A NOTABLE UPTICK in orders to textiles and clothing factories in March and April. Many factory owners I spoke to were reopening, rehiring and back to full order books with many jobs being “rushed” – which means overtime. The reason is pretty obvious, really. The Western clothing chains held back for a while, worried about collapsing sales and, though times have been tough, they’ve now got close to clearing their inventories and need new stock. Hence the sudden rush to get their orders in. Good news for seamstresses and pattern cutters.
THE NEXT GENERATION of Chinese kids will mostly not have aunts and uncles, which may ultimately dent their volume of birthday presents and potential sources of pocket money. Still, there are an increasingly large number of places to buy baby gear in China. The leading local aggregator of kids’ brands, Good Baby, is now the joint-venture partner of global kids’ brand Mothercare, while Germany’s Baby1One is growing quickly. The kids market is still one where foreign brands hope to find a pot (or perhaps a potty!) of gold.
INTERESTINGLY, THOUGH, while urban tweenies, teens and 20-somethings (many of whom rely on mom and dad for money) are highly brand-conscious, branded baby wear has proved a hard sell. Follie-Follie Baby is thought to have been far from a roaring success, Disney has found the baby sector tricky and Les Enphants has been in the market for years without making much of an impact. Why is this? It seems a combination of legions of independent no-brand baby shops, free hand-me-downs from friends and a dose of common sense (i.e. what the hell do babies need branded clothes for?) are to blame.
CONVERSATIONS WITH luxury brands these days inevitably end in talk of whether or not to commit to outlet stores. They’re very popular in recession-smashed Europe and America at present, but will they work in China? Of course they will – sell luxury brands cheaper and people will buy. Some evidence was seen in Macau at the recent luxury-mega-outlet sale, where groups of women literally fought each other for cheap belts and handbags. Brawling in the aisles is usually the sign of a hot market. The potential problem is that those consumers who pay top dollar for luxury items will trade down to cheaper outlet-priced items while those who now can’t afford luxury price tags still won’t be able to afford the slightly lower prices. If this happens, then the brands will have nobody to blame but themselves for having “traded down” their high spenders to mid-spenders.
WHY DO so many analysts and journalists outside China insist on applying their own situation and assumptions to things here? When B&Q, admittedly struggling, said it would close 22 of its 63 stores, legions of analysts and hacks rushed to blame it on a supposedly weak property market. But the market wasn’t weak; it was recovering strongly. B&Q did mention the state of the property market in its own comments – but it also admitted to various non property-related operational failures: oversized stores, a failure to develop new product ranges, errors in store merchandising, and an over-reliance on the support of local suppliers for store staffing. Yet so many analysts still stuck by their property collapse theories. Are they just hearing what they want to?
THE CAR MARKET has been a rocky ride over the last 18 months, but several surveys I’ve seen recently suggest that 2009 will be the year Chinese national car brands outsell foreign brands for the first time. In New York last September, I listened to several well-respected auto analysts forecast a massive slump in the market. However, it would appear the Chinese love affair with the combustion engine continues largely unabated, though consumers are perhaps more price conscious now.