Down Times Can Be Good Times For Accessories
By Ernest Kao
There is a conventional belief that accessories do well in times of recession. Consumers trade down from fashion apparel to fashion accessories such as bags, shoes, jewelry and headgear. ‘Mix and match’ replace frivolous spending on wardrobes that occur during consumption binges.
This was consensus at the October 2009 Fashion Access, and from what exhibitors were saying this season, things looked pretty much the same this year round. Even though most believed that the worst was over, accessories makers have nonetheless been affected by the 2009 slump. B. Rath, general manager of Akij Footwear Ltd., a footwear manufacturer-based in Bangladesh, says that buying capacity has been reduced significantly. Due to the reduction in demand from main buying markets, Japan and Europe, orders remain subdued.
This season's pared down exhibition (March 29-31) featured fewer exhibitors, however the consolidated venue felt like it was busy with visitor activity.
Some companies such as Bliss Designs Pvt. Ltd exhibited at Fashion Access for the first time and found that other than a the lack of orders, it was not all so bad. “We’re getting a lot of enquiries and that is a good sign,” says Mr. Jainn. “Buyers have more specific demands for their orders and are strictly looking for the color, price and style they have in mind.” The days of experimentation and taking a chance on a new product are gone.
Even in the accessories sector, buyers seemed to be getting picky and are no longer acting on impulse. “Buyers are now very educated, we can’t just sell them anything,” Jainn added. Competition from other low-wage producers in countries such as China has squeezed margins and increased competition in the market for Indian manufacturers such as Jainn. More and more, price rather than quality was becoming the most important aspect of buying decisions. But Jainn believed Indian manufacturers did command one competitive advantage, “In India we have a slogan: ‘produce European designs at Asian prices’.”
For Hong Kong-based International Colours Ltd, diversifying manufacturing was a key strategy. A producer of leather-goods and carrier of the brand Jekyll and Hide, the company manufactures small accessories such as wallets and pouches in India and larger items such as bags, in China. “We aim to look for the best craftsmen for a particular product,” said Colours’s Larry Bagg.
Bagg believes that even in downtimes, there is a demand for leather goods. There were challenges however. Rising competition from manufacturers of faux leather goods and ‘plastic’ leather goods have been affecting genuine leather makers. But Bagg points out that bags made from PU material have an inferior life-span compared to genuine leather bags.
‘The current challenge for us now is that we can’t find good people to do finishing. It’s not so much a problem in China where they have everything in their factories, but in India, it is quite difficult,” said Bagg.
Overall, companies seemed to be actively seeking new market opportunities. For Jainn of Bliss Designs, Scandinavian countries were potential money-making markets. When asked why, he simply answered, “no particular reason, we just feel that way.” Markets to the east would be a focus for Bagg and company and especially in China.
“We want to enter more East Asian markets. China definitely has potential but we just aren’t sure if they will appreciate our products yet,” said Bragg. “Demand from China comes from China, we can’t push a product to them that they don’t like.”