Overview
Textile quotas had been eradicated amongst WTO members on the first day of 2005 in accordance with the Settlement on Textiles and Clothes (ATC). Nevertheless, resistance to quota elimination unfold within the US and EU. Subsequently, China reached agreements with the EU and the US in June and November 2005 respectively. The China-US settlement, efficient from January 2006, governs the exports of a complete of 21 teams involving 34 classes of Chinese language textiles and clothes merchandise to the US throughout 2006-2008. The China-EU settlement, efficient from June 2005, covers 10 classes of Chinese language textiles and clothes exports to the EU throughout 2005-2007.
Alternatively, the mainland and Hong Kong agreed in October 2005 to additional liberalise the mainland marketplace for Hong Kong corporations underneath the third section of the Mainland and Hong Kong Nearer Financial Partnership Association (CEPA III). Together with different merchandise of Hong Kong origin, the mainland agreed to present all merchandise of Hong Kong origin, together with clothes objects, tariff-free remedy ranging from 1 January 2006. In keeping with the stipulated procedures, merchandise which don’t have any current CEPA guidelines of origin, will take pleasure in tariff-free remedy upon functions by native producers and upon the CEPA rule of origins being agreed and met.
Hong Kong clothes corporations are respected for ODM and OEM production. They’re able to ship high quality clothes articles briefly lead time, as international importers and retailers request clothes suppliers to tighten up supply chain administration to make sure the ordered merchandise reaching the shop flooring on the proper time. More and more, Hong Kong clothes corporations, the established ones particularly, have proven enthusiasm for model promotion.
Hong Kong’s whole exports of clothes rose year-on-year by 9% within the first 11 months of 2005. Whereas Hong Kong’s re-exports of clothes rose by 20%, home exports fell by 14%. Within the first 11 months of 2005, Hong Kong’s clothes exports to the US and EU rose by 11% and 18% respectively. Whereas Hong Kong’s clothes exports to Japan levelled off, these to the Chinese language mainland declined by 11%.
Industry Options
The clothes industry is a significant manufacturing sector of Hong Kong. Its gross output is likely one of the highest amongst all manufacturing sectors, amounting to HK$35.9 billion in 2003. It’s the largest manufacturing employer in Hong Kong, with 1,673 institutions hiring 28,752 staff as of June 2005. It’s also the main earner when it comes to home exports, taking on 40% of the entire within the first 11 months of 2005.
Hong Kong’s geographic boundary has by no means constrained the event of the forward-looking clothes industry. The vast majority of clothes producers have arrange offshore production services in an try to cut back operation prices. Relocation of production services offshore has nonetheless resulted in a gradual decline within the variety of clothes producers in Hong Kong.
Hong Kong is just not solely a number one production centre but in addition a hub for clothes sourcing globally. Firms doing garment commerce in Hong Kong are skilled in materials procurement, gross sales and advertising and marketing, high quality management, logistic preparations, clothes designs and worldwide and nationwide guidelines and laws. The professionalism that they command and the mixed companies supplied usually are not simply matched elsewhere. With a complete of 15,190 institutions hiring 95,889 staff, they kind the biggest group concerned in import-export commerce in Hong Kong.
Efficiency of Hong Kong’s Exports of Clothes
Hong Kong’s whole exports of clothes rose year-on-year by 9% within the first 11 months of 2005. Whereas Hong Kong’s re-exports of clothes rose by 20%, home exports fell by 14%. The contrasting efficiency of Hong Kong’s re-exports and home exports was principally ascribed to the rising relocation of garment manufacturing to the Chinese language mainland, ensuing from the elimination of quotas underneath WTO’s Settlement on Textiles and Clothes (ATC). However the declining pattern of home exports has been reversed considerably in latest months, because of the re-imposition of quantitative restraints on mainland-made textiles and clothes by the US and EU.
Retail gross sales within the US held agency within the first 11 months of 2005, rising by almost 6% from the identical interval within the earlier yr. Within the first 11 months of 2005, Hong Kong’s clothes exports to the US rose year-on-year by 11%.
Within the first 11 months of 2005, Hong Kong’s whole clothes exports to the EU surged year-on-year by 18%. Clothes exports to main EU markets like France, Germany and Italy recorded growth charges in extra of 20%.
Alternatively, Hong Kong’s clothes exports to Japan levelled off within the first 11 months of 2005 partly because of the pattern of direct cargo. On the again of the rising revenue nonetheless, Japanese customers are inclined to resume their spending spree on premium clothes objects. In the meantime, Hong Kong’s clothes exports to the Chinese language mainland dropped by 11% within the first 11 months of 2005, in contrast with the identical interval final yr.
Product-wise, Hong Kong’s exports of woven put on rose by 12% within the first 11 months of 2005. Whereas woven put on for ladies/ladies grew by 13%, these for men/boys recorded a growth of 8% from the identical interval within the earlier yr. Knitted put on grew by 2%, with girls/ladies and men/boys rising by 1% and 6% respectively. Whereas clothes equipment declined by 3%, different attire articles, for his or her half, elevated by 13% baby girl clothes B09P653HJ8.
Gross sales Channels
Hong Kong’s clothes producers have solid robust relationships with their prospects. They’re able to perceive and cater for the preferences of very broad buyer bases. Exporters even have good information of worldwide and nationwide guidelines and laws governing clothes exports, similar to guidelines of origin, quota restrictions, tariff charges and documentation necessities. Lower, make and trim (CMT) preparations are frequent though many Hong Kong producers have moved to increased value-added actions similar to design and model growth, high quality management, logistics and materials sourcing.
A number of well-established native producers have entered into the retailing business, both regionally or in abroad markets. A lot of them have retail networks in main cities around the globe together with Beijing, London, New York, San Francisco, Shanghai, Singapore, Sydney, Taipei and Tokyo. Some well-known manufacturing retailers embody Baleno, Bossini, Crocodile, Episode, Esprit, G-2000, Giordano, JEANSWEST, Moiselle and U-2.
As a world sourcing hub in Asia, Hong Kong attracts various worldwide buying and selling homes and main retailers. Consumers sourcing from Hong Kong embody American and European malls (e.g. Macy’s, JCPenney, Federated, Karstadt Quelle, C & A), low cost shops (e.g., Sears, Goal and Carrefour), specialty chains (e.g., The Hole, The Restricted) and mail order homes (e.g. Otto and Nice Common Shops). Many worldwide premium designer labels — similar to Calvin Klein, Donna Karen, Ralph Lauren, Tommy Hilfiger and Yves Saint Laurent — supply garments in Hong Kong by way of their shopping for workplaces or different intermediaries.
Hong Kong’s vogue designers have been gaining worldwide popularity for his or her skilled experience, sensitivity to present traits and skill to mix commercialism with innovation. Medium to high-priced vogue clothes bearing Hong Kong designer labels is being offered/have been offered in famend division
shops abroad similar to Bloomingdale’s, C & A, Harrod’s, Isetan, Macy’s, Marui, Mitsukoshi, Nieman Marcus and Seibu.
Commerce gala’s and exhibitions stay frequent locations for consumers and suppliers of clothes to congregate. To ascertain connections and discover market opportunities, Hong Kong producers and merchants have concerned themselves actively in worldwide reveals led by the Hong Kong Commerce Growth Council (TDC), together with those in Beijing, Chengdu, Dalian, Dubai, Dusseldorf, Hong Kong, Moscow, Mumbai, Paris and Tokyo. ‘Hong Kong Vogue Week’ is organised twice a yr and attracts worldwide suppliers and consumers to take part within the exhibition. Organised by TDC, ‘World Boutique, Hong Kong’ is the primary impartial occasion in Hong Kong devoted to selling designers’ assortment and types from around the globe.
Industry Traits
Modifications in retail panorama: Within the US and EU, large-scale retailers are present process drastic restructuring and consolidation, particularly, the rising prominence of hypermarkets similar to Wal-Mart. To strengthen competitiveness, Sears and Kmart have merged to kind the third largest retail group within the US.
Rising significance of personal labels: Personal labels, in essence, have change into an more and more efficient advertising and marketing software amongst garment retailers. With a purpose to differentiate in addition to improve the picture of their merchandise, main retailers have began to place a stronger emphasis on their very own labels. In keeping with Cotton Integrated, non-public labels accounted for 45% of whole US attire gross sales in 2003, up from 39% in 2001. In some adult attire classes, similar to skirts, non-public labels accounted for as excessive as 76% of the entire gross sales. It’s also estimated that 45% of merchandise offered within the EU are offered underneath non-public labels. Famend retailers similar to H&M, Marks & Spencer, Orsay, Palmers, Pimkie, Springfield and Kookai have owned their non-public labels. As customers need to have non-public labels on on a regular basis clothes like denims, equipment and T-shirts, the doorways are additionally open to the supply of those clothes objects to personal label homeowners.
Rising curiosity in China’s home market: The fast enlargement of mainland’s economic system has attracted nice curiosity of Hong Kong clothes corporations to discover its clothes market. A TDC survey on mainland’s garment buyers signifies that Hong Kong manufacturers are ranked primary by the respondents within the mid-range section. Whereas worldwide manufacturers are most most popular within the high-end section, mainland manufacturers dominate the low-end. As well as, the identical survey finds out that within the eyes of mainland customers, Hong Kong corporations are very robust in informal put on, as they’re typically of excellent design and high quality. In essence, many mainland customers have developed a stronger consciousness of Hong Kong manufacturers by way of tour to and procuring in Hong Kong. Subsequently, Hong Kong’s informal put on has efficiently projected a optimistic picture to mainland customers.
CEPA
On 18 October 2005, the mainland and Hong Kong agreed to additional liberalise the mainland marketplace for Hong Kong corporations underneath the third section of the Mainland and Hong Kong Nearer Financial Partnership Association (CEPA III). Together with different merchandise of Hong Kong origin, the mainland agreed to present all merchandise of Hong Kong origin, together with clothes objects, tariff-free remedy ranging from 1 January 2006. In keeping with the stipulated procedures, merchandise which don’t have any current CEPA guidelines of origin, will take pleasure in tariff-free remedy upon functions by native producers and upon the CEPA rule of origins being agreed and met. However non-Hong Kong made clothes merchandise will stay topic to tariff charges of 10-25% when getting into the mainland.
The promulgated guidelines of origin for clothes objects to learn from CEPA’s tariff desire are principally much like the present guidelines governing Hong Kong’s exports of those merchandise. Typically talking, the principal manufacturing means of cut-and-sewn garment is sewing of elements into clothes. If linking and/or stitching is/are required, such course of/processes should even be carried out in Hong Kong. For piece-knitted garment, whether it is manufactured from yarn, the principal course of is knitting of yarn into knit-to-shape panel.
If the piece-knitted garment is manufactured from knit-to-shape-panels, the principal course of is linking of knit-to-shape panels into garment. If stitching is required, it should even be carried out in Hong Kong.
Commerce Measures Affecting Exports of Clothes
In keeping with the ATC, textile quotas had been eradicated amongst WTO members on the first day of 2005. Nevertheless, resistance to quota elimination unfold within the US and EU. Significantly within the US, China-specific safeguards on 10 classes of clothes objects from China had been invoked. Towards this background, China reached agreements with the EU and the US in June and November 2005 respectively.
The China-US settlement, efficient from January 2006, governs the exports of a complete of 21 teams involving 34 classes of Chinese language textiles and clothes merchandise to the US throughout 2006-2008. It permits an annual growth of 10-15% in 2006, 12.5-16% in 2007 and 15-17% in 2008. The China-EU settlement, efficient from June 2005, offers for an annual growth of 8-12.5% in 10 classes of Chinese language textiles and clothes exports to the EU throughout 2005-2007. As well as, each EU and US agreed to exercise restraint in invoking China-specific safeguard towards Chinese language textiles and clothes that aren’t lined within the agreements.
Product Traits
Formal Dressing: Whereas informal put on accounts for the majority of clothes gross sales, a common pattern in direction of stricter company gown codes has led to a rising demand for formal dressing, significantly fits. In keeping with a survey by Cotton Integrated in late 2004/early 2005, 38.5% of respondents consider that individuals dressed too casually at work. It is a 6.5 proportion level improve over the identical year-ago.
Teenager: One of many main driving forces of clothes market seems to be the youngsters within the coming years. The variety of youngsters within the US expects to extend from 31.6 million in 2001 to 34.1 million in 2010. A latest survey by Teenage Analysis Limitless discovered that teenagers are saving cash by worth procuring. Whereas JCPenney is their favorite division retailer, Goal and Wal-mart are their favorite hypermarkets. As well as, Previous Navy is their decisions amongst specialty attire shops.
Silver Market: Ageing inhabitants turns into a typical phenomenon in lots of developed international locations in Europe in addition to Japan and the US. Aged individuals represent a significant market section known as ‘silver market’. Supported by financial savings, social safety advantages and pensions, many aged individuals have fairly robust spending energy. It’s estimated that the age group of 65 yr and above accounted for about 21% of Japan’s consumption expenditure in 2000. A survey carried out by the Japanese authorities additionally reveals that people who find themselves 60 years previous and above possess nearly 3 times the monetary property of these within the 40-50 age group. Within the US, these aged at or above 65 amounted to 18.1 million in 2001, and the quantity is anticipated to swell to 26 million in 2015.
Plus-size Market: The plus-size market has been an space of growth for a few years, and the pattern is anticipated to proceed within the coming future. It’s estimated that 65 million girls within the US put on measurement 14 or above. This group represents one-half of the US feminine inhabitants. It’s reported that some famend manufacturers have already responded to the pattern by providing merchandise of bigger measurement; these corporations embody Liz Claiborne, Ralph Lauren and Tommy Hilfiger.
Simple-care Garments: Garments fabricated from stain-resistant and wrinkle-free materials are effectively acquired available in the market. It’s estimated that a couple of quarter of attire is now fabricated from easy-care materials, and its reputation is anticipated to proceed within the subsequent few years. Whereas main attire manufacturers like Dockers and Liz Claiborne have already marketed extensively easy-care garments, main hypermarkets, like Wal-Mart, additionally provide extra merchandise of such high quality.
Supply: Hong Kong Commerce Growth Council