HONG KONG — Not all companies are rushing into China to sell their goods, though it might be tempting, since an estimated 18 percent of the country’s 1.3 billion people are considered middle class.
Hong Kong’s Jibsen, which manufactures handbags, has an interest in China, but for now, its prices are too high for the market, said merchandiser Wendy Hui.
“China requires a new setup with style, price point and management,” Hui said.
Jibsen was an exhibitor at Fashion Access, which ended its three-day run Oct. 6 at the Hong Kong Convention & Exhibition Center. The fair focuses on handbags, footwear, travelwear, leather garments and small leather goods.
For the time being, Jibsen exports only to chain and department stores, such as Nordstrom. Most of Jibsen’s customers hail from New York, which helps to explain why it has a showroom there and a head office in New Jersey. The remaining 40 percent of the company’s clients are mainly from Spain and Germany, Hui said.
The 15-year-old Hong Kong company has one factory in China and is planning to open another in early 2007. There are 40 people working in its office here and about 1,000 working at its factory in China. It sources leather and PVC mainly from South Korea, some from China, Hui said.
Jibsen was one of 500 companies from 27 countries and regions to display their goods at Fashion Access, which was organized by Asia Pacific Leather Fair Ltd. and managed by CMP Asia.
Competing with the lower-priced Chinese products on European turf makes business difficult for Michelle, which specializes in fashion bags made of canvas and PVC. Based in Guangzhou, China, a city in the south, Michelle has a small representative office in Italy. Its clients are mostly from Europe, but there are some from the U.S. and Australia, said representative Maurizio Bacchi, who splits his time between China and Italy.
The selling point for Michelle is the “relation between quality, fashion and price,” he said, adding it strives for fashion at a low price. Wholesale prices range from $3 to $12.
In this range, it might seem like Michelle could be directly hit by the low-cost Chinese shops entering the European market. However, while those stores might have low prices, “they cannot really have nice style, nice fashion,” Bacchi said. “We try to make fashion.”
Michelle has two factories in China; 30 people make samples at one and 300 focus on manufacturing at the other. Another three Chinese factories work for the firm.
The company has no clients in China and prefers to export, Bacchi said, in part because documentation can be complicated when dealing with China.
Hong Kong’s Studio 1601, which offers leather goods such as handbags and shoes, isn’t looking for Chinese retailers to do business, said Krista Lee, business development manager. Nevertheless, the company did meet with potential customers from China during the fair, Lee said, adding business was good at Fashion Access because people were quick to make decisions.
The reason is twofold for not entering the Chinese market in a big way: The company would like to wait for the market to mature and a partner in the company has a retail chain consisting of three stores in Guangzhou, which gets first dibs on the market.
“The opportunity isn’t huge for us” in China, Lee said. Part of the issue is price. Shoes from Studio 1601 go for $24 to $35 wholesale.
Most of the company’s business is done with wholesalers from around the world. About 50 percent are from Southeast Asia and 25 percent each from the U.S. and Europe. The company has two factories in China, one for shoes and another for bags.