HONG KONG — After being hard hit by the global economic downturn in their traditional markets, exhibitors at the APLF Fashion Access fair said they are setting their sights on expanding into the Chinese market.

This story first appeared in the October 20, 2009 issue of WWD. Subscribe Today.

The footwear and accessories fair, held at the Hong Kong Convention & Exhibition Center from Oct. 6 to 8, featured 354 exhibitors. The show’s organizer declined to release attendance figures.

Vicky V. Amalingan-Sales, chairman and marketing manager of Philippines-based woven handbag and clutch brand S.C. Vizcarra, said 2009 has been a difficult year.

“About 80 percent of our business comes from Japan, but this year we’ve seen a 50 percent drop in sales,” said Amalingan-Sales. “We’ve had to cut our prices by 10 to 15 percent to attract more customers. We can only hope things will get better next year, but we don’t see things picking up anytime soon.”

Price cuts have not been uncommon given the economic climate, and some have compromised on quality in a bid to stay in the game. Sally Chang, North America sales manager of Canadian handbag brand Gaya, said 30 percent of its retail clients have dropped their line since April.

“As a result, we’ve had to look at using cheaper materials,” said Chang. “In fact, we’ve removed all leather products from our upcoming summer collection to concentrate on vinyl synthetic totes and bags. At this point, we don’t know when things will pick up.”

Companies like Los Angeles-based leather handbag label Blue Elegance have adopted the opposite strategy. Owner Annie Lin said during periods of economic difficulty it was crucial for product to stand out in order to maintain sales.

“This year has actually been a very good year for us,” she said. “Instead of cutting back costs, we’ve invested more in sourcing higher quality leather and studs. Improving the quality of our products has really paid off and the response from our North American clients, which range from department stores to boutique retailers, has been incredibly positive.”

Handbags with distinctive hardware and embroidery such as studs, chunky buckles and sequins spurred the most buyer interest, as did small leather accessories in pastel lilac, wisteria and mauve.

Many handbag and accessories companies are also looking to enter the Chinese market as part of a strategy to offset dwindling demand from Europe.

Catherine Ma, a sales representative with Nu Design, which produces and exports small recyclable leather goods, said the year had a fairly slow start but started to pick up after May.

“Europe, our biggest market, was very badly hit. They were quiet for about six months,” said Ma. “We’re lucky we’re a small- to medium-sized factory that we can afford to be cost cautious. Factories operating on a larger scale were hit worse. That said, we are looking to enter the China market, but with caution.”

Despite the lure of the Chinese market, Ma said she was aware the brand must lay the groundwork to enter the country under the best circumstances possible.

“I know how lucrative the Chinese market can be, but we don’t want to jump into it,” she said. “We have to find the right partner and the right department stores that can represent our brand successfully. There are also pricing and taxation issues to consider.”

Matthew Chow, managing director of C-Corp International Co., a handbag manufacturer and distributor to Europe and the U.S., said the firm is also looking to enter the Chinese market.

“The problem with China is that it can take much longer to get anything done there as there is a lot of red tape involved,” said Chow. “A lot of people have lost a lot of money trying to crack China, but I believe if you push through, it can be worth it in the long run.”


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