HONG KONG — The slowdown in China cast a dark shadow over the APLF Fashion Access accessories fair with vendors reporting a decline in orders.
The fair, which took place at the Hong Kong Convention and Exhibition Centre from March 30 to April 1, saw less foot traffic than in previous years. Vendors said regular clients were returning, but placing smaller orders.
Ming Hung of Chinsung Leather, a Chinese manufacturer of leather for bags, said the company had invested in a large booth in the hope of attracting European buyers, but interest was lackluster.
“In China the slowdown is bad. Factories are doing less work and some are closing, people are losing their jobs,” said Ming.
Despite the slowdown she was hopeful that buyers would return. She said that while India, Bangladesh and Vietnam were able to produce more cheaply, they lacked the technology and skills to make high-quality bags such as those made in China.
“People say this will be the most difficult year. I think it will be two years before it improves — and when it comes back China needs to improve its technology, quality and competitiveness,” said Ming, adding that she would also attend the Canton Fair in April in the hope of securing more orders.
Noelle Bairle, a fashion and accessories buyer at Oxford in Sydney, said the quality of the exhibitors at the fair was much better than those at the Canton Fair. She said that in recent years she has learned to source more widely, finding the best from each country.
“The leather in India is very good and reasonably priced. I still go to Chinese manufacturers for some things, even though it is becoming more expensive,” said Bairle.
She noted that despite the slowdown in China the country was still predicting a growth forecast of 6.5 percent, a very healthy figure, and said it was time for a period of adjustment.
“An adjustment is good because you get more innovation, it makes people get more resourceful and competitive. It hasn’t happened yet, but it will come,” she said.
Richard Siegler, a buyer from California, is the founder of online belt store Belts.com. He echoed Bairle’s comments about sourcing widely. He has been coming to the Hong Kong fair since 1993 and returns each year to the same buckle supplier, but he also buys the materials for the belts in Mexico, India, Taiwan and China and then assembles the belt in the U.S.
“We are finding that people want things made in the U.S. — it’s a big trend. And people also want to customize their belts, so we let them pick not just the color and size, but also the buckle and details,” said Siegler.
Those in China are facing tough times. Jackie Liu, a Shanghai-based agent at Cheng Nuo, described the Chinese economy as “terrible” and said he expected it to get worse before it got better.
“Everyone is lacking money. All their money is tied up in materials, but they aren’t getting the orders they need. I think we need to wait until the second half of the year before things get better, maybe longer, the market is changing every day,” said Liu.
Jackie Ng of HHumari, a color transfer-foil manufacturer, said orders from Europe had fallen sharply and the increasing strength of the yuan was making things even more challenging.
“[After] four years already our European buyers want to make the price in U.S. dollars because the renminbi is going to [be too] high,” said Ng.
New to the fair was Hyoujin Wee from Croco International, which produces bags and accessories from crocodile, ostrich and snake leather. She said it was inevitable that business would be impacted by the China slowdown, which she saw as part of the global slowdown, but said nevertheless they were seeing buyers from the mainland at their store in Korea.
“Our bags are high quality — we source the crocodile leather from the same Singapore factory as Hermès — and we get buyers from China, there are many rich people in China. But we are not seeing so many Japanese now because the yen is down so it’s expensive for them,” said Wee.
The foot traffic at the accompanying Materials, Manufacturing & Technology trade show was busier than Fashion Access, but price here was a sensitive issue and there were some scenes of tense negotiations. Since last year’s event raw material prices have declined by about 40 percent to a low in July 2015 and benchmark Texas steers are still about 35 percent off the peak in March 2015 indicating that prices are still treading water.
Speaking at the launch of the three-day fair, Michael Duck, director of APLF, said unfavorable macroeconomic factors have blunted demand for consumer goods, including footwear, with the only except being the car sector which has seen a constant demand for leather. Add to this the slowdown in China, the fact that Russia is still embroiled in economic sanctions with the U.S., Europe and Turkey and its easy to understand why demand for leather continues to be weak despite the attractive prices.
“Economies tend to move in cycles as do commodity and stock prices. The question is — have we reached the bottom of the current economic trough and will demand for leather pick up?” questioned Duck.
APLF, which runs the giant trade shows, said there were 361 exhibitors from 25 countries at Fashion Access and 1,064 exhibitors from 48 countries at MM&T.