Overview




Textile quotas ended up eliminated amongst WTO associates on the to start with working day of 2005 in accordance with the Settlement on Textiles and Garments (ATC). Having said that, resistance to quota elimination unfold within the US and EU. Subsequently, China arrived at agreements using the EU and the US in June and November 2005 respectively. The China-US agreement, helpful from January 2006, governs the exports of the total of 21 teams involving 34 categories of Chinese textiles and garments products to the US throughout 2006-2008. The China-EU agreement, efficient from June 2005, addresses 10 groups of Chinese textiles and garments exports on the EU throughout 2005-2007.




On the flip side, the mainland and Hong Kong agreed in October 2005 to more liberalise the mainland marketplace for Hong Kong businesses underneath the third stage from the Mainland and Hong Kong Closer Financial Partnership Arrangement (CEPA III). Along with other products of Hong Kong origin, the mainland agreed to present all goods of Hong Kong origin, including clothing goods, tariff-free remedy starting from 1 January 2006. In line with the stipulated techniques, items that have no current CEPA procedures of origin, will appreciate tariff-free cure upon programs by nearby makers and on the CEPA rule of origins currently being agreed and achieved.




Hong Kong garments companies are reliable for ODM and OEM creation. They are able to provide high-quality apparel posts to put it briefly lead time, as overseas importers and stores request garments suppliers to tighten up supply chain management to make sure the ordered items reaching the store ground in the appropriate time. Increasingly, Hong Kong clothes providers, the established ones particularly, have revealed enthusiasm for brand name advertising.




Hong Kong's full exports of apparel rose year-on-year by 9% while in the to start with eleven months of 2005. When Hong Kong's re-exports of apparel rose by 20%, domestic exports fell by 14%. In the to start with 11 months of 2005, Hong Kong's outfits exports towards the US and EU rose by 11% and 18% respectively. While Hong Kong's outfits exports to Japan levelled off, all those on the Chinese mainland declined by 11%.




Market Options




The clothing sector is actually a key manufacturing sector of Hong Kong. Its gross output is without doubt one of the maximum amid all manufacturing sectors, amounting to HK$35.nine billion in 2003. It's the largest manufacturing employer in Hong Kong, with 1,673 establishments choosing 28,752 staff as of June 2005. It's also the main earner with regards to domestic exports, taking up 40% with the whole within the initial 11 months of 2005.




Hong Kong's geographic boundary hasn't constrained the development from the forward-looking apparel business. The majority of clothing brands have established up offshore creation amenities in an try to cut back procedure expenditures. Relocation of generation facilities offshore has having said that resulted inside of a continuous drop within the quantity of clothing brands in Hong Kong.




Hong Kong will not be just a foremost manufacturing centre and also a hub for clothing sourcing globally. Providers undertaking garment trade in Hong Kong are knowledgeable in fabrics procurement, revenue and internet marketing, high-quality manage, logistic preparations, clothes layouts and international and national guidelines and polices. The professionalism they command along with the blended companies offered will not be easily matched somewhere else. That has a full of fifteen,a hundred ninety institutions selecting 95,889 staff, they kind the most important team involved with import-export trade in Hong Kong.




Efficiency of Hong Kong's Exports of Clothing




Hong Kong's full exports of outfits rose year-on-year by 9% within the initially eleven months of 2005. While Hong Kong's re-exports of apparel rose by 20%, domestic exports fell by 14%. The contrasting effectiveness of Hong Kong's re-exports and domestic exports was generally ascribed for the increasing relocation of garment production towards the Chinese mainland, resulting within the removing of quotas underneath WTO's Arrangement on Textiles and Garments (ATC). Although the declining pattern of domestic exports has actually been reversed to some degree in recent months, resulting from the re-imposition of quantitative restraints on mainland-made textiles and garments via the US and EU.




Retail sales while in the US held agency inside the initially eleven months of 2005, climbing by just about 6% in the similar time period while in the past year. From the to start with eleven months of 2005, Hong Kong's clothes exports into the US rose year-on-year by 11%.




From the very first eleven months of 2005, Hong Kong's overall garments exports for the EU surged year-on-year by 18%. Outfits exports to big EU markets like France, Germany and Italy recorded progress costs in surplus of 20%.




On the flip side, Hong Kong's outfits exports to Japan levelled off inside the first 11 months of 2005 partly on account of the development of immediate shipment. Within the back again of your growing income even so, Japanese customers are inclined to resume their paying spree on high quality garments products. Meanwhile, Hong Kong's apparel exports towards the Chinese mainland dropped by 11% in the very first eleven months of 2005, in contrast with all the same time period last 12 months.




Product-wise, Hong Kong's exports of woven have on rose by 12% from the to start with eleven months of 2005. When woven have on for women/girls grew by 13%, all those for men/boys recorded a advancement of 8% within the exact same interval within the preceding calendar year. Knitted have on grew by 2%, with women/girls and men/boys rising by 1% and 6% respectively. While clothes accessories declined by 3%, other clothing posts, for his or her part, elevated by 13%.




Profits Channels




Hong Kong's apparel makers have cast sturdy interactions with their shoppers. They are able to understand and cater with the choices of pretty broad purchaser bases. Exporters even have great understanding of intercontinental and countrywide policies and laws governing garments exports, these kinds of as guidelines of origin, quota limits, tariff prices and documentation prerequisites. Slice, make and trim (CMT) preparations are popular though many Hong Kong makers have moved to bigger value-added things to do this kind of as style and design and brand improvement, top quality handle, logistics and substance sourcing.




A number of well-established neighborhood makers have entered to the retailing small business, both locally or in abroad marketplaces. A lot of them have retail networks in main cities all over the entire world which includes Beijing, London, Big apple, San Francisco, Shanghai, Singapore, Sydney, Taipei and Tokyo. Some well-known producing shops consist of Baleno, Bossini, Crocodile, Episode, Esprit, G-2000, Giordano, JEANSWEST, Moiselle and U-2.




Being a world wide sourcing hub in Asia, Hong Kong draws in a number of international buying and selling houses and major stores. Purchasers sourcing from Hong Kong involve American and European malls (e.g. Macy's, JCPenney, Federated, Karstadt Quelle, C & A), discount outlets (e.g., Sears, Target and Carrefour), specialty chains (e.g., The Gap, The Limited) and mail order homes (e.g. Otto and Great Universal Suppliers). A lot of international quality designer labels -- this kind of as Calvin Klein, Donna Karen, Ralph Lauren, Tommy Hilfiger and Yves Saint Laurent -- source clothes in Hong Kong through their buying offices or other intermediaries.




Hong Kong's fashion designers have been gaining worldwide reputation for his or her professional expertise, sensitivity to current trends and ability to blend commercialism with innovation. Medium to high-priced fashion clothes bearing Hong Kong designer labels is staying sold/have been sold in renowned department

shops abroad this sort of as Bloomingdale's, C & A, Harrod's, Isetan, Macy's, Marui, Mitsukoshi, Nieman Marcus and Seibu.




Trade fairs and exhibitions remain prevalent places for purchasers and suppliers of clothes to congregate. To establish connections and explore market opportunities, Hong Kong companies and traders have associated themselves actively in global shows led through the Hong Kong Trade Growth Council (TDC), like the types in Beijing, Chengdu, Dalian, Dubai, Dusseldorf, Hong Kong, Moscow, Mumbai, Paris and Tokyo. 'Hong Kong Fashion Week' is organised twice a yr and appeals to intercontinental suppliers and consumers to participate from the exhibition. Organised by TDC, 'World Boutique, Hong Kong' would be the 1st independent event in Hong Kong dedicated to promoting designers' collection and brands from all-around the earth.




Marketplace Trends




Changes in retail landscape: While in the US and EU, large-scale merchants are undergoing drastic restructuring and consolidation, particularly, the growing prominence of hypermarkets these as Wal-Mart. To strengthen competitiveness, Sears and Kmart have merged to type the 3rd greatest retail group within the US.




Growing importance of private labels: Private labels, in essence, have become an more and more canada goose dawson parka.html effective marketing tool among the garment suppliers. In order to differentiate as very well as upgrade the image of their goods, big suppliers have started to put a stronger emphasis on their own labels. According to Cotton Incorporated, private labels accounted for 45% of total US clothing gross sales in 2003, up from 39% in 2001. In some adult attire types, these types of as skirts, private labels accounted for as high as 76% of the full product sales. It is also estimated that 45% of products and solutions sold inside the EU are sold below private labels. Renowned suppliers these as H&M, Marks & Spencer, Orsay, Palmers, Pimkie, Springfield and Kookai have owned their private labels. As customers desire to have private labels on everyday garments like jeans, equipment and T-shirts, the doors are also open into the offer of these outfits objects to private label owners.




Growing interest in China's domestic market place: The rapid expansion of mainland's economy has attracted great interest of Hong Kong clothing companies to explore its clothes current market. A TDC survey on mainland's garment shoppers indicates that Hong Kong brands are ranked quantity one particular from the respondents from the mid-range segment. Although international brands are most preferred during the high-end segment, mainland brands dominate the low-end. In addition, exactly the same survey finds out that inside the eyes of mainland consumers, Hong Kong firms are incredibly strong in casual use, as they are generally of excellent design and top quality. In essence, lots of mainland consumers have developed a stronger awareness of Hong Kong brands through tour to and shopping in Hong Kong. Therefore, Hong Kong's casual dress in has successfully projected a positive image to mainland shoppers.




CEPA




On eighteen October 2005, the mainland and Hong Kong agreed to even moschino teddy bear bag further liberalise the mainland market for Hong Kong companies beneath the third section of the Mainland and Hong Kong Nearer Financial Partnership Arrangement (CEPA III). In conjunction with other solutions of Hong Kong origin, the mainland agreed to present all items of Hong Kong origin, which includes apparel items, tariff-free remedy starting off from one January 2006. In keeping with the stipulated methods, solutions which have no current CEPA regulations of origin, will take pleasure in tariff-free treatment on purposes by regional makers and upon the CEPA rule of origins getting agreed and met. But non-Hong Kong produced apparel goods will remain subject to tariff prices of 10-25% when entering the mainland.




The promulgated regulations of origin for garments things to benefit from CEPA's tariff preference are essentially similar into the present policies governing Hong Kong's exports of these merchandise. Generally speaking, the principal producing process of cut-and-sewn garment is sewing of parts into garments. If linking and/or stitching is/are required, such process/processes must also be done in Hong Kong. For piece-knitted garment, if it is manufactured from yarn, the principal process is knitting of yarn into knit-to-shape panel.




If the piece-knitted garment is manufactured from moschino wallet knit-to-shape-panels, the principal process is linking of knit-to-shape panels into garment. If stitching is required, it must also be done in Hong Kong.




Trade Measures Affecting Exports of Outfits




As outlined by the ATC, textile quotas have been removed amongst WTO users with the initial working day of 2005. However, resistance to quota removing unfold during the US and EU. Particularly during the US, China-specific safeguards on ten types of apparel items from China ended up invoked. Against this background, China reached agreements with the EU as well as the US in June and November 2005 respectively.




The China-US agreement, powerful from January 2006, governs the exports of a total of 21 groups involving 34 types of Chinese textiles and outfits merchandise to the US through 2006-2008. It allows an annual progress of 10-15% in 2006, twelve.5-16% in 2007 and 15-17% in 2008. The China-EU agreement, effective from June 2005, provides for an annual progress of 8-12.5% in ten groups of Chinese textiles and apparel exports into the EU throughout 2005-2007. In addition, both EU and US agreed to exercise restraint in invoking China-specific safeguard against Chinese textiles and garments that aren't covered from the agreements.




Product or service Trends




Formal Dressing: Whilst casual dress in accounts for that bulk of apparel sales, a general trend towards stricter corporate dress codes has led to a climbing demand for formal dressing, particularly suits. In line with a survey by Cotton Incorporated in late 2004/early 2005, 38.5% of respondents believe that people dressed too casually at work. This can be a 6.5 percentage point increase over a similar year-ago.




Teenager: Certainly one of the key driving forces of apparel market appears to be the teenagers from the coming years. The quantity of teenagers from the US expects to increase from 31.six million in 2001 to 34.one million in 2010. A recent survey by Teenage Research Unlimited found that teens are saving money by benefit shopping. Even though JCPenney is their favourite section keep, Target and Wal-mart are their favourite hypermarkets. In addition, Old Navy is their choices amid specialty attire suppliers.




Silver Marketplace: Ageing population becomes a prevalent phenomenon in many developed countries in Europe as nicely as Japan plus the US. Elderly people constitute a serious current market segment called 'silver market'. Supported by savings, social security benefits and pensions, lots of elderly people have rather solid paying power. It can be estimated that the age group of 65 calendar year and above accounted for about 21% of Japan's consumption expenditure in 2000. A survey conducted with the Japanese government also shows that people who are 60 years old and above possess almost three times the financial assets of these in the 40-50 age group. Within the US, all those aged at or above 65 amounted to 18.one million in 2001, and the quantity is expected to swell to 26 million in 2015.




Plus-size Industry: The plus-size market place has actually been an area of advancement for several years, plus the development is expected to continue while in the coming future. It can be estimated that 65 million women inside the US use size fourteen or above. This team represents one-half on the US female population. It truly is reported that some renowned brands have already responded for the pattern by offering products of larger size; these firms include Liz Claiborne, Ralph Lauren and Tommy Hilfiger.




Easy-care Clothes: Clothes built of stain-resistant and wrinkle-free fabrics are properly received in the current market. It is actually estimated that about a quarter of clothing is now designed of easy-care materials, and its popularity is expected to continue from the next handful of years. Although big apparel brands like Dockers and Liz Claiborne have already marketed extensively easy-care clothes, main hypermarkets, like Wal-Mart, also offer more products of this kind of quality.




Source: Hong Kong Trade Advancement Council




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