Clothing and fashion to Hong Kong
Trends and opportunities
Hong Kong is the leading regional international shopping hub for North Asia. The city offers an attractive retail environment for local customers and overseas visitors due to its zero sales tax and broad diversity of authentic products.
The Hong Kong apparel market remains very competitive. In 2015, sales of apparel and footwear in Hong Kong reached HK$85.3 billion, an increase of five per cent compared with 2014 (Source: Euromonitor, Apparel and Footwear in Hong Kong, 8 February 2016).
As a fashion capital, Hong Kong is a place for original fashion trends and also a trendsetter. With a vast assortment of international brands present, Hong Kong is an excellent platform to showcase international products to tourists. The city acts as a stepping stone to enter mainland China and other regional markets.
Hong Kong is a favourite destination for mainland Chinese shoppers because of lower retail prices, zero sales tax, authentic products and proximity. In 2015, approximately 45.8 million mainland Chinese were amongst the 59 million visitors flocking to Hong Kong. (Source: Tourism Commission, Commerce and Economic Development Bureau, The Government of the Hong Kong Special Administrative Region, Tourism Performance 2015, 29 August 2016).
Despite the number of mainland Chinese visitors declining in 2015, this group of consumers remains one of the largest contributors to the sale of fashion products and apparel in Hong Kong.
In a market dominated by international brands, specialty apparel and footwear retailers remain the major distribution channel. Local people tend to look for affordable foreign brands such as agnis b., Abercrombie & Fitch, American Eagle, Forever 21, Gap, H&M, Hollister, Marks & Spencer, Monki, Topshop, Uniqlo and Zara.
Some well-known Australian brands such as Billabong, Jan Logan, Quicksilver, Roxy, Seed Heritage, Toscow and UGG have opened their retail chain stores in Hong Kong.
Major local apparel and footwear retailers include Baleno, Bossini, Chocoolate, Catalog, Esprit, Giordano, G2000, Mirabell and b+ab.
While online retailing is growing, it remains very small in Hong Kong. Store-based retailing is still the preferred format.
Local consumers are increasingly concerned with brand image and fashion trends, especially among the 20 to 30 year old demographic which preferences fashion over function. However with the recent economic slowdown, consumption patterns are shifting from premium brands to fast fashion and standard brands. Consumers are more receptive to international fashion labels, especially fast fashion brands which are considered trendy yet affordable.
Outside the fashion segment, Hong Kong status and style conscious consumers continue to demand smart casual clothing and sportswear.
Australian fashion designers have a growing reputation worldwide for quality and innovative designs. Australian lingerie, ready-to-wear, evening wear, men’s wear, streetwear and accessories are becoming more established internationally. Australian swimwear and surfwear are often regarded as world market leaders with many well-known brands.
Australian designers showcase their brands at international fashion shows such as, Mercedes-Benz Fashion Week Australia and the Melbourne Fashion Festival. However, with opposing seasonal patterns, collections that are more trans-seasonal than season-specific can help to increase sales in the Hong Kong market. Also, the seasonal half-year lag can be a good opportunity for Australia to analyse and capitalise on trends that have worked commercially in the northern hemisphere.
Awareness of Australian fashion is relatively limited in Hong Kong. However, the presence of Australian fashion labels and designers in the city continues to grow. Over 80 Australian labels, ranging from high-end women’s wear, footwear to swimwear are represented by fashion outlets such as:
- Harvey Nichols
- Lane Crawford
Hong Kong fashion merchandising buyers and consumers in the high-end market are very brand conscious and require unique and high-quality design with attention to detail. For the middle to casual wear market consumers generally opt for items that offer comfort, functionality and value for money.
Licensing can be an option in certain markets, if suitable partners can be identified. In addition, private label design could also be an opportunity in Hong Kong, given local companies’ strong ties to the fashion industry in mainland China.
Tariffs, regulations and customs
Hong Kong imposes no tariffs on imported textiles, clothing or footwear products and no regulatory requirements for clothing labels.
Labels generally contain three pieces of information pertaining to the garment:
- fibre content
- country of origin
- details of the manufacturer, importer or dealer.
Garments usually include labels that disclose care instructions for the consumer's benefit.
Marketing your products and services
Buying season in Hong Kong is January to March for a September (fall/winter) delivery and July to October for a February (spring/summer) delivery. Fashion buyers travel to Europe, America and Australia to attend major fashion shows to explore the latest trends and designer brands.
Mercedes-Benz Fashion Week Australia and the Melbourne Fashion Festival are major fashion shows selected by buyers from Hong Kong. The fashion shows present excellent opportunities for Australian designers to showcase their latest ranges.
Australian fashion houses and designers are advised to work with agents in Hong Kong, who will work on a 30 to 50 per cent margin and with significantly more for the retailer. As a general rule, imported Australian products are usually sold at nine to 10 times the ex-factory price. Buyers often make purchase decisions by comparing pricing to other similar brands/products already sold in the market.
Competition is fierce as the Hong Kong market is highly fragmented and dominated by international fashion labels from Europe, Japan, Korea and the United States.
In recent years, the pop culture wave of Korean fashion style has intensified this competition. Fast fashion brands from Korea which are trendy yet affordable are becoming more popular.
Brand building and PR
Hong Kong is a highly media-influenced market, quality marketing materials and brand development is vital.
Social media tools including blogs, beauty forums and Facebook are key influencers of consumers’ purchasing decisions. Fashion bloggers and celebrity endorsements are effective ways for brands to communicate with potential consumers. For example, Hong Kong Fashion Geek is a Hong Kong based blog focusing on a variety of lifestyle topics, including fashion, food, consumer gadgets and design.
Major weekly and monthly beauty, fashion, health and lifestyle magazines are an important tool in promoting your brand and products and all provide significant coverage of new and emerging fashions.
Australian fashion houses and designers are also advised to appoint a public relations company in Hong Kong to build media profile and coverage for brand building and growing sales.
Specialty apparel retailers remain the major distribution channel. Medium to high-priced fashion labels are usually sold in renowned department stores. Department stores predominantly stock established overseas brands that have a successful track record in Hong Kong.
Online and catalogue retailing are becoming more popular due to high commercial rental costs.
Australian fashion houses and designers can seek to distribute their products through fashion and apparel distribution channels in Hong Kong trade events.
Trade fairs and exhibitions remain common places for buyers and suppliers. To establish connections and explore market opportunities, Hong Kong manufacturers and overseas traders have involved themselves actively in international shows such as:
Links and industry contacts
Clothing and fashion-related resources
Building relationships with industry groups should be another consideration for Australian brands entering the market. Associations provide excellent networking opportunities and a source of market insight which will be vital for positioning your brand in Hong Kong. The key associations include:
Clothing Industry Training Authority (CITA)
Hong Kong Apparel Society Limited
Hong Kong Fashion Designers Association
Hong Kong Intimate Apparel Industries’ Association (HKIAIA)
Hong Kong Research Institute of Textiles and Apparel (HKRITA)
Government, business and trade resources
The government in Hong Kong looks to encourage overseas companies to engage in the local market, and use Hong Kong as a regional trading hub. Engaging with the following bodies provides an opportunity to identify potential government support and related opportunities to build your business in Hong Kong:
Australian Chamber of Commerce of Hong Kong
Fashion Industry in Hong Kong
Hong Kong Trade Development Council
Invest Hong Kong
Building brand recognition and understanding is a vital step for Australian businesses looking to engage consumers in Hong Kong. Hong Kong fashion consumers are influenced by international and locally produced fashion magazines as well as online blogs and related social media, which younger consumers increasingly look to for fashion advice.
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