong’s semi-annual Fashion Week noticeably fewer exhibitors displayed their wares to what appeared to be a better-than-expected show of visitors (possibly more a matter of ‘managed expectations’ given the current economy.)
Not knowing what will be the deal-maker for buyers, manufacturers wrestled with whether to offer better design, cheaper prices or better quality – with most trying to find some combination of all three. Clearly the focus this season is not on the bottom line – a habit which is also playing a role in keeping apparel prices depressed.
Tedi Budiana, CEO of New York-based Samuel Dong, was optimistic. With OEM factories in Hangzhou, China, Mr. Budiana believes that the secret to success for manufacturers is not just focusing solely on design, quality or price, but the three combined. “I think it’s all about the best design, best quality and being reasonably priced,” he said.
Mr. Budiana stressed the importance of developing original designs. “Our designs are very innovative,” he said. “We don’t copy from other people’s designs. I mean we really try to come up with our own ideas, keeping them fresh and original.”
Lal Sadarangani of Best Dreams Ltd, also said his company’s focus was on design innovation and product development. The company was at the fair to launch their new jeans collection which features the ‘padded jean’ for women who to “add a backside to themselves,” as Mr. Sadarangani explained. The inspiration he said came from South American where ample buttocks are a fashion statement.
“In South America, there’s a lot of lot of this kind of [body enhancing product] so we’re trying to sell it to other markets,” he said.
In contrast, Eva Cheng, the General Manager of Inter-Moda Fashion, believes that given the current economic state, buyers were mostly concerned about. “Price is the priority, always number one,” she said.
Knowing this, she has come up with strategies to cope with the situation. One of her strategies is design modification. “If the styling is not too complicated,” she explained, “I can reduce the CM costs, just to leverage out the increase in material costs.”
Another tactic she’s using is to offer more fabric options to her buyers, letting them choose the material and offer more customization so they can save money. “We still have to survive these days, I think you heard this from the others [companies] as well,” she said with a hopeful smile.
Despite the pressure on price, buyers don’t want to sacrifice on quality. “The thing is,” said Jaideep Raswant of Textile & Apparel International Ltd, “prices are going up but the buyer still wants a better quality product. Nobody is compromising quality concerns.”
With his customers looking for quality, design and price, Mr. Raswant has come up with a solution. “What we have done is look for alternate fabrics and come up with new, cheaper techniques of embroidery and fabrication to lower the target prices.”
Whether the focus is on quality, price or design, manufacturers are being forced to sharpen up their strategies. A recession brings Darwinian selection process into play, picking off the weak and allowing only the strongest to survive.