Dhaka, Sunday, 18 August 2019

Positive sales predicted for apparel industry despite US-China trade war

Positive sales predicted for apparel industry despite US-China trade war

Special Correspondent: In face-to-face interviews conducted with 234 buyers and 72 exhibitors, Centrestage, a fashion brand-promotion, launch platform and trade exhibition organised by the Hong Kong Trade Development Council (HKTDC) noted that many industry players are optimistic about their sales prospects over the next 12 months. Around, 87 per cent buyers and 91 per cent exhibitors expected their sales to either remain steady or increase over the next 12 months. Around 58 per cent of the buyers expected the retail price of their products to remain stable in 2019 while 31 per cent expected them to increase and 11 per cent foresaw a decrease.

Around 38 per cent exhibitors expected retail price of their FOB products to increase, compared to 17 per cent noted in the 2017 survey; while only 8 per cent of them expected them to decrease versus 13 per cent last year. Casual wear attracted the highest level of endorsement from both buyers and exhibitors followed by fashion accessories.

Sourcing and production costs to increase

Around 45 per cent buyers expected their sourcing prices and production costs to increase, while 51 per cent anticipated them Positive sales predicted for apparel industry despite US China trade war 002 to remain unchanged. Only 4 per cent, however, predicted a decrease. Among exhibitors, 75 per cent expected their production costs to increase, while none expected a fall. Around 60 per cent exhibitors, among the traditional markets, Japan and Taiwan have the greatest potential for growth in 2019, followed by Hong Kong, South Korea, Australia and Pacific Islands. Chinese Mainland continued to receive the biggest endorsement as the emerging market from exhibitors followed by ASEAN countries and the Middle East.

No impact of Sino-US trade war

As apparel and made-up textiles (of HS chapters 61 through 63) are not included in any of the currently effective US 301 tariff lists, 68 per cent buyers and 71 per cent exhibitors did not expect the US-China trade war to have any significant impact the export performance of their products. While around 30 per cent of buyers and exhibitors expected a negative impact.

Optimal Product Development Strategies

Around 47 per cent respondents noted ‘crossover/joint promotions’ to be the most effective product development strategy in the coming year. This was followed by ‘celebrity or key opinion leader-endorsed fashion collections’ and ‘limited edition collections’. Among buyers, the next most important strategies were ‘brand-licensing products’ and ‘collections made from new materials’ while exhibitors believed ‘collections made from new materials’ and ‘sustainable fashion’ to be most effective product development strategies for 2019.

E-tailing to add 40 per cent of sales revenues

Exhibitors also voted for e-tailing as an effective product development strategy. On an average, e-tailing accounts for 40 per cent of the total sales revenue of fashion companies with an e-commerce presence. As per this year’s survey results, half of the respondents currently engaged in e-tailing. Of the companies currently engaged in e-tailing, 61 per cent sourced from Mainland China, followed by Hong Kong, Japan, South Korea and the ASEAN countries.

Of the companies currently not engaged in e-tailing, 29 per cent plan to start selling online within the next two years, a rise from the previous year when only 19 per cent respondents showed such an intention.