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China’s Comeback: Destination Hong Kong

In Articles Exports Fashion Freight Posted March 22, 2017 at 10:43 am
By David Thatcher

China's comeback

As fashion executives around the world reported in the first BoF- McKinsey Global Fashion Survey, the year 2016 can be summarised in three words: uncertain, changing, and challenging.

Terrorist attacks in France, Brexit, Trump and the volatility of the Chinese stock market have created shocks to the global economy. Combined with ever more demanding consumers radically reshaped by new technologies, shortening fashion cycles, sustainable innovation in product and manufacturing and the re-evaluation of the entire fashion system itself it all added up to one of the toughest years on record in 2016.

But in spite of this, fashion remains one of the key value-creating industries for the world economy. So where will the opportunities come from for local brands in 2017?  BoF / McKinsey identifies 10 emerging patterns, including (at number 2)…

China’s comeback

China’s fundamentals, including growth of the middle and upper classes, remain strong and the government’s new fiscal policies are expected to improve conditions in 2017.

One way Australia fashion brands can capitalize on the re-emergence of Chinese consumer is to be where they shop.  Thanks to its high tourism volumes and the broad variety of retail opportunities, Hong Kong is a burgeoning, competitive marketplace and only a short hop from Australia.  One of the biggest and best ways to target the Chinese consumer and get involved in the Hong Kong economy is through the fashion industry.

Driven by tourism – approx 60m visitors per year from markets such as mainland China (almost 75%), other Asian nations, USA, UK and Australia – the apparel market for the city is incredibly robust and it is growing larger every year. Specialty clothing and high-fashion retailers increased their sales by more than 5% in 2015, and this shows no signs of slowing down. For an Australian fashion brand ,exporting to Hong Kong, opportunities are high thanks to the several leading Australian apparel companies that have forged the path and built high profiles like Billabong, Jan Logan, Quicksilver, Roxy, Seed Heritage, and UGG. However, there are more than 80 Australian fashion labels in all that are sold in any number of fashion outlets in Hong Kong – and this figure continues to grow.

The high-end fashion market in Hong Kong, (both the consumers themselves and also the buyers), are highly brand conscious, and high-quality, well-designed apparel from Australian fashion houses (especially eveningwear and menswear) is in demand. More so for well-designed mid-market casual and street wear, swimwear and lingerie that, providing more opportunities for fashion originating from Australia. This makes Hong Kong a prime target for Australian brand looking for new markets, especially since there are low regulatory requirements on apparel and there are no imported textile tariffs whatsoever.

Awareness of Australian fashion is still relatively limited in Hong Kong. While it might seem like a nearly insurmountable task breaking into the Hong Kong fashion market, with international powerhouses from Europe and the United States competing for market share, don’t underestimate the appeal of Brand Australia in the region the strong reputation Australian designers are building for quality and innovation.

If you are considering expanding you market to the north, here are a few points to note

    • Bricks and mortar retailing is still the preferred format, although online is growing
    • Consumption patterns are shifting towards fast fashion and the 20-30 year old demographic with a strong eye for trends and a focus on image is very open to international labels.
    • Opposing seasonal patterns places a strong emphasis on trans-seasonal collections
    • The market is heavily media influenced, so a strong brand and quality marketing materials are essential. A media contact on the ground is also recommended – either a PR consultant or work direct with a blogger(s)
    • Make use of alternative channels like pop up stores and markets. This builds awareness and helps position your brand, get in the moment customer feedback on product, price and brand as well as promote your online platforms
    • Time is of the essence – get in before the buyers travel to Europe and the US in September or when they return just prior to Shanghai Fashion Week
    • There are no import tariffs into Hong Kong
    • Most retailers are happy to pay for shipping ex-works

 

Getting your foot in the door in Hong Kong and ready for China’s comeback might be less difficult than you think.

If you would like to discuss your expansion into Hong Kong and the freight and logistics requirements that go with it, please get in touch with Magellan on 1300 651 888 or via email.

Sources:

http://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Hong-Kong/Industries/clothing-and-fashion

http://www.counciloftextileandfashion.com/council-of-textile-fashion-blog/2015/12/16/common-threads-export-advice-for-australian-fashion-brands

http://www.mckinsey.com/industries/retail/our-insights/the-state-of-fashion?cid=other-alt-mip-mck-oth-1612

 

Originally posted: http://www.ragtrader.com.au/insights/8-tips-for-breaking-into-china

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