Mistaken Identity
Although manufacturing is the driving force behind the region’s apparel business, the fair focused on young designers.
By Barbara Wang
With about 1,900 exhibitors participating, this year’s Hong Kong Fashion Week attracted a considerable number of manufacturers, however there was a significant drop in the number of buyers who attended. Manufacturers said that the fair was even quieter than last year (which was already a disappointing event). Some blamed the gloomy European market; while the others blamed the event organizer who obviously did not do enough to promote the event.
Trade Fair or Fashion Show?
Although the driving force behind Hong Kong and the region’s apparel industry is manufacturing, Hong Kong Trade Development Council (HKTDC), the fair’s organizer, is bent on promoting Hong Kong as brand resource, despite the fact Hong Kong, and the region, have few fashion brands. Fashion manufacturers, which were and still are the major component of the fair, get little support or attention. Yet they are the reason that buyers come here in the first place.
With manufacturing costs increasing, and the region’s domestic consumer markets growing, there is a logical argument for Hong Kong Fashion Week to shift focus. The problem is that the region has very few real brands. Buyers who are looking for brands go to Europe.
Qi Gang, a Chinese designer, whose collections were launched during Fashion Week and received much attention, told the media that industry should upgrade. “China has been the world’s clothing factory for a long time. But as our economy develops, we are also becoming a country with its own famous brands.”
Mr. Qi’s belief is well supported by the booming China market. With consumers getting more sophisticated and more fashion conscious, Hong Kong could be a window for this massive fashion market. Hong Kong Fashion Week, therefore, might ultimately resemble Japan Fashion Week, which mainly features local designer collections and brands.
The theory sounds all well and nice. But in reality the transformation could be painful. China is still a fragmented market largely dominated by small brands. International brands compete at the luxury level, while local original designs are rare. It remains to be seen how much influence Hong Kong Fashion Week could exert to the China fashion market.
On the other hand, manufacturers are still the key players at this part of the world and are the reason that buyers come here.
Even the organizers have doubts about the fair’s focus. Vincent Fang, Chairman of Hong Kong Trade Development Council (HKTDC) Garment Advisory Committee, said in a media interview that he had concerns over the positioning of the Hong Kong Fashion Week. On the one hand, he wanted the show to move up from low-value OEM sourcing and distinguish itself from other sourcing fairs. On the other hand, buyers did not seem ready for the transformation of Fashion Week from a sourcing event to fashion brand event.
Still Price Sensitive
The buyers who came to the fair were mostly value seekers, with price being their top concern.
“I have been to Japan Fashion Week and Italy Fashion Week and this is my first time exhibiting in Hong Kong,” said Sera Hwang, CEO of Sera International, a handbag company based in Seoul Korea. “One of the differences I see is that the buyers here are very price sensitive. Many people come by our booth and they like our designs. But they could not accept our prices. In Italy and Japan, however, buyers are more flexible with the prices.”
Price sensitivity has made Chinese manufacturers less attractive, and factories need to boost their quality, design capabilities and manufacturing skills in order to justify higher prices.
“We are lucky that we manufacture high-end women’s wear,” said Elain Lu from Full-Faith Garments, a factory based in Ningbo, China. “Rumors are that many small factories in our area that export low-end garments will be shut down after the Chinese New Year. We are in a better situation because our customers are more flexible with their prices. Still we see a lot of orders going to Bangladesh and Vietnam as we could not compete with them on price.”
Apart from offering better designs and quality, to Simon Tang, manager of the Nantong Forcheng Enterprise Ltd, manufacturers must offer new designs quickly. “Copycats are common. Whenever we have new design, a couple of weeks later, there will be other manufacturers offering same designs at a much cheaper price. Therefore the key is to keep offering new ones.”
“We used to export a lot to the U.S. However buyers there are getting very price sensitive, so we are now mainly exporting to the European market. Still we have to provide them with new designs justify higher prices,” said Ms Lu.
The Year Ahead
Looking ahead, manufacturers are speaking of uncertainties. Most claimed that they would stick with their current business models and search for new buyers. Despite the gloominess of the global market, few believed that adopting a new business model was a good idea.
“Our strategy for next year is to stay conservative,” said Jet Lee, executive director of Wen Zhou NOBCO Garment, one of the many garment manufacturers located in Wen Zhou City, China. “I don’t see the market turning up very soon and we do not want to take too many risks in the current atmosphere.”
When asked about his opinion on exploring new markets and even the domestic market, Mr. Lee was quite pessimistic. “Those who tried their own brands in the domestic market died very soon. It is not a good idea for us to change our business model. For now we will continue to do what we are good at and are not ready to make any changes.”
Mr. Tang from Nantong Forcheng Enterprise expressed a similar view. “It takes a huge investment to establish a domestic brand. Most people who went down that path failed. We certainly learned the lesson. Also, as we are located in Yangtze River Delta, our worker supply is quite stable. Our local government policy is also quite stable. We do not expect to see many changes in either our business environment or our company policy within this year.”
Ms. Lu, however, expressed some concern about the worker supply. “There would definitely be a period after Chinese New Year when we could not find enough workers. It happens every year. But we always find ways to recruit enough workers. It is, however, ultimately a price issue as any increase in workers’ salary would be reflected in our prices.”