Market insights: Clothing industry in Hong Kong
Clothing industry in Hong Kong: Analysis and Trends
Clothing industry in Hong Kong has been offering an attractive environment for both local customers and overseas new investors thanks to the zero sales tax and the broad diversity of authentic products, but what it is happening in the recent years?
In 2005, the clothing industry in Hong Kong was one of the highest among all manufacturing sectors with HK$ 35.9 billion in 2003 and with 1673 establishment hiring 28752 workers. Hong Kong’s total export of clothing increased year-on-year by 9% in this year, and the exportation to the US and EU rose by 11% and 18%. Even though the clothing industry in Hong Kong is still a major manufacturing sector, with 825 establishments hiring 6266 workers in May 2015, in the same year, the total export of clothing fell by 10%. Hong Kong’s clothing exports to the US decreased by 7% in the first five months of 2015, while the exportation toward the EU fell by 15%. Clothing exports to major EU markets, including the UK, Germany, France, Italy, and the Netherlands, fell by 11-18%. Since the rising labor cost, the Yuan appreciation and countries like the United-States, Japan, and the European Union preferred imports clothes from developing countries such as Bangladesh, Vietnam, Cambodia and Indonesia. Then Hong Kong clothing manufacturers have to relocate their production to Southeast Asia.
Hong Kong an international Hub
Despite the decline, clothing industry in Hong Kong remains very competitive, which made this city a global sourcing hub in Asia. Hong Kong attracts a number of international trading houses and major retailers. Buyers who are supplying from Hong Kong include American and European department stores (Macy’s, JCPenney, Federated, Karstadt Quelle AG, C&A), discount stores (Sears, Target and Carrefour), specialty chains (The Gap, The Limited) and mail order houses (Otto and Great Universal Stores). Many international premium designer labels such as Calvin Klein, Donna Karen, Ralph Lauren, Tommy Hilfiger and Yves Saint Laurent, supply clothes in Hong Kong through their buying offices or other intermediaries.
In a market dominated by international brands, apparel retailers remain the major distribution channel such as:
- Abercrombie & Fitch
- American Eagle
- Forever 21
- Gap
- H&M
- Marks & Spencer
- Topshop
- Uniqlo
- Zara
Hong Kong Fashion Week and trade fairs
‘Hong Kong Fashion Week’ is organized twice a year and attracts international suppliers and buyers. Indeed, trade fairs and exhibition remain common places for buyers and suppliers of clothing to establish connections as well as discover market opportunities. The biggest events for clothing in Hong Kong are:
- Hong Kong Fashion week fall/winter
- Hong Kong Fashion week spring/summer
- Interstoff Asia
- The Hub
Even designers have been gaining more reputation through the exhibitions. For instance, Hei Lau, Melissa Bui, Vanessa Tao and Chloe Sung who launched their own brand.
Clothing industry in Hong Kong & product trends
Nowadays, online shopping is becoming more popular in Hong Kong including mainland China and clothing is among the most purchased items online with 31%. In 2014, there were 360 million of online shoppers but there are still 24% of consumers in Hong Kong prefer shopping at conventional brick-and-mortar stores.
With the boom of e-commerce and the improvement of online payment such as Alipay, this trend has pushed apparel brand to develop online shopping “technologies” such as virtual fitting and video shopping.
In recent years, the child clothing market is becoming a driving force, indeed, the global market for children’s wear is projected to reach US$174 billion by 2017. Chinese parents are willing and have the income to give to their child the best wardrobe of clothes.
With the awareness of health and quality of life, there is an increased of functional clothing technology such as anti-UV, thermal regulation clothing, microfiber textile. Although, more and more apparel brand adopts “eco fashion/environmental design”, which reduce the waste in the production process and pollution.
Due to Hong Kong exports decelerated, the city is focusing on e-commerce by developing “shopping experience technology”. The booming of e-commerce is creating enormous opportunities for entrepreneurs to start new businesses, for small businesses to grow, and for all businesses to increase productivity.
To Know more about clothing industry in Hong Kong contact us at dx@daxueconsulting.com
Follow us on Facebook: https://www.facebook.com/daxueconsulting/