Eastern Dreams

In China, European mills find a potentially lucrative market with a steep learning curve.

By Philip Leung

For years, European fashion labels have led the world in taste and style. After all, their local suppliers have a rich history of producing the highest quality textiles. But as of late, China’s growing number of brands is shifting the influence of fashion to the east. And despite the reluctance of European suppliers to sell overseas, they will need to depend on China in order to survive.

“Almost everybody agrees China will be a real market,” says Philippe Pasquet, CEO of France’s Premiere Vision. This explain why Premiere Vision, one of the world’s largest textile and fabric show, and certainly the most prestigious, has come to Beijing. It is their second China exhibition in six months, with the previous session held in Shanghai last autumn. The two-day event housed an exclusive group of exhibitors from Turkey, France, Italy and Spain - all with the intention of producing for the Chinese market.

But when it comes to approaching new markets, there will always be hesitancy. Cultural, political and judicial differences create an uncertainty of whether it is worth the gamble for investment. China especially, is completely foreign to many who for decades, have dealt only with their own markets. “The first problem for people who speak good English, is how do we get our money?” jokes Thomas-A. Kredt, Manager for Litak Lining.

Almost all of the seasoned exhibitors at Premiere Vision said they rely on agents. Besides getting over the barrier of language, agents have the expertise and know-how of local markets. It is especially important for small companies who do not have the expenses to set up offices abroad. “They (agents) allow us to be everywhere at once,” said Mariella Aleo, Manager of Seterie Argenti. And when it comes to selling high-end products such as textiles from Europe, companies are expected to know their client’s market inside and out.

Understanding China’s intricate business culture cannot be learned overnight. There is always the possibility in offending potential clients. “Chinese buyers rarely ask for price,” said Nicolas Eyraud, representative for Belinac. His company relies on agents to gauge whether Chinese buyers are genuinely interested in the product. There is a high level of trust required with an agent when entering a foreign market; otherwise, it can jeopardize sales.

The importance of language does not only lie in simply in being able to speak Mandarin (China’s national language). By partnering with an agent who speaks a local dialect such as Shanghainese or Cantonese, companies can join an even more exclusive club of buyers. “Few companies decide centrally what they will produce,” says Matteo Dal Pra, Chief Representative of Marzotto. Since China is such a vast market, it is usually individual retailers that determine what goes in to production.

Those who have experienced success at the show understand that it is about relationships. This includes setting up meetings before and after the exhibition in order to establish a constant stream of communication. Established European suppliers often make the mistake of being passive by relying on reputation alone. For Deveaux s.a, which claims to be the biggest textile group in France, even after selling to Chinese buyers for 12 years, they still have three agents in the country.

As the demand for high quality textile increases in China, so will Europe’s exports. According to China Customs, textile imports from Italy and Germany rose 9.95% and 15.21% respectively in 2008. Europeans are becoming more comfortable in dealing with China, and Premiere Vision sees no sign of slowing down. However, with the global economic recession, it will be a gradual process. Mr. Pasquet compares his foray into China similar to that of when they first started approaching America, “Our New York show took eight years to establish” he said, “It takes time.”