HONG KONG — The global economic outlook and rising costs in China put a damper on the 10th anniversary of the Global Sources Fashion trade fair.
The event at AsiaWorld-Expo, which ended Saturday, hosts three shows under one roof — fashion accessories and footwear, fashion apparel and fabrics, and underwear and swimwear. Beginning in 2006 with 500 booths, the fair has grown substantially. This year it attracted more than 1,500 booths with suppliers from Mainland China, India, South Korea, Hong Kong, Taiwan, Thailand, the Philippines and Vietnam, but foot traffic was lackluster.
Many said although the turnout was lower than expected, the quality of buyers was good. Dorian Gabler, business manager at sportswear maker Weyes Clothing Ltd. in Zhongshan, China, said the firm regularly exhibits at the Canton Fair, but this Hong Kong show was a first.
“The quality of buyers is better than Canton,” Gabler said. “We had someone from Zara come to talk to us. If that came off, it would take us to the big leagues. Right now our runs are quite small, so we get everything made in China.”
The quality of the workmanship in China is good, but rising labor costs mean that for bigger orders Weyes would likely shift its manufacturing base. He said he recently visited Cambodia to investigate options.
“China labor costs are rising,” Gabler added. “The workers want to have a better quality of life, they want more time with their families — I get it. But if you want 20,000 T-shirts, you’re not going to get them made in China anymore, you’ve got to go to Vietnam or Cambodia.”
He said he had heard of some brands shifting their manufacturing base from China to Vietnam and installing their China manager in the new operation.
“That way you get the benefit of the China manager’s experience, they know how things should be done and can pass on their expertise,” said Gabler.
Livia Yip, president of Global Sources Fashion Group, said while the low labor costs in places such as Vietnam and Cambodia were a draw for big-order buyers, there are still obstacles.
“In China, costs are rising and margins are getting squeezed,” Yip said. “There is competition from [Association of Southeast Asian Nations] countries, but these places are like China was 20 to 25 years ago. Many of them don’t have good enough English-speaking skills.”
With the aim of bridging the gap and making it easier for buyers to connect to ASEAN sources, there is a special section of the fair designated “ASEAN Select” that this year focused on Vietnam and Myanmar. An ASEAN networking event was also held on day three of the four-day fair.
Yip said as China becomes a more mature economy and living standards rise, it is inevitable that labor costs will increase. She said China might look to the example of Taiwan, which used to be a cheap labor market and has succeeded in keeping its manufacturing industry by specializing and offering higher value products, such as functional fabric.
“China has a lot to offer — good environment, good supply chain, experience and language skills. If you can’t reduce the labor costs, then you must increase the value of what you offer,” said Yip.
She advised Mainland manufacturers to push themselves to improve and innovate. If they don’t, she warned that they may only be around another five to 10 years. She has advice for local [mainland] government as well: “I tell them, ‘You better help promote these companies so they survive or else they will fail and then you will have to deal with the social problems,’” said Yip.
This year’s fair was adapted to meet market demand with a broader range of footwear and functional fabrics and an increased selection of bags and luggage. Two special areas — Young Designer’s Corner and Fashion Technology Corner — introduced high-tech products by fashion entrepreneurs. Two fashion parades on the second and third days of the show featured work by students at the Hong Kong Polytechnic University, Hong Kong Design Institute, Technological and Higher Education Institute of Hong Kong and Taiwan’s Fu Jen Catholic University.
“By connecting the traditional and the new, experienced and the young, Global Sources aims to create a fashion ecosystem to help manufacturers move up the value chain,” said Yip.
The event attracted a number of innovative new products. Jimmy Wang, business director at A&C Fashion in Guangdong, was exhibiting his new, light sports shoes. Weighing just 320 grams each and using the company’s own Flyknit technology, they can be easily and quickly assembled.
“We have already got a lot of interest in this new product. We sell to the China market. For us that is already a very big market, but of course we are also interested in reaching overseas buyers,” said Wang.
Stella Clarke, director of Diamond Sportswear in the U.K., was at the fair en route to the Canton Fair. She said she was impressed with what was on offer.
“There is a very good selection of products, very fashionable. We will be coming back,” said Clarke.