Common Threads | Top Tips for Export
Are you Export Ready? These 'Top Tips' are an excellent starting point to get you thinking about your business and how to take it beyond Australian Bordersders...
BRAND | X : tfia common threads report
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. This included the following information:
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
SHOWROOM ADVICE | 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.
FOLLOW UPS | 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.
TRADING TERMS | 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.
SHIPPING | 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.
ORDERING DATES | 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.
DELIVERY DATES | 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.
THYVANE | Roger Ouk
GET YOUR PRODUCT RIGHT | Roger articulates the importance of developing your product to a high level, in terms of design and quality, before seeking to enter the Hong Kong market.
RISE ABOVE THE NOISE | There is a lot of competition in Fashion & Textiles in Hong Kong. But with the right product at the right time and the correct approach to launching, there is a lot of opportunity for uptake.
DEVELOP A LAUNCH STRATEGY | From Roger’s personal experience in Hong Kong, he stresses the value in a tailored launch event. Whether this takes place online, at a gallery, retail outlet, showroom or other, engaging in a launch specifically developed around your brand and product is invaluable.
COLLABORATE | Collaborating within or across industries can be instrumental in developing yourself and your brand as well as increasing potential consumer reach.
APPAREL & TEXTILE INDUSTRY GROUP | Paula Rogers
BUILD YOUR NETWORKS | Paula conveys the importance of making real connections in industry in Hong Kong. This is an exercise in building relationships with individuals and should be authentic, not contrived and not pushy. Paula suggests building a relevant Linked In profile and participating in industry events.
RESEARCH | Information should be garnered from many avenues to gain a thorough understanding of industry and consumers in different contexts. Some suggestions for where to start includewww.wwd.com, www.drapersonline.com, www.style.com,www.businessoffashion.com, www.wgsn.com.
KNOW WHAT IT TAKES | Conducting business internationally takes significant time management, and commitment. Paula supports the idea that your domestic market should be strong before seeking offshore markets. Businesses should engage in extensive planning for export and develop thorough knowledge and skills on the topic in order to be successful.
HONG KONG TRADE DEVELOPMENT COUNCIL | Toni Wade
UNDERSTAND THE MARKET FOR BUSINESS | Hong Kong can be considered the trading hub of Asia with a population of 7 million with visitor arrivals to HK more than 7 times the population, reaching 54.3 million in 2013.
- Approximately 70% of visitors came from Mainland China; they spent more than USD18 billion buying consumer goods in HK in 2013.
- HK has ranked the freest economy in the world every year since 1995, and is ranked in the top 20 countries as having the lowest perceived levels of corruption.
- The island is independent from the mainland by the common law system
- Rule of Law – legal protection for contracts and intellectual property; strong IP laws to protect brands
- An international arbitration centre, with arbitral awards enforceable on the mainland
- English is the main language for business and legal documents
- Convertible currency, linked USD
- Free flow of information
- Level Playing firled for local & international businesses. No barriers of access to market by foreign businesses
- Diverse international workforce with business expertise
- Low and simple tax
GUANXI | Loosely translated, Guanxi means connections or special relationships. All initial business communications begin with the exchange of business cards, offered and accepted with both hands, the information on the card should be quickly acknowledged before returning to conversation.
UNDERSTAND THE CONSUMER | Shopping is a past time in Hong Kong. Retailers trade from 11am to 11pm and shoppers are savvy and brand aware. With a healthy economy there is a high expendable income and target markets could include local and ex-pat communities (there are 90,000 Australians Living in Hong Kong).
- Online shopping has become increasingly popular in Hong Kong and the Chinese mainland. China Internet Network Information Centre (CCNIC) cites that there are approximately 300 million online shoppers in China (49% of the overall internet population). With apparel (including footwear and headwear) accounting for the biggest share of the online spending, nearly 82% of the online shoppers purchased clothes online last year.
- There is a growing variety of online shopping options, like Tmall –www.tmall.com , social media platforms and mobile shopping apps
- Consumers are becoming more environmentally and socially conscious, retail sales of organic cotton, bamboo products etc. are growing. Clothing manufacturers are certifying to standards such as the Global Organic Textile Standard (GOTS)
DEVELOP YOUR BRAND | Establish a website, engage with social media, tell your story, convey your unique brand qualities. Gain endorsements and determine who your customer is.
HKTDC IS A VALUABLE RESOURCE | With more than 1.5 million registered buyers, 120,000 quality suppliers, over 12 million monthly page views and over 20 million buyer enquiries generated annually, some of their support and services offered by HKTDC include;
- Complimentary Business Matching with a list of distributors & agents supplied
- Customised Business Matching with specialised service providing up to three confirmed interested business partners
- HKTDC is Hong Kong’s largest Trade Fair organiser. They organise more than 20 international trade fairs in HK each year that attract buyers from around the globe
- Products and services listing online at www.hktdc.com or Small Order Zone at www.small-order.hktdc.com
- Advertising in product magazines
NSW TRADE & INVESTMENT | Rob Harrison
EXPORT COUNCIL OF AUSTRALIA | Peter Mace
START WITH A WRITTEN EXPORT PLAN | Choose proactive exporting over reactive exporting. You may have opportunities through networks to enter a new market, but for long term success, an export plan is essential. This will assist you in clearly identifying your strengths and weaknesses, allocating responsibilities, seeking finance and providing management with a clear understanding of the resources that will be required.
RESOURCING FOR EXPORT – EXPECTED OUTCOMES | Undertake an inventory of resources and internal capabilities, identify gaps, learn about external support to develop your export resources. Budget appropriately, forecast cash flow, consider best and worst case scenario and manage risks.
EXPORT MARKETING | Market research is critical to successful export marketing. Understand the four P’s of marketing; Product/ Price/ Place/ Promotion. Know the culture of the market in relation to the product you are intending to market. Does the culture fit? Make informed decisions. Develop your strategy to tell your story and ensure a unique selling proposition.
SKILLS | You need competent staff in all areas of your operation to safeguard the business and to trade efficiently. There are areas that can assist or hamper your export efforts – skilled personnel, knowledge, production potential, product or service adaptation and protection. Be clear on what is necessary for this next step and engage the correct individuals to assist you in achieving goals.
VISIT YOUR TARGET MARKET | Set clear objectives for your visit to maximise outcomes. Organise an effective itinerary and plan follow-up action. A personal visit allows you to experience and witness firsthand the business protocols, potential opportunities and supply chain partners, as well as allowing you to conduct in-market research and identify potential competitors.
DISTRIBUTION IS A MARKETING STRATEGY | Whether it’s distributors, agents, joint ventures or consolidators, ensure your understanding of the different forms of distribution available to be able to determine the best possible fit for your business and product. Whichever option you choose, seek independent advice and do your research.
LOGISTICS RESULTS | Lawrence Christoffelsz
WHY EXPORT? | Be clear on your reasons. Is it an excuse for international travel? A ‘quick fix’ for a slump in domestic sales? Or is it a committed long-term decision by management to develop an international customer base and thus increase overall sales volumes for the future. Is it an integrated part of the overall business strategy?
BE REALISTIC | Assess your export experience, your international trade skills, your production capacity, cash flow considerations, your product range, its current success and its potential in new international markets.
NEW MARKETS MEAN NEW COMPETITION | How will your brand compare with product, price, quality, story, marketing etc. overseas?
EXPORT STRATEGIES | There are a number of strategies when it comes to exporting (e.g. passive exports, foreign buyers, intermediaries, direct export etc.) and a number of steps involved in developing these. Which will you engage and why?
IS IT WORTHWHILE? | Exporting can be very rewarding as well as assist in the development of domestic products and sales. Due to Australia’s relatively small population, there are a number of positive benefits in penetrating larger, overseas markets. In some cases, a very small market share in an overseas market can represent greater profits and revenue than a large market share in the domestic Australian market. Exporting requires accurate information and data in order to be able to make the most appropriate decisions. It also requires patience and persistence.
For more information on how Logistics Results can fast-track your international trade growth, visit the website.
DUMONDE AND THE VICTORIAN STATE GOVERNMENT | Debbie Marks
SET REALISTIC GOALS AND OBJECTIVES | Preparation is key to success.
UNDERSTAND YOUR TARGET AUDIENCE | Analyse your target customer by identifying who, establishing what, determining how and then delivering. Articulate the ‘Hot Buttons’ like value for money, price, schedule, quality, innovation and risk.
DEVELOP AND SUCCESSFULLY PRESENT A STRONG ‘VALUE PROPOSITION’ | A compelling value proposition will articulate the following elements;
- Market – the specific group of customers you are targeting
- Experience – Proven performance helps reduce the perception of risk
- Offerings – the product/service mix you are selling
- Benefits – How your offering delivers clear customer value
- Alternatives & Differentiation – How are your different from/better than alternatives
- Proof – Substantiated credibility & believability of your offering
THE VALUE OF CAPABILITY STATEMENTS | Most target customers determine their level of interest in a very short time-frame (90 seconds) and this is something which many companies struggle to respond to. Part of the solution can be a concise Capability Statement. These are designed to help brands cut to the chase by putting all must know information on just one page. They are also used by customers to do quick assessments of the capabilities/products they might need. A successful Capability Statement will be customised to that particular target audience and incorporate responses to the consumer ‘hot buttons’.
FOLLOW-UP AFTER A MEETING | Swap business cards (in the local language), follow up on actions & information requests, ask for feedback, schedule a meeting. Follow-up is crucial both, out of courtesy but also to build professional relationships.