|
Note. This is not a definitive guide to what product characteristics will guarantee consumer acceptance and therefore sales in the China and Asia markets. It is rather a specification of broad marketing parameters to “satisfy consumer needs and expectations” in the target consumer group.
The target consumer group is the emerging and already affluent Asian middle class. In this group, consumer preferences are for western footwear brands which nowadays are a status symbol especially for young women in their 20’s and 30’s.
The segment is low volume, high price and high profit margin and lends itself ideally to fashion and luxury sought after by the Asian “nouveaux riches”.
Therefore we are referring primarily to ladies’ footwear in these recommendations.
Basic recommendations:
Footwear presented to Asian middle class women should have the following characteristics:
 |
|
· Reflect latest fashion trend according to the season
· Contain fashionable colours as defined by forecasted colour trend organisations such as the French Colour Authority (APLF Trends on www.aplf.com)
· Modern styling to enhance a western up-market image
· The image should reflect “fashion”
· Be made from first class materials
· First rate manufacturing standards
· Original and creative designs by home grown talent |
The above factors will allow overseas manufacturers to sell high profit margin ladies footwear into China major cities, for example.
Current buying trends in Asia
· Fast fashion is getting more and more popular in the Asia market with the presence of H&M, Zara and Mango in Hong Kong, Shanghai, Taiwan, Japan and India.
· Due to the increased exchange rate of the Euro, the retail price for high-end footwear has increased by at least 30%. A pair of "Pedro Garcia" used to sell for less than US$360 in Hong Kong but is sold out around US$420 now. With inflation increasing in many Asian countries, consumers tend to buy fashionable footwear as a quality item but with intermediate price level.
· As well as Hong Kong and other fashion cities in Japan and Korea, the purchasing power in China and India has increased dramatically. More international brands have opened shops in China and India. Buyers from China and India like to source their footwear in Hong Kong as it is a city at the forefront of fashion with probably the greatest concentration per sqm mile of luxury and fashion brands boutiques and department stores in the world.
According to Romano Baruzzi, Italian Trade Commissioner in Hong Kong:
‘Hong Kong is a “luxury boutique”. Italian designers’ brands prefer establishing their grand flagship store in Hong Kong because of the greater freedom of goods and capital and because it is the best place to promote Italian fashion and lifestyle in Asia. One full floor of the latest shopping mall is dedicated entirely to Italian brands. The reason is that Hong Kong is a very cosmopolitan city and surveys have shown that buyers from Mainland China prefer making their first luxury purchase in Hong Kong.’
Size and customer preferences
Footwear size: In Japan, Thailand and Malaysia ladies' sizes are relatively smaller than the rest of Asia. China and India may require bigger sizes comparatively.
Order quantity: Asian buyers purchase in small quantity compared with EU and US market. But the selling price and profit margin is relatively higher. Buyers may initially order a few thousand pairs only.
Type: Sandals with sparkling ornaments are more popular in Singapore, Malaysia and India. Evening shoes of high quality/luxury are popular throughout Asia. Boots are ready in China, Hong Kong, Japan, Korea and Australia.
Market/style: Japan is very extreme, either very fashionable or very conservative. Quality is extremely important. Singapore and Malaysia are very strong in manufacturing sandals, so, pumps, ladies shoes or short cut boots will be more in demand.
Hong Kong, Thailand, Taiwan and some cities in China - require fast fashion.
However, China is a very special market. Domestic buyers are willing to buy expensive footwear but with a well-known brand. With the growing disposable income and purchasing power in China, consumers either spend US$70 for a domestic or Hong Kong brand such as Belle, or much higher prices for leading international brands. It takes time for brand building in China. Foreign footwear chains, such as Nine West, are very successful examples in China.
Referring to the experience of exhibitors in the Brazilian Footwear Pavilion at Fashion Access April and October 2008, Brazilian footwear has an average retail price for OEM footwear from Brazil of around US$90 - US$110. Brazil used to manufacture on an OEM basis for Pedder Red, Staccato. Asian buyers perceive Brazilian footwear with quality and style but are only willing to buy at intermediate prices.
What retailers expect in Asia
Chinese/Asian retailers expect that the manufacturer be flexible enough to adapt their sizes and models to the specifics of the local consumer - (wider feet, shorter heels etc.) and be prepared to adapt to local tastes.
This makes it easy for them to re-order and get available supplies of new collections.
It is advisable for footwear manufacturers to establish a business relationship with a local agent (Hong Kong companies are the most experienced in importing from overseas and selling into China) as a first step and then start setting up showrooms to make it easy for buyers to order and to see new collections.
Other factors to be considered
· Pricing - cannot be “cheap” otherwise status value is prejudiced
· Must arrive to market as the latest fashion and not two months late
· Air freight is ideal for delivery and transport costs are offset by higher profit margins
· The revaluation of the Chinese currency, the yuan, in terms of the US dollar since July 2006, makes imports cheaper for distributors and wholesalers
· Exhibiting in Fashion Access will allow manufacturers to find representation in Hong Kong with traders who know the local market, understand it as well as western culture to create an “east-west” bridge between manufacturer and consumer
French, Italian and Spanish footwear has been exported to Asia, mainly via Hong Kong for at least 30 years. Now the Brazilians are exporting to Asia using Fashion Access as their sales platform and Hong Kong, as Asia’s business hub, as a the main point of entry.
|
If you wish to contribute to the APLF News, with your experiences in the industry, your observations, or general thoughts on the direction the industry is going, we would like to hear from you. Email: aplf-news@aplf.com |
|
How long has your company been attending APLF? If you wish to be involved in the celebration of the 25th anniversary of APLF, we would like to hear from you. Email: aplf-news@aplf.com. Subject Headline: APLF 25th Anniversary | | 
