Hong Kong at the Top of Fashion Industry - Essay Example

Is Hong Kong At the Top Of Fashion Industry? Name: Institution: Fashion refers to people’s way of life particularly the type of clothes they wear, what makeup and accessories they use, piercing the body, type of household furniture ,building designs and motor types depending on the prevailing behavior. Fashion includes the upcoming created textile designers. Fashion industry refers to production of fashion products especially clothes, shoes and accessories like earrings, necklaces and bungles. Fashion industry basically involves four production levels: Sourcing raw materials, particularly fur, leather, textile and fibers; producing the products; sales and marketing (keale & willem 2008). Fashion industry having first developed in European countries and parts of America continent does not mean that they are the only or leading nations producing fashion designs, however, the industry is global and/or international i.e. different stages of a fashion product making might be found in various nations. For instance, a Hong Kong fashion company may get raw materials from South Africa, have its footwear designed in Korea, Printed in Hong Kong and later distributing to all world nations. Comparative information about Hong Kong’s fashion industry and other giant international fashion industries over the world like Italy, France, Japan, USA, Germany, Paris, China and Denmark is very clear that Hong Kong stands on the summit. The general export, re-export and import share has basically involved common products offered in almost all the countries like fabrics obtained from either woolen or combed fiber, men’s suits, women makeup children’s wear etc ;the processing and manufacturing processes and the industry’s operation costs. – Global economies share progress is going to be looked at so as to identify the reasons as to why Hong Kong is doing very well in fashion industry. I am going to discuss about the Hong Kong’s total contribution worldwide. Some of the activities I will consider include; the companies sourcing power, sales channels, operation costs, product originality and industry competitiveness. (Hktdc 2013) Textile industry for Hong Kong had – as at September of 2012 – 751 listed companies for manufacturing and 6240 firms for importing and exporting their products. In the sector for manufacturing 5478 people were employed and there were another 28110 people working in her firms dealing with importation and exportation. It is important noting the stated figures do not include yarn knitwear.      Starting from late 1970s, Hong Kong’s revolutionary fabrics and fashion manufacturers led their way and shifted their production activity to the region called Pearls River Delta, which created the limitless manufacturing theory.  All over the gone years, Hong Kong grown to a hub for sourcing fabrics and clothing products from a base for manufacturing. (De la 1986)     Hong Kong vendors are recognized for their exemplary understanding on how to source the articles in order to provide for isolated clients bases. Hong Kong possesses superb understanding of global and local policies or strict procedures pertaining government of exports. Such procedures include those of origin, documentation requirements and tax rate, and they are capable of delivering valuable products within a little lead time. Hong Kong also attracts large numbers of global commerce buildings and chief dealers to import from their stalls. This includes European and American section supplies, field chains as well as post order stores.  A big number of global finest fashion brands also markets their clothing there by means of their importing agencies and/or other links. (Hktdc 2013).        With its populace counted to be close to1.5 billion in year 2015, the fast increase of prosperous middle class in Mainland of China has created a large latent customer marketplace for Hong Kong’s articles.  Hong Kong, since it is the Mainland’s trend-setter, it has been serving as a stage for national and international companies to get into the market within the Mainland.      Moreover, Hong Kong’s fabric and fashion industries have risen up the worth sequence headed towards manufacturing of original label making. She has also been spreading to services that are corresponding to the manufacturing. These services include marketing, sourcing, management of supply chain, research and designing.  Hong Kong brand names currently have been spreading into outside country markets. All these activities have created extraordinary opportunities for Hong Kong’s fabric and fashion industry. (Hktdc 2013).   Another powerful factor facilitating sparring of Hong Kong fashion industry is its government. Her government has been very dedicated to supporting Hong Kong industries to develop their labels as well as marketing to Mainland as well as global marketplacess.  Hong Kong has also been operating closely with entire business society, commerce relations and any relevant organization to assisting ventures working under various sectors in developing their brands as well as lifting a superb quality global appearance for brands of Hong Kong.  Their clothing designers are internationally reputable because the professional experts they have employed (Hktdc 2013). On current trends, Hong Kong manufactures are very sensitive and aggressive.  The big numbers of cloth dealings that Hong Kong holds purposefully do strengthens its national designers to have wide focus, to discover international markets more so improve her position on fabric and fashion industries.      In fact, some of Hong Kong’s manufacturers are doing retail trading overseas or within the locality.  Many have retailing systems with their identity marks set in main cities worldwide.  In fact, Hong Kong fabric and fashion industry has maintained its global competitiveness by so many ways including employing capital-demanding machinery which is technologically sophisticated. Also, Hong Kong is the prototype in using computers for 3dimension model of fitting of garments. Manufacturers of Hong Kong nowadays utilize R&D reserves in upgrading all their chains of fabrication, including treating of waste water, ensuring the dyeing processes are kept in control as well as the energy economizing systems in the clothing sewing process. (Yang 1998)     So as to provide auxiliary support for fashion industries, The Hong Kong government has implemented different schemes like SME Development Fund, Exporting Market Fund, Loans Guarantee Schemes, Innovational and Technological Fund, Designing Smart Initiatives, Researching and Developmental Cash Rebate Schemes.  These designs can aid enterprises, as well as those that are in fabric and fashion making, in reconstructing and improving, structuring their brand, upgrading product designs and sophisticating technology. Hong Kong corporations are particularly encouraging qualified organizations to request for development funds (under Trading and Industrial Departments) to put in place plans that can assist them in developing and promoting their trade names as well as taping the local markets in Mainland.  Some important supporting corporations, for example, Hong Kong’s trades developments commission, the Hong Kong Productions commission also help the business transactions carried out by Hong Kong companies with supportive services on technology advancement, administration improvements, branding and marketing developments, and providing market information (Hktdc 2013). Hong Kong government aspires to providing the industries with effectual and proficient facilities to enhance business improvement.  For a long time Hong Kong has been listed among the international most active cargo havens and it is at the top of other international air load throughputs. International Airport of Hong Kong is proficient, dependable and well-linked.  Apart from international links, there were many underway projects that aimed at improving Hong Kong’s connections with the Mainland and have been completed so far.  These projects include Zhuhai-Macao Bridge connecting to Hong Kong and Hong Kong’s part of Guangzou-Shenzen-Hong Kong’s direct rails connections. These nearer and proficient rails and transportation connection routes linking Hong Kong and Mainland provide her ventures a big opportunity to capture the trade chances that may be available. Hong Kong’s Mainland merits are supplementary improved by Mainland and Hong Kong’s close economic partnership arrangements, (CEPA as a short form).  According to CEPA, any products from Hong Kong, provided they live up to the appropriate CEPA requirements are allowed to benefit from zero duty on fabric and fashion articles importations into Mainland, and this in many ways facilitates competitiveness of their products. (Robin 1999).  For sure, fabric and fashion products have been one of the major beneficiaries under CEPA.  Up to today, very many certificates of Hong Kong original application under the CEPA are now certified.  Approximately 25% of the applications are on fabrics and fashion articles, having a total export worth exceeding US$438 million.        What merits the CEPA is its national-neutrality. The CEPA never enforces restrictions on possessions or sources where manufacturers obtain starting finance.  From the time when the worldwide abolition of textile shares by the global trade organizations agreement on fabric and fashion from the beginning of the year 2005, Hong Kong has reshuffled and revised its fabrics control measures in order to make available better enhancement to the operations and at the same time guaranteeing original conformity of the fabrics and fashion produce asserting Hong Kong’s origin. (Verma 2000) Looking at the most recent developments made in the international fabrics transacting setting and the national fabrics trade, Hong Kong has set legislation to lighten up textile management measures by taking away the authorizing requirements for textile exportations and importations involving the "non-sensitive markets" as well as for all fabrics transportations made by ship. The "Non-sensitive markets" at present envelop fabrics importations from other areas excluding the Mainland as well as fabrics exportations to other areas apart from the Mainland.  After the finishing the procedure of legislature, the repose took place in the mid 2011. In January, 2013 Hong Kong’s exported textile rose by 40 %, though there was a resulting decrease of 7% in 2012. Re-exports, accounted for above 98 % of the total exports increased in the same rate over that period, domestic exports rose by 39 %.China’s Re-exports share amounted to 72 % while in early 2013 they were responsible for 62 % of the total textile exports in Hong Kong(Hktdc 2012) It is, therefore, worthy noting that the textile industry in Hong Kong does not only serve the local clothes manufacturers, and as a result of the experience of a long time it also serves those of the Mainland in China and the other offshore bases of production and many other firms which are engaged in the trade of textiles .Hong Kong industry is especially renowned for its supply of high quality dyed fabrics that are later printed. Hong Kong is also well known for spinning of cotton, weaving of denim, panel knitting panel and manufacturing of knit cotton (fine-gauge).(Hktdc 2013) For about 2 decades, Hong Kong had acted an important part in the trading of fabric and clothing in the world. In the year 1998 the total exported worth in world’s fashion trade was about USdollars180 billion, where 62.5% of the total worth was shared among the giant topping ten countries. China was taking the leading position, contributing about 16.7% of the total global export. Hong Kong took the second position having 12.3% of the total share, then followed other countries like Italy, UK, US, Korea, Mexico, Germany, France and Turkey(Hktdc 2012). During the same year, Hong Kong’s exported and domestic products amounting to USdollars10 billion and re-exported the same products for USdollars13 billion. Between year 1992 and 1998, however, its total exportation grew to 2%. This went under the world’s 5% average? In the year 1998, the globally exported amount was USdollars151 billion, where the leading ten countries were accounted to have contributed 69.3% of the world’s export. Germany took the leading position, Hong Kong came second, and then Italy and other countries followed. Summing up all fabric and clothing exports for Hong Kong brought about a 2.9% annual increase between year 1992 and 1998, which mainly led to the expansion of re-exports from China. Products that were exported to USA used to enjoy the uppermost rate of compound growth at about 7.8% between year 1992 and 1998, as a result of the establishment of North American Free Trade Agreement. (Hktdc 2012) Under the Closer Economics Partnership Arrangements of Hong Kong and the mainland of China, have been given origin by the mainland, without excluding clothing products, treatment free of tariff starting from 1st January 2006. In accordance with the set procedures, the products which did not have prevailing CEPA rules enjoyed tariff-free handling upon applications made by the local manufacturer and at the same time upon agreeing and meeting the requirements of CEPA rule. (Hktdc 2013) Hong Kong clothing companies in Hong Kong receive reputation OEM and ODM production. They deliver clothing articles of high quality within a short duration of time, since foreign retailers and importers request for tightened clothing supply management which ensures the ordered items reaches the store at the right moment. Increasingly, clothing companies in Hong Kong have shown their enthusiasm for promotion of brands. The geographic boundary for Hong Kong has enhanced development of clothing industries which are forward looking (Lam & Worng 2007). Majority of the Hong Kong fashion producers Sales canal Hong Kong’s have set up production facilities offshore as a way of reducing its operation costs. Hong Kong is the leading production centre and the best clothing sourcing hub globally. Garment branding Companies in Hong Kong are also well experienced procurement of fabrics, selling and marketing, controlling product quality, logistic arrangements, fashion designing and in national and international policies. The professionalism they portray and the services they offer in combination cannot be easily matched with other countries. Altogether they produce one among few largest groups which are involved in importing and exporting commerce in Hong Kong. Hong Kong’s garments manufacturers have wide knowledge concerning products and sourcing. They have a smart understanding and ability to cater for dispersed customer bases preferences. Exporters have an experience of national and international policies governing exportation of clothing, for instance origin rules, restrictions of the quota, rates of tariff, documentation requirements etc. Cutting, making and trimming are common arrangements, although many manufacturers in Hong Kong have shifted to higher worth added activities like brand and design development, control of product quality, logistics and sourcing of material. (Hktdc 2013) Some well-established domestic manufacturers have joined the retailing trade, either in overseas or in local markets. A big number have constructed retailing systems bearing their brand names in the largest cities globally such as Beijing, New York, Singapore, Taipei, shanghai, London, Francisco, Sydney and Tokyo. Some manufacturing retailers that are well-known include Baleno, Crocodile, Bossini, Episode, G-2000, Espirit, Giordano, Moiselle, JEANSWEST and U-2. As a worldwide sourcing hub located in Asia, it attracts many international trading industries and chief retailers. Customers sourcing material from Hong Kong are European and American department stores such as Macy's, Federated, JCPenny C&A and Karstadt Quelle, discount stores include Sears, Carrefour and Target, specialty chains includes The Limited and The Gap while mail ordering houses include Great Universal Stores and Otto. Many international labels of premium designers –like Calvin Klein, Ralph Lauren, Donna Karen, Yves Saint Laurent and Tommy Hilfiger – gets clothes from Hong Kong by means of intermediaries or their own importing agencies. (Hktdc 2012) Fashion designers in Hong Kong have gained global recognition for employing professional experts who are very sensitive to prevailing fashions and their capability to combine commercialism and modernization. Average to highly priced fashion garments bearing labels for Hong Kong designers have been exported in famous department stores abroad such as C&A, Bloomingdale, Harrod’s, Macy's, Isetan, Marui, Mitsukoshi, Nieman Marcus, Mitsukoshi and Seibu.   Trade exhibitions and fairs remain as common places where buyers and sellers of garments to meet. To set up connections and discover market opportunities, traders and manufacturers have actively involved themselves in international exhibitions led by Hong Kong Council for Trade Development, including those that are in Beijing, Chengdu, Budapest, Dalian, Dusseldorf, Dubai, Hong Kong, Mumbai, Moscow, Paris, Warsaw, Tokyo and Jakarta. ‘Fashion Week in Hong Kong’ appears twice annually and attracts many international sellers and buyers participating in their exhibition. ‘World Boutique ‘in Hong Kong is one of the independent events dedicated to promote designers' products and product brands from all over the world. (Hktdc 2012) Thirdly, Hong Kong has employed professionals who have led their fabric and fashion industry to utilize the opportunities emerging from the dynamic industry trends. Hong Kong have been able to put in control the following trends(Hktdc 2013) Online buying and e-marketing: Online shopping has increased widely in Hong Kong’s chief markets, which include China. In Accordance to China Internets Networking Information Center all the online clients on the China’s mainland went beyond 242 million people in 2012, boasting a profit of RMBdollars760.9 trillion within the first nine months of 2012. The growing diversity of online sites of shopping and the growing social media advertising and mobile selling, has greatly boosted online buying and selling for Hong Kong produce. This drift has also encouraged expansion of online trading technology, Virtual fitting, mobile snapshot for garments and video shopping are some of the online technologies for shopping that have developed by this trend. This is now applied in various platforms of online shopping.(Hktdc 2013) Growing need for private labels: House labels, have become a very effective method for marketing clothing to retailers. This is purposely done so as to differentiate and their product image since chief retailers now put a lot of emphasis on their private labels. Well-known retailers in Hon Kong now own private labels. They utilize the opportunity brought about by desire of consumers to have those private labels appearing on their daily wear such as T-shirts, jeans and accessories. They also supply their clothing products to owners of private label.(Hktdc 2013) Rising customer consciousness: Clients have become more social conscious, practical and thoughtful. For example, in 2012, in accordance to the information about textile exchange, sales of natural cotton products approximately have increased by 34%, a rise to USdollars9.3 billion. Manufacturers of clothing have increasingly turned out to be certified toward traceability standards like OE 100 standard, OE Blended and Global Organic Textiles Standards, while re-known clothing stores such as Nike, H&M, Adidas, C&A, Anvil Knitwear and Wal-Mart have reacted by expanding Hong Kong’s assortment of unrefined cotton clothing.(Hktdc 2013) Rising interest in Chinese domestic market: The fast expansion of the economy of mainland has captured the Hong Kong clothing company’s attention. While some strong foreign players such as C&A, H&M and Uniqlo have sought to enlarge their markets in lower-tier cities. For example, FOREVER 21 and Hollister have opened supplies in Hong Kong, besides, embarked on Hong Kong as the facilitator to cross the boundary. Conforming to the market extension, Hong Kong consumers and manufacturers have become brand-conscious and more fashionable.(Hktdc 2013) Asia is top-listed as the largest market for Hong Kong textile exports, accounting for above 92 % of the total exported textile. Nine out of the leading 10 destinations are located in Asia. Chinese Mainland is at the top of the ranking. Other chief export market for Hong Kong’s textiles are Vietnam, Bangladesh, Indonesia, Cambodia – Hong Kong’s fabric industry has production facilities in all these markets - Sri Lanka, Thailand, the Philippines, India and USA.(Hktdc 2013) Because of increasing costs of production and strict environmental regulations, the number of Hong Kong manufactures who have moved their lower-end product productions to Vietnam and China is increasing rapidly. Vietnam is recorded as the second biggest Hon Kong textiles market(Hktdc 2013). The operations of manufacturing in Hong Kong have focused on items which have a high value added and sophisticated, together with quality ring turned OE yarn, superior gauge knitted fabric together with complex printed and dyed fabrics. So as to boost competitiveness in the market place globally, some of the Hong Kong’s textiles industries now have formed, with foreign Chinese companies, strategic partnerships. They have also joined forces with mainland suppliers of cotton to produce cotton fabrics. Since Hong Kong produces fabrics and caters for the local clothing manufacture both are able to deliver garments in short notice. Again, a large share of textiles exports are used by Hong Kong companies, offshore garments production, specifically in China. (Yang 1998) Hong Kong exports statistics indicate that fabric yarns accounts for approximately 86 %, woven textiles accounts for 26 %, crocheted fabrics takes 30 %, while cotton takes 28 %. All returned noticeably last January. Global recognition is ascribed to fashion designers of Hong Kong for their ability to harmonize all their operations to manufacture products of very high quality. Hong Kong is a leading centre of production and at the same time a leading international hub for fashion sourcing (Hktdc 2013). Also, Hong Kong's industry for textiles is strategically located to supply clothing merchandisers and manufacturers in local and at overseas. While many of Hong Kong manufacturers and textile traders sell their products in Asia-to the clothing manufacturers. (Hktdc 2012) On the China’s mainland particularly, worldwide textile companies also uses Hong Kong like a gateway of promoting their articles to Asian economies. For example, the rapidly developing fashion industry for Brazil is trying to use the trade platform of Hong Kong to advance their textiles on the mainland of China.(Lam & Wong 1997) The industry can also produce a big range of high quality items in bulk and/or specialized products within short ordered-time. Its competitiveness is strong for its high quality and fast reaction to fashion trends that are prevailing and aims to meet the demands of the market. Also Hong Kong industry has earned an international reputation for superb quality, flexibility, expertise and workmanship.(Robin 1990) Hong Kong is a wonderful one-stop centre for shopping for clients looking for current and trendy clothing materials. The many International textile Shows, held annually, is an important sourcing and marketing platform within the locality for both cloth manufacturers and clients alike. For instance International textiles fairs usually organized in Hong Kong offer a big range of quality products like bathroom textiles, kitchen textiles, bathroom textiles, carpets and floor coverings (Hktdc 2012). It is a professional platform, giving sellers and buyers of local textiles an immediate contact to market in both Asia and overseas.    In accordance to the international manufacturing scene and stiff competition from over-board, Hong Kong's cloth production has been advancing forward to the price chain to serve the demands for high market products manufactured from original brands or designs. Today, the textiles industry operations in Hong Kong is mainly focused on all or on higher activities that are value-added like marketing and sales, quality control, development and designs, while offshore facilities are sophisticated for production operations. In turn, this results to a high share of re-exports in Hong Kong’s textiles export portfolio.(Hktdc 2013) With rising costs of labor, fluctuations in prices of raw material and strict environmental regulations rules on the mainland of China, many of textile manufacturers in Hong Kong have transferred their production equipment to some countries on the Southeastern part of Asia. Such countries include Cambodia, Vietnam and Bangladesh. Some of Hong Kong companies have set up their production off shores to take the advantage of special treatments offered by local trade agreements.(Hktdc 2013) In order to keep their product requirements and manufacturing technology advancing, textiles industries in Hon Kong have intensively invested to be updated with the modern technological trends. Sophisticated productions technology is acquired mostly from the vendors from Italy, Germany, Spain, Japan, Switzerland and South Korea. Latest technologies are not strange to home manufacturers. As a result, textiles manufacturers from Hong Kong can offer a wider variety of fibers, fabrics and yarns to clients.(Hktdc 2013) To conform to the world’s green manufacturing trend, other textile corporations in Hong Kong have take on popular item labels or corporation’s main voluntary standard for environmental maintenance prove their certification or to expose their greenness. Investments made by the governments and winning support by industries mainly center on developing and maintaining companies’ strengths, particularly in developing e-commercing and acquiring capabilities for managing supply chain activities, worldwide sourcing, management of productions, logistics and management of distributions, including compliance issues management. This has been Hong Kong’s key area. In conclusion Hong Kong has been able to tighten its competitiveness against fast growing companies in France, Italy and Germany etc. In fact investments made in this field alone are close to be enough to service the fabric and fashion industry in Hong Kong, particularly in the sector of the new economy(Robin 1990). In the latest economy, the following features have been observed to have positively affected Hong Kong’s fashions industry operations: Knowledge as a key resource, Data and net communications as the main carrier, Innovation and creativity as the leading feature, government support, ownership and application of sophisticated equipment, ability to employ high professionals and experts and many others. From the above discussion it is, therefore, evident that Hong Kong is at the top of global fashion industry. That is, it is among the leading fashion producers in the world. Referencing List Read More