Common Threads | Export Advice for Australian Fashion Brands
During the TFIA’s recent Capability Mission to Hong Kong as part of the Common Threads Project, we asked the team at Brand X - who assisted us with setting up the Showroom Buyer visits, to give their thoughts and recommendations on how Australian fashion brands should present themselves to buyers in Hong Kong.
PRESENTING TO RETAIL BUYERS IN ASIA
Whilst there is a demand for interesting and contemporary brands from Australia, cracking the Hong Kong market takes a lot of persistence and follow-ups. Many buyers will have a 'wait and see' attitude, and wish to see second collections before making an order.
ADVICE FOR APPOINTMENTS
Brands should undertake extensive research into their target retailers and be familiar with adjacent labels and retailer customers. This may include: ex-pat wives and mothers, affluent locals, mainland tourists, young professionals and local students. You should also know your products and the main selling points. This includes:
- Innovative design
- Construction / materials
- Made in Australia
- Notable stockiest in particular international stockists
- Celebrity (huge factor with local buyers)
When presenting your brand, remember:
- Eye catching pieces front and centre
- Merchandising / less is more
- Tell a story on the racks (outfitting)
- Look-books / line-sheets / business cards all easily accessible
- Folders, bags for sales material
- Gifting: Editors / bloggers / buyers are accustomed to being gifted
It is considered polite to exchange business cards so be sure to offer them out to buyers. Remember also to keep it casual and don't feel pressured to make the hard sell. Buyers know what they are looking for and will ask questions after you've outlined the basics.
You should follow up the same day via email and electronic versions of sales material and selected press. If you get a buyer's contact number, Whatsapp is also appropriate. In HK a lot of business is done over Wechat and Whatsapp so make sure you have accounts activated. Wechat is the main social media platform in China, and popular with Chinese buyers. These channels provide a useful tool for brands and showrooms, allowing you to build a following and post new collections that are open to order.
DEPOSITS, SHIPPING, TAX, ETC.
Most HK retailers are happy to pay deposits. A 30% deposit and balance before delivery is standard. Some big department stores will offer consignment terms or 60 days from delivery.
Most HK retailers will be happy to pay for shipping ex-works from Australia or China. Alternatively, brands will pay for shipment to a local showroom where retailers will collect in person.
TAXES & TARRIFS
There is no import tariff into HK though China has 17.5% VAT paid on entry into mainland. It is therefore best to either include VAT in the WS price or request the retailer pay this cost. A new AUS-CHI trade agreement may see this lifted.
SS16 budgets remain open until the end of October. It's generally best to catch buyers at the start of September before many of them travel to NY, London, Milan & Paris. The end of October is also suitable as many return to Asia for Shanghai Fashion week in mid October.
For HK retailers: 90 days from order confirmation to collection delivery at the end of Jan at the latest. For China retailers: 60 days from order confirmation as they are used to ordering stock from distributors.
OPPORTUNITIES FOR FUTURE SEASONS
- Create a retail target list and follow-up your leads directly. This can save money on agency fees and a recomended method for the HK market where English is commonplace.
- Engage a wholesale agent or a distributor for HK and China. Such will generally have a seasonal or yearly retainer and take a 10-30% sales commission depending on what services they can offer you. Generally agents/distributors will sell your brand in their showrooms and at large selling events in China, which could prove difficult on your own unless you can speak mandarin or have access to a translator.
- It is highly advisable to work with local bloggers to promote your entry into the market. Dealing with Instagram/bloggers directly is effective, and cheaper than paying local PR agency retainer fees.
- Sell to consumers at events like pop up stores and markets in Hong Kong. This acts to generate sales, get feedback on price point/aesthetics and promote your online platforms.
If you'd like to find out more about Brand X you can head to their website here. Be sure to also have a look over on the TFIA website for more export advice!