RECAP | The China Fashion & Retail Forum
Last month the Australia China Business Council (ACBC) and the Australia China Fashion Alliance (ACFA) hosted the China Fashion & Retail Forum in Sydney at the Museum of Applied Arts and Science (Powerhouse). The full day Forum was the first major event in Australia dedicated to helping the Australian Fashion and Retail industry access the China market. Industry speakers included TFIA’s own Dave Giles-Kaye and Editor of Vogue China, Angelica Cheung.
The Forum provided an amazing platform for the sharing of ideas centered on the Australia-China Fashion & Retail industry. The day highlighted opportunities for collaboration and market potential on both sides. Speakers also confirmed China's position as a mature industry and as one that Australia can learn from. A big thank you to the event organisers, sponsors, speakers and attendees for making the forum such a success!
For those who missed out, here is a recap of Dave's talk on TFIA engagements in China:
TFIA ENGAGEMENTS IN CHINA
The TFIA is a collaborative organisation. We bring companies together around key industry concerns, concerns that cannot be solved by one company on their own. These include issues around ethical supply chains, skills development, standards, government regulation and developing an Australian industry identity. We also wish to be collaborative ourselves, to work closely with other organisations to cater to all aspects of our industry, believing that we are in a key position to help strengthen Australian fashion businesses byworking together.
There are obvious reasons why the Chinese market is very attractive to Australian labels. Yet, with some exceptions, it has taken our industry some time to understand the opportunity and the synergies with our colleagues in Asia. Perhaps for the last few decades we have seen China as a manufacturer only and not recognised the emergence of a large and vibrant consumer market. This is changing. We, at the TFIA, are hearing this from our members and we are hearing it from our new partners in China. There is a desire on both sides to connect Australian fashion labels to the Chinese consumer.
SO HOW DO WE DO THIS?
There are two key building blocks to entering any new market with any product, and developing a strong presence with the consumer in China for Australian fashion brands is no exception. We must:
- Understand the environment we hope to sell into.
- Develop the capability to deliver into that environment.
UNDERSTANDING THE MARKET | SHANGHAI DELEGATION
One of the ways companies collaborate at the TFIA is to come together for industry strategy development. During a recent workshop, focused on growing Australian fashion businesses, we discussed what the collective brand value of 'Australian Fashion' is, and what are the overseas markets where this would be most valued. We decided we wanted to understand more about our opportunity in China, and in particular Shanghai. Where does Australia stand with the consumer there?
Understanding the market environment is a complex task that involves considering consumer segmentation and trends, distribution channels, regulations, and more. With this in mind, we partnered with the Swinburne Design Factory and META (a program of the Department of Industry) to send a delegation to China and to Europe to explore this further. The delegates were an eager group of design and business students from Swinburne University.
The focus was on consumers’ response to the retail experience and on how Australian labels could fit in there. The results were broad and interesting and covered marketing, distribution and brand discovery elements.
- In Shanghai it was found that the consumer looks for product that is both genuine and value for money. They will not buy a product that is seen as cheap.
- Some store owners described the Shanghai consumer as introverted, not so social. This of course should influence store design, perhaps with focus on content rather than the social experience.
- Designed and made in China is important to the consumer, perhaps an obstacle to new overseas brands, but also perhaps an opportunity to develop a stronger supply chain in China.
- The trend of sustainability is emerging, particularly around organic and carbon footprint but not so much with recycling as it is seen as using cheap labor and dirty materials.
- Lastly it was found that the Shanghai consumer was more influenced by off-line advertisements (magazines in particular) than their counterparts in Europe, whose greatest influences were chance contact with a brand and word of mouth.
DEVELOPING AUSTRALIAN CAPABILITY | COMMON THREADS
In 2015, in partnership with Austrade, as part of their Asian Business Engagement Plan, TFIA ran the Common Threads project with the ultimate aim of taking Australian fashion businesses along the pathway to establishing a presence in Hong Kong. This was a three step process and took place over the year.
THE PITCH | Companies demonstrated their capability in branding, operations and product offering. We also looked for an awareness of the challenges ahead and a high level of sophistication to then help them take the next step. Eleven companies were chosen from across Australia including B.Serious, Vigorella, Morgan Marks and Roman and Ludmila.
EQUIP | TFIA developed a series of seminars for the companies to attend, focusing on readying them for doing business in Hong Kong. The seminars covered understanding the Hong Kong environment (culture) for carrying out business, developing the operation and logistics aspects and planning for a market launch.
THE MISSION | This took place in August last year and included activities that connected these businesses to the local industry in Hong Kong. This included showroom events, meetings with buyers, connecting with local media, Hong Kong government bodies and Australian resources in Hong Kong, such as Austrade.
OUTCOMES FROM COMMON THREADS
- Some of the companies that had previously shown their product in Hong Kong, said showing as a group made the experience more rewarding and allowed the Australian brand factor to play a key role in the way they presented their collections.
- Others came back with the realisation that they needed to work on their range, different colour ways for example that resonated with the Hong Kong consumer.
- Relationships were built with supply chain partners and logistics companies.
- Opportunities were also uncovered between the delegate companies resulting in some partnering in business back in Australia and plans for collaborating in their export activities.
- Some decided that Hong Kong was not for them, remaining focussed on Australia or other overseas markets.
- And, some came home with orders in their books.
The aim of this exercise was not simply for the companies to take orders before they left. It was about building understanding and capability in tackling an overseas market in Asia.
NEXT STEPS FOR OUR INDUSTRY
CREATING A BETTER UNDERSTANDING OF THE MARKET ENVIRONMENT
- Foster further collaboration between companies who are already doing business in China and those who wish to. Share learnings, collaborate in operations and perhaps in-country activities.
- Build a formal network between the Asian textile fashion organisations within our region to develop a collective understanding of our markets and to foster connections between the companies operating in them.
- Conduct further work in understanding the consumer in China.
- Define how 'Australian Fashion' relates to the Chinese consumer and it's value beyond the clothing label.
- Branding | We need to understand the differences in selling in China and leveraging off an Australian identity. We also need to help our labels develop their own branding in relation to the Chinese consumer.
- Operations | For some companies China might be their first overseas market and bring a whole range of new challenges for them. Others may have exported to Europe or the US before and will also face challenges of setting up their operations.
- Training | Skills development is critical to growing our exports. This includes identifying areas where there are skills shortages in Australia as well as lifting the skills that we have.
- Missions | Further projects like Common Threads, that both develop capability and connect Australian companies to export opportunities.