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| Industry insiders discussing future development of Hong Kong textile industry at the Evolving Fashion Forum |
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Even though Hong Kong has moved most of its manufacturing activities to mainland China and other Asian countries, where production costs are lower, the city still holds an advantageous position in the textile and garment industry, according to industry insiders speaking at the Evolving Fashion Forum held during the recent Interstoff Asia Essential.
Providing added values
For Hong Kong textile and garment manufacturers, the FOB (Free On Board) costs have continued to increase due to the spiraling costs of raw materials and labors as well as the unfavorable currency exchange situation, noted Dr Harry Lee, Chief Executive Officer of TAL Apparel Ltd, one of the leading garment manufacturers in Hong Kong, while reaffirming Hong Kong's important position. (FOB designates at which point the official transfer of ownership will take place between buyers and sellers of goods and who is to pay the shipping costs.)
"Hong Kong is a higher cost base, and it is difficult for Hong Kong manufacturers to reduce the FOB costs," he said. Some manufacturers are shifting their costs to customers by raising the IMU (Initial Mark-Up) or by moving their production to other countries. But Dr Lee suggested manufacturers look thoroughly at their entire product life cycle to find out the root-causes. In addition, they should strive to provide more value-added services.
He explained that in terms of service, manufacturers can look at customers' entire product life cycle from design, product development and procurement, to manufacturing, logistics and inventory management.
He emphasized, "It will be our job to create new, innovative products to help customers to differentiate from their competitors. It is also noteworthy that we should work on providing extra values for products instead of focusing on reducing the price."
A window to China
"China is a huge market to be reckoned with and Hong Kong is a window to this market," said Shirley Chan, Chief Executive Officer of YGM Trading Ltd, a marketer and builder of international apparel brands in Asia. She remarked: "If you want to introduce your brands to the China market, Hong Kong is an important platform."
Also the Chairman of the Hong Kong Brand Development Council, Ms Chan discussed possible ways to facilitate trademark registration in China. She said that the council had talked to the Chinese government about registration of one trademark for the whole China.
"In Europe, if a company registers a brand in the EU community, the trademark would be recognized in some 20 countries. We can do something like that - this will be a lot easier for people who want to enter the China market. It would be more convenient if the trademark could be used in Hong Kong, China, Macau and Taiwan as well."
On Hong Kong's development in the textile and apparel industry, Ms Chan believes that the city is poised to be a super servicing center due to a number of favorable factors.
She stated that Hong Kong has sophisticated legal system for protecting intellectual properties, quality lab testing service as well as good sense of design and innovation. Also, Hong Kong is a preferred hub for global sourcing, with the presence of professional institutes and industry associations.
"Hong Kong is where east and west meet. It also performs the role as the middle-man to promote international brands to the China market, and vice versa," she said.
Her views were echoed by Felix Chung, Chairman of the Hong Kong Apparel Society, who predicted that Hong Kong would be a super servicing center within the next 10 years.
He pointed out that many international high-end brands are eyeing Hong Kong because of its proximity to China. "Since last year, many overseas brands were having their IPOs (Initial Public Offerings) in Hong Kong; two international high fashion brands are presently queuing to get their IPOs here. It is because they [the fashion brands] are targeting the China market," he said.
Highlighting the paramount importance of fashion talent, he suggested that local educational institutes should include more fashion-related subjects, such as fashion trends and fashion marketing, in their syllabus.
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