HONG KONG — Is a gateway still a gateway if no one goes in or out of it?
This story first appeared in the May 20, 2003 issue of WWD. Subscribe Today.
For more than a century, this city has served as a commercial gateway to China, a home base to trading companies that matched up foreign customers with Chinese suppliers. But since the SARS outbreak was discovered here in March, Hong Kong’s merchants have faced a knotty problem: Their customers are unwilling to come to see them and in some cases they’ve been told that they’re not welcome to travel to visit their customers.
The World Health Organization has issued an advisory recommending that travelers consider postponing all nonessential travel to Hong Kong and most major U.S. apparel companies have told their employees not to make the trip. Hong Kong’s outbreak appeared to be on the decline, with more than 68 percent of the 1,703 people who had contracted the disease having recovered by Thursday.
Still, with their customers likely to continue to stay away at least until the WHO lifts its advisory, Hong Kong suppliers have had to turn to alternate ways of doing business, including using more telecommunications technology and traveling more.
Santi Chong, managing director of Navarino International said because buyers are wary of coming to Hong Kong, his company has been sending out lots of samples.
“Fortunately, I visited a lot of my customers before SARS really became an issue,” he said. “I’m lucky because I could see them in their offices — and the Hong Kong sourcing offices have been helpful, too.”
T.K. Lam, sales manager for Charles Parsons Fabrics, has had similar experience to Chong. “There have been fewer inquiries since SARS began, but we’re doing business normally. We just don’t have face-to-face meetings,” he commented.
T.K. Lam added that he expects the situation to improve by the time Interstoff Asia takes place in October. “That’s about four to five months away and things should be fine by then. The travel ban will certainly be gone.”
When Interstoff Asia was held in March, the affect of SARS on business was immediately apparent. The disease had only just become news in Hong Kong and no travel advisories had been issued, but the fair still saw a 25 percent drop in buyer attendance as well as a number of no-show exhibitors. Organizers Messe Frankfurt scrambled to help disappointed exhibitors by creating an Internet-based platform. Katy Lam, general manager of the trade fair, said the internet service was “the best we could do at the that moment…We’re trying to develop a similar platform for our next show because we want our exhibitors to get exposure.”
The Hong Kong Trade Development Council took a similar approach by sending press kits and product photographs to its list of buyers.
It has had to cope with unprecedented nonevents, including the postponement of nearly all fairs at the Hong Kong Convention and Exhibition Centre in May, which is normally the venue’s busiest month.
“Some buyers can’t come here, but they proactively ask for information,” said Anne Chick, senior exhibition manager of trade fairs at the development council. “Everyone has been taken by surprise by this, but the Americans and Europeans still need to buy products.”
Michael Duck, managing director of the Asia Pacific Leather Fair, argued that trade fair organizers can do little more to facilitate contact between exhibitors and buyers.
The spring edition of APLF, which is the region’s largest leather fair, was postponed from April to late June because of SARS and Duck is still waiting to see how the disease, travel bans and buyer phobias play out.
“We’re still in an unknown position because of travel advisories, but we know the criteria [for them to be removed] and we hope that it has peaked in Hong Kong,” he said. “People want to do business and it’s important that people see their customers. SARS has predictably affected the service industry, but it hasn’t impacted manufacturing.”
Within the city, things are starting to look more normal. Restaurants and retailers are seeing business return to pre-SARS levels and fewer people wear face masks each day. But even as a sense of normalcy returns, the WHO advisory has meant not only that international buyers will not come to Hong Kong, but also that Hong Kong’s manufacturers are not welcome abroad.
To date, hardest hit have been Hong Kong’s jewelry and watchmakers, who were barred from attending Baselworld The Watch and Jewelry Show in April and subsequently disinvited to June’s Vincenza Fair in Italy.
Reed Exhibitions, organizers of this month’s JCK show in Las Vegas, have changed the status of exhibitors from countries with SARS outbreaks numerous times. After originally banning such exhibitors, Reed proposed they would be housed separately in a tent in the garage adjacent to the main hall. The tent idea was subsequently scrapped and Reed said manufacturers from Hong Kong could show inside the main hall, but only if they arrived 10 days before the fair and underwent health checks. They also are required to present health certificates.
After imploring the government for intervention in the matter, Hong Kong’s jewelry makers breathed a sigh of relief at Reed’s latest edict and agreed to the health checks, but few expect the decision to be final.
Patrick Luk, chairman of the Hong Kong Jewelry Manufacturing Association, said U.S. competitors might put pressure on Reed to reinstate the ban. He added that even if Hong Kong companies are allowed in the fair, he expects a 10-percent drop in orders from international buyers, because many will be wary of visiting the pavilion.
B.K. Chow, general manager of the jewelry association, said reassuring buyers was a paramount concern. To do so, participating exhibitors will undergo a number of extra precautionary measures including X-rays before the fair, SARS-screening blood tests and twice-daily temperature checks.
“Our presence at JCK sends a message to other international fairs that we are going the extra mile to reassure people’s health concerns,” said Chow.
The message seems to be getting through. Hong Kong’s garment makers were told that they’d be welcome at Fatex, the annual clothing fair in Paris. The exhibitors were not required to undergo health checks, but the development council suggested that those attending the fair should have blood tests and X-rays as a precaution.
The Trade Development Council also issued its first assessment of SARS impact on Hong Kong’s exports. It noted that reorders and standard items had not been affected by the outbreak, but sales of new products and business deals with new deals had been curtailed.
The report also noted that the wait-and-see attitude of overseas buyers was due to more than SARS.
“The prime considerations rest more with retail conditions domestically, which have been overshadowed, among other things, by the U.S.-Iraqi war and economic sluggishness,” a recent development council report said.