Textination Newsline

• Projects worth USD 52 million planned

Tashkent (GTAI) - Uzbekistan wants to become an international player in the shoe and leather industry. The market offers foreign companies a lot of potential for cooperation.

The Government of Uzbekistan has adopted a new initiative for the modernization and expansion of the leather, footwear, leather goods and fur industries. It is aimed at increasing efficiency and expanding production as well as accelerating integration into the international market. Producers are focusing primarily on Russia and Kazakhstan, but also on Western markets such as France. Foreign companies are welcome to participate in the planned projects. In the long term, value chains are to be created, clusters established and exports promoted.

Cooperation with Uzbek companies are possible in the production of leather goods, passive contract finishing, supply of equipment, auxiliary materials and chemicals to companies or in the trade with footwear, leather and fur goods. There are plenty of high-quality raw materials and a large potential of available and motivated workers.

The framework conditions for companies in Uzbekistan have improved noticeably. Labor and energy costs are low. In 2017, the government initiated economic liberalization and opening of the country. Uzbekistan wants to more than double its shoe exports by 2020. In 2017 Uzbek manufacturers sold shoes worth USD 150 million abroad.

Foreign investors are planning new projects
The O´zcharmsanoat's key 2019 investment program lists projects valued at USD 52 million. In addition, there are other projects which have not yet been included in the program due to ongoing coordination with potential foreign investors or which are planned in companies that operate outside O´zcharmsanoat.
An overview of current and planned projects for the development of the leather, shoe, leather goods and fur industry in Uzbekistan can be downloaded here.

Association O´zcharmsanoat is the main contact partner
The Association of the Leather Industry O´zcharmsanoat acts on behalf of the state as the central regulator and coordinator of the sector. It was restructured in May 2018 and controls, among other things, investments and foreign trade. Almost all notable Uzbek players in the leather industry are active under its umbrella. These include 30 automated slaughterhouses (supplied by livestock farms), 63 tanneries, including pre-tanning facilities, 131 shoe manufacturers and 28 producers of other products, including fur products (as of June 30th 2018). It also operates 13 warehouses for the purchase of raw materials from private animal breeders.

The leather processing companies produce hard leather (foot and insole leather) and upper leather, mainly chrome leather goods and Russia leather. The annual raw material supply amounts to around nine million hides and five million skins. About two fifths of this volume is currently exported. Among the 252 companies, which are employing about 26,000 people, there are 47 companies with foreign capital participation as well as numerous purely private Uzbek companies.

Only about a dozen of the 131 shoe manufacturers, which are currently active at O´zcharmsanoat, employ 100 people or more. The development of efficient medium-sized structures in the sector is still in its infancy and is likely to gain momentum.

Government grants tax and tariff preferences for five years
The slaughterhouses and manufacturers of raw, semi-finished and finished goods as well as the new foreign trade company Uzcharmimpex will receive tax and customs relief. These apply to existing companies of the association O´zcharmsanoat until January 1st 2023. Newly established companies can benefit from the preferences for five years from the date of company foundation.
In detail, the following preferential conditions are granted:

• Exemption from the profit and wealth tax or the uniform tax levy for micro and small companies
• Exemption from compulsory contributions to earmarked central funds
• Exemption from import duties for the import of equipment, completion parts, raw materials and materials which cannot be procured in the country and are intended for production.
• Granting a 60-day deferment of payment of import duties (from the date of the customs declaration) for the import of all other equipment, completion parts, raw materials and supplies and other goods for production needs
• VAT exemption for imports of raw materials and intermediate products for the use in production and of equipment for footwear production

Uzcharmimpex imports equipment for Uzbek companies
The foreign trade company Uzcharmimpex is engaged both in the export of sector products and in the import of equipment, spare parts, auxiliary materials and chemicals. The list of imported capital goods includes butchery, cutting, slicer, splitting and shaping machines, vacuum dryers, electronic measuring instruments for leather surface measurement, sewing machines and footwear assembly equipment.

The industry modernization initiative also provides for the creation of an industry development fund. This is fed by a levy amounting to 5 percent of export earnings from chrome-tanned hides and skins that have not yet been dressed (wet blue). These funds are intended for investment projects, the granting of loan guarantees, the financing of ISO certifications, the promotion of trade fair participations and the promotion of training and further education.

Usbekistan doubles shoe production
According to the Association of the Leather Industry O´zcharmsanoat, about 40 million pairs of shoes were produced in Uzbekistan in 2017, including 17 million pairs of full and partial leather shoes. An output of 34.2 million pairs of leather shoes is planned for 2020. Then the leather production is expected to reach a volume of 1.3 billion square decimeters. For 2018, the association expects 1 billion square decimeters of leather. O´zcharmsanoat aims to increase its total exports to USD 480 million by 2020 and to USD 1 billion by 2025 (Actual 2017: USD 150 million).

The collapse of the Soviet Union, a failed privatization policy and a difficult business climate led to a breakdown in production in the mid-1990s to around 2009/2010. On average, manufacturers produced less than four million pairs of shoes a year. Previously, around 30 medium-sized manufacturers brought 50 million pairs of shoes onto the market each year. In addition, 2.4 million bags and 200,000 pairs of gloves were produced annually. After 2010, there was a start-up boom in the sector thanks to preferential tax arrangements for particularly small companies.

Contact address
O´zcharmsanoat uyushmasi (Association of the Uzbek Leather Industry)
Contact person Sardor Uktamovich Umurzakov, Chairman of the Management Board
109, Mustakillik ave., 100192 Tashkent/Uzbekistan
T +99871 267 58 47, 268 40 66
F +99871 268 40 66rais@uzcharm.uz, info@uzcharm.uz,
Directory of companies http://www.uzcharmexpo.uz/spravochnik
rais@uzcharm.uz, info@uzcharm.uz
http://www.uzcharm.uz

 

OutDoor by ISPO is coming to Munich and numerous exhibitors and partners have already confirmed their involvement in the trade fair (June 30 to July 3, 2019) – around nine months in advance. The international trade fair for the outdoor industry owes its popularity in no small part to the new profile, which extends far beyond the exhibition halls themselves: the 365-day platform provides brands and manufacturers with the digital and physical channels they need to be able to communicate with their customers all year round. As such, OutDoor by ISPO is the reliable, modern and pioneering platform that the industry has been looking for.
 
At the end of June during the Outdoor by ISPO launch conference it was already clear that the concept developed by Messe München in cooperation with the European Outdoor Group (EOG) was exactly what the market needed. Over 250 international industry representatives also welcomed the plan to raise the profile of OutDoor by ISPO by establishing it as a year-round platform for the outdoor industry in addition to the trade fair. Numerous exhibitors, from a total of 25 countries so far, including for example Arc‘terix, Maloja, Mountain Hardware, Jack Wolfskin, Ortlieb, Petzl, Scott, Sining Rock, Tatonka and Vaude as well as the Oberalp Group with its brands Dynafit, Salewa, Pomoca and Wild Country, have already registered for the first event in Munich. The new OutDoor by ISPO will open its doors for the first time at the Messe München Exhibition Center from June 30 to July 3, 2019. An overview of the brands and manufacturers, which have already booked their places, updated every week, is available online as is information on the exhibitor registration process.
 
“OutDoor Easy” – flexible stand construction concept for more modest budgets
OutDoor by ISPO is an important industry event both for small and big brands and hence caters for companies of all sizes. Outdoor Easy is specifically targeted at exhibitors with a more modest budget and aims to make the exhibition process as smooth as possible. Markus Hefter, Exhibition Director OutDoor by ISPO, says: “This flexible and cost-effective stand construction concept is a high-quality and authentic solution enabling companies to showcase their products in the perfect setting without having to undertake all the set-up work on their own.” The concept consists of a cost-effective full package offering an open and attractive layout as well as a good location in the hall. More information on OutDoor Easy is available here. 
 
PADDLEexpo enriches OutDoor by ISPO with its experience
With the PADDLEexpo as partner the booming water sports sector will now be properly represented at OutDoor by ISPO. The professional trade show for kayaking, canoeing & stand-up paddling (SUP) in Nuremberg has been an ISPO partner for ten years and the partnership is now being taken to the next level with the installation of the Paddlesport Village at OutDoor by ISPO. This area will be exclusively dedicated to paddlesport products and will be an important meeting place for kayaking, canoeing and SUP experts. More information on PADDLEexpo is available at ispo.com.
 
OutDoor by ISPO available 365 days a year for the industry
ISPO is known for being a year-round ecosystem offering analog and digital products and services. ISPO customers have been benefiting from this mix of information, innovation and networking for years – and this portfolio is now also available for OutDoor by ISPO. OutDoor by ISPO now offers market players the opportunity to present themselves to the world 24 hours a day, 365 days a year. With it, the annual leading trade fair for the outdoor industry is supplemented with a far-reaching platform, which is available to the entire outdoor community, from brands and manufacturers right through to retailers and consumers all around the world.

 

• Almost 1 in 3 pieces of furniture is exported
• 14% of furniture sales now online

At the European press conference in September 2018 in Madrid for imm co-logne/LivingKitchen 2019, Jan Kurth, Chief Executive of the Association of the German Furniture Industry (VDM), reported on the state of business in the sector:

At the end of an exceptionally hot summer, which has driven consumers to outdoor pools and beer gardens rather than furniture showrooms, the German furniture industry looks back on correspondingly subdued growth in the sector. Following a decline in sales in the second half of 2017, the business climate for manufacturers did improve slightly in the first half of 2018, but the bottom line is that furniture sales have stalled, especially within Germany. While the year began distinctly positively on the back of imm cologne, a significant slowdown in business subsequently set in.
From January to June, sales in the sector reached approximately Euro 9.1 billion, just 1 per cent higher than in the same period of the previous year. Following a 0.7 per cent fall in sales for 2017 as a whole, marked in particular by a negative trend in the second half-year (–1.6%), German furniture manufacturers were thus able to generate slight sales growth, but the situation remains disappointing.

Growth stimulus comes from abroad
This marginal increase in sales was exclusively attributable to international business, since sales outside Germany grew in the first six months by 2.7 per cent in comparison with the same period of the previous year. Domestic sales, on the other hand, stagnated with a minimal rise of 0.3 per cent. Export business benefitted from revived demand in key European sales markets and, increasingly, from the positive economic development in the major growth regions outside the EU. Almost one third of German furniture exports are now sold to non-EU countries.

Results of the latest VDM survey
In summer 2018, the VDM conducted a survey of the economic situation faced by companies in the sector. Participants rated the current business climate as satisfactory (34%) to poor (40%), with only 26 per cent judging it to be good. Compared with summer 2017, the situation for business had worsened in the view of 51 per cent of those surveyed.

State of export business better than domestic market
The disparity between the domestic market and export business is also reflected in the business survey. While most respondents (57%) judged the situation for domestic business as poor, an overwhelming number of manufacturers considered the situation for export business to be good (29%) to satisfactory (56%).

The current difficulties in domestic demand are largely confirmed by the furniture retail sector. Naturally, the long period of high temperatures moved many activities outdoors, but still this explanation falls short. To discover a little more about this, the VDM commissioned a representative study from the prestigious market research institute Kantar TNS, which put the furniture buying behaviour of Germans under the microscope. We were particularly interested to learn where people seek information about furniture and where they buy it. Do they look at advertising supplements in daily newspapers or rather retailers’ websites? Are people increasingly buying furniture online, or is the official sales channel statistic correct, which has been citing an almost stable figure of between 7 and 8 per cent for several years?

Customers increasingly seek information online
First, a look at the information sources. Overall, the furniture store itself – that is to say, looking at furniture in person – remains the most important source of information (68%), followed by brochures from furniture showrooms (54%). But 48 per cent of all those surveyed now use the Internet as a source of information and inspiration. In the younger target groups (<40 years old), the significance of the information source sees a clear shift, with the Internet dominating (77%) but furniture stores still being used by 63 per cent.

When it comes to formal educational attainment, there is a clear correlation with the information sources used. Those with a lower level of education favour brochures and advertising from furniture stores. The higher the level of education, the more buyers actively seek information online.

80% have bought large furniture items in the past 5 years
Online shopping or a trip to the shops? Generally speaking, over 80 per cent of Germans have bought relatively large items of furniture in the past five years. As can be expected, this proportion tails off with increasing age. Of those who bought furniture, 75 per cent carried out this latest transaction in a furniture store. Just under 10 per cent of shoppers bought from a purely online retailer and only 4 per cent purchased via the website of a furniture retailer. This gives a 14 per cent share of sales now taking place online and thus double the figure given out by the official sales channel statistics. In terms of online shoppers, people living alone and the under-30s lead by a clear margin. As young people get older, they are unlikely to move away from online shopping for furniture, and new “Internet savvy” consumers enter the market, the “normality threshold” for the remaining age groups is also expected to fall. There is therefore clearly still a great deal of potential for online furniture sales, and the industry and trade would be well advised to exploit this potential through engaging concepts and information suited to the target groups, moving away from discount and clearance promotions.

Additional online potential
We also see the growth of online business as offering opportunities for the furniture sector as a whole. Firstly, the fixation on prices and discounts is not as pronounced online as in highly concentrated bricks-and-mortar retail. Secondly, the short delivery times and short-notice availability typical of online trading tend to be served more flexibly from internal German sources than from Asia.

Official assessment: sales in the individual segments
According to official statistics, the individual segments in the German furniture industry developed unevenly between January and June 2018. Kitchen furniture manufacturers recorded sales growth of 4 per cent to around Euro 2.5 billion. The office furniture industry reported a distinctly positive result with sales of around Euro 1.1 billion (+7.9%). Manufacturers of shop and contract furniture saw a year-on-year increase of 7.2 per cent and generated sales of around Euro 920 million.

Manufacturers of upholstered furniture registered a noticeable decline, with sales falling by 5.3 per cent to around Euro 480 million from January to June 2018. With a drop of 1.6 per cent to Euro 3.7 billion, the sales performance in household furniture, other furniture and furniture parts was also more negative than the industry average. The smallest segment in the industry – mattresses – recorded the most significant decline in sales of 12.8 per cent to Euro 400 million. This must, however, be put in the context of the above-average growth in sales in this segment in recent years.

Furniture industry generates new jobs
We now take a look at the employment figures for the industry. The 482 businesses currently operating with more than 50 staff (–2.2%) employ 84,300 men and women, which is slightly above (+0.7%) the previous year’s level. Approximately 600 new jobs have been created in the industry in the last year, despite the difficult market conditions.

Compared with the same period of the previous year, German furniture exports in the first half of 2018 grew by 2.2 per cent to Euro 5.5 billion. With an increase of 1.2 per cent, sales to EU countries only crept slightly above the previous year’s level, thus developing much more sluggishly than exports as a whole. Having said this, exports to the German furniture industry’s largest external market, France, achieved growth of 3.5 per cent, and the Dutch (+6.2%), Polish (+10%) and Spanish (+6.1%) markets also saw positive developments from the perspective of the German furniture industry. However, furniture exports to the important sales markets of Austria (–1.3%) and Switzerland (–3.8%) declined.

Negative trend in Great Britain
The furniture industry also clearly felt the negative effects of the Brexit negotiations and the fall in the pound over the course of the previous year, with furniture exports to Great Britain contracting by 8.9 per cent in the first half of 2018. No other major export market performed as badly as the United Kingdom from the perspective of German furniture manufacturers.

Boom in exports to the USA, China and Russia
The key growth markets for German furniture now lie outside the EU. The outstanding performance of German furniture manufacturers in the largest growth markets of the USA (+9.5%), China (+25.9%) and Russia (+14%) is particularly noteworthy. Given the size of each of these markets and the strong demand for high-quality furniture, these figures are sure to see further growth. Other markets outside Europe, such as Canada, Mexico, Japan, South Korea and Singapore, are currently developing well, although exports to these countries are still at a relatively low level. Overall, the non-EU market is expected to become an important driver for growth for the German furniture industry in the years ahead.

Export ratio up by 32.6%
The industry’s export ratio – that is to say, the proportion of goods shipped directly abroad by domestic furniture manufacturers against total sales by the industry – climbed to 32.6 per cent in the first half of 2018, thereby achieving a new record. The corresponding figure for the first half of 2017 reached 32.1 per cent. This means that the furniture industry’s export ratio has doubled since the turn of the millennium.

Furniture “made in Germany” highly regarded
The success of German furniture manufacturers abroad can be put down to the quality, reliability of supply, design and individuality of our products. German manufacturers often have a better grip on processes and logistics than their international competitors. These are important selling points for consumers – whether they be in Shanghai, St Petersburg or San Francisco.

Greater support for exporters
In view of the increasing importance of exports for the industry, the VDM will be expanding the support it offers exporting companies. A new VDM Export working group aims to encourage dialogue between individual manufacturers, identify the main markets and coordinate export and trade fair activities for the industry as a whole. Information days and workshops for furniture manufacturers will be organised to share industry-specific expertise relating to the individual export markets. Practical tools will also be made available to support the successful involvement of German furniture manufacturers abroad. These additional export activities are intended to help German furniture manufacturers to grow their market share on the world market.

Slight increase in imports
Import competition remains strong: after German furniture imports achieved growth of 0.8 per cent to Euro 12.7 billion for 2017 as a whole, in the first half of 2018 they rose by a further 0.6 per cent to Euro 6.6 billion. However, the trade deficit reduced by 8.1 per cent to around Euro 1.2 billion in the same period as a result of substantially increased exports. Overall, furniture imports to Germany from eastern Europe are increasingly gaining ground from their Asian competitors. Poland enjoyed growth of 7.4 per cent and, as has been the case for a number of years, remained by far the largest source country in terms of furniture volume. Nowadays, more than one in four pieces of furniture (26.3%) imported into Germany originates from our neighbour to the east. The Czech Republic remains the third-largest source of imports with a slight rise of 0.7 per cent. Altogether, imports from EU countries achieved a significant increase of 1.8 per cent. By contrast, imports from Asia fell disproportionately (–5.9%), especially from Vietnam (–12.3%), Taiwan (–13.9%) and Indonesia (–9.8%). Imports from the second-largest originating country, China, declined significantly with a drop of 5.2 per cent. The structure of German furniture imports is highly concentrated, with around 56 per cent of all German furniture imports now attributable solely to the three largest supplier countries: Poland, China and the Czech Republic.

56% of all imports from Poland, China and the Czech Republic
Almost two thirds of participants in the VDM survey expect the business outlook to remain the same in the six months ahead. 24 per cent anticipate an improvement in the situation and just 12 per cent a worsening. According to the assessment of the respondents, the major factors affecting the trading climate in the next six months will be increasing prices of raw materials (33% of respondents), a shortage of skilled personnel (27%), growing pressure from imports (18%) and increasingly protectionist trade policies (9%).

Rising material costs hit the industry hard
The rising cost of materials as regards solid wood are seen as a particular obstacle for development in the sector. Companies in the German furniture industry taking part in the survey report an average increase of 9 per cent in the cost of solid wood when compared with summer 2017. Prices of wood-based materials increased by 5 per cent in the same period, with logistics costs also up by 5 per cent and staffing costs by 3 per cent. Given the market power of purchasing associations, it is not possible to pass on this rise in costs in full to the German furniture retail trade.

Forecast for the current year: +1%
While the contribution of foreign markets to German furniture industry sales is expected to remain positive in the second half-year, in view of the very significant growth in recent times, there are clouds on the horizon as far as domestic trade is concerned. Consumer confidence in Germany is also on the wane. Economic forecasts for this year have recently been revised downwards by leading economists. On this basis, we continue to anticipate sales growth at the end of the year by around 1 per cent in 2018.

 

With “Toward Utopia”, Heimtextil is setting the course for the new trend season 2019/2020. As part of the official Heimtextil Trend Preview on 4 September 2018 in Frankfurt am Main, London-based studio FranklinTill presented the design themes for the upcoming international trade fair for home and contract textiles (8-11 January 2019).

In addition to the British trend researchers, Anne Marie Commandeur from the Stijlinstituut Amsterdam and Anja Bisgaard Gaede from SPOTT Trends & Business also participated in the forecast for perspectiverelated interior design, which applies globally. Together with the Heimtextil management team, they provided initial insights into future style worlds. Stefan Weil from Atelier Markgraph, the studio that designs the spatial staging of Heimtextil trends, gave a preview of the new “Trend Space' and emphasised the importance of spatial communication for Heimtextil.
 
The Heimtextil trends 2019/2020 describe a world in which we live according to new standards. We try to escape complex lifestyles and have a desire for deeper relationships, spiritual confirmation and greater meaning. “We live in an era of uncertainty and mistrust in the established order. As a reaction, we try to live a meaningful, conscious life based on positive relationships. We take responsibility for our lives and look for ways of life that fulfil our value system in search of a new utopia – a society that aims at promoting the well-being of all its citizens”, explains Caroline Till, co-founder of FranklinTill Studio. The search for new lifestyles in which mindfulness and sustainability play an important role will be the challenge of the coming decades.

“Toward Utopia” shows which individual routes we can take on the way to finding a modern utopia: those who seek temporary time-out from the internet to reconnect with nature and defy the elements (“Go off-grid”), while others escape from the real world into a virtual world (“Escape Reality”). Some withdraw and find security in pure, minimalist rooms (“Seek Sanctuary”). “Embrace Indulgence” offers a nostalgic answer to today’s uncertain times and surrounds us with beauty and luxury. And the unconditional hedonistic desire for play (“Pursue Play”) is probably hidden in all of us.

„Trend Space“ in hall 3.0
In the newly designed “Trend Space” in hall 3.0, Heimtextil will be demonstrating how the various scenarios can be lived out. Here, the trade fair presents five trend themes that represent a combination of inspiration, interaction and knowledge transfer and showcases trailblazing projects and design initiatives. The “Trend Space” also presents current colour trends. The immersive staging on site and the Trend Book, which is available as of now, document the poetic properties of colour as well as its inspiring, artistic and aesthetic power in design.

‘The new “Trend Space” at Heimtextil convinces with interactive and tactile worlds of experience. Visitors are playfully inspired, involved and motivated to get to grips with futuristic, spatial design concepts’, says Olaf Schmidt, Vice President Textiles & Textile Technologies at Messe Frankfurt, looking ahead to the future. ‘This creates a comprehensive picture of the design of future spaces and we can get some answers to the questions of how we will interact, consume, live and work in the future’, continues Schmidt.
 
An overview of Heimtextil trends 2019/2010:

PURSUE PLAY
In an era of uncertainty, political instability and environmental problems, we satisfy our need for optimism and creativity with play. Playing helps us to find meaning in the midst of chaos and turbulent times. Designers thus playfully focus on uninhibited, tactile interactions and experiments. Daring, cheeky product, room and fashion designs are loosened up with a touch of humour. Shapes and colour palettes take on a surrealistic note and the concept of L’art pour l’art once again commands attention. The use of rich primary colours is playful and naive, while the combination of high-gloss and matt textures creates a palatable visual appeal. Abstract forms, bold play with patterns and exuberant textures challenge us to be imaginative and invent our own stories.
 
SEEK SANCTUARY
In the midst of our intense, hyper-connected everyday life, more and more people are looking for ways to “cut off” all connections – for utopian havens of peace amidst all the noise. They retreat to urban oases where they can switch off to find relaxation, a new perspective and clarity. However, this essentialism does not mean that we have to categorically reject products. Rather, is it about the targeted search for and appreciation of design pieces and concepts that are simple, beautiful, functional and high quality. The combination of a minimalist colour palette with carefully selected structural details, curvy shapes and upholstery gives rise to comfort and warmth.

GO OFF-GRID
The search for a new closeness to nature leads to a hankering for experiences beyond a networked everyday life. It is an attempt to live more naturally, to return to the origins of humanity and to live in harmony with nature – and not against it. It is about cross-border experiences in remote locations, supported by high-tech survival equipment. The combination of hard-wearing technical aspects of outdoor textiles and workwear requires a sophisticated, utilitarian aesthetic and promises durability and functionality. Colours and patterns inspired by nature celebrate the supposed “imperfection” of the natural.
 
ESCAPE REALITY
A new utopia can be rooted in both the digital and the real. The potential of virtual and extended reality blurs the boundaries between fantasy and reality. We are working on a technology that enables deeper and more lasting experiences in daily life. Shimmering, iridescent surfaces have a transformative and optimistic quality, are transformed by movement and create a fleeting, intangible form of motion. Mother-of-pearl effects and high gloss create a unique dynamic in designs that seem to achieve the impossible by appearing fluid and in suspension as a solid form that could literally dissolve at any time. Ethereal combinations of light pastel shades create a surrealistic, hyper-real mood.

EMBRACE INDULGENCE
High-quality materials and rich colours, a modernist style and solid craftsmanship combine to form a utopian vision of the future of luxury. In a modern age marked by uncertainty, we look back through rose-tinted glasses to earlier epochs, remember the comfort of the good old days, long for security and surround ourselves with a calm, inviting aesthetic. Cleverly combined, honest materials, creatively implemented ideas and simple opulence form a new kind of comfort as well as give rise to intimacy and a sense of tangibleness.

 

• Capacities are relocated to Southeast Asia

Hong Kong (GTAI) - Thanks to President Trump, the emigration trend from the PRC is getting an additional boost. As far as logistics companies are concerned, Beijing is getting increasingly worried.

Already a decade or so ago, China began to relocate production facilities. As wages increased in the rich coastal cities, more and more companies were forced to move their factories inland or to so-called low-wage countries. There salaries, but also land, were more affordable. The environmental requirements were meanwhile laxer too.

The southern Chinese Pearl River Delta - probably the largest industrial settlement in the world - also felt this trend. In the 1980s and 1990s, investors from neighboring Hong Kong had outsourced virtually all of the industrial production of the Special Administrative Region (SVR) there. But around 2008/09, there came a change of opinion. 

In addition to cost pressures, they got headwind from local governments. In booming cities like Shenzhen, where land was becoming increasingly scarce, light industry companies were no longer welcome. Also polluting and power-consuming industries, such as the production of ceramics, were moved out with more or less gentle pressure.

Companies pursue hybrid strategy
Many companies followed a hybrid strategy. The production of higher quality items  remained in the Pearl River delta, which has recently became named as the Greater Bay Area. The production of mass products, on the other hand, was shifted to cheaper locations. Some manufacturers went to Southeast Asia. Especially in Vietnam many companies found a new home.

This relocation process has been steadily progressing ever since. With the ever-widening trade conflict between the People's Republic of China and the US, it now receives additional impetus. Many investors have been shifting parts of their production from their Chinese production cities to their Southeastern Asian factories since the announcement, at the latest since the introduction of the first tariffs.

This is possible in the short term and to a limited extent, initially without major investments, as long there is still enough free manufacturing capacity in the ASEAN (Association of Southeast Asian Nations). That should be true in most cases. In addition, in the second half of 2018, investors will also withdraw production equipment such as machines from China and send them to Southeast Asia.

Relocation preferably to Vietnam, Malaysia and Laos
At the end of July 2018, the Hong Kong-listed carrier Kerry Logistics reported in the South China Morning Post that its business had noticeably picked up as a result of the trade dispute. The customers would relocate production steps especially to Malaysia, Vietnam and Laos. In the aforementioned countries, an increase in export activity is expected in the second half of 2018.

According to the president of the Hong Kong Young Industrialists Council, the member companies are relocating their production mainly to Malaysia and Vietnam in order to avoid rising costs and the tariff conflict. The CEO of the Hong Kong fashion producer Lever Style told reporters that already now only 50 percent of its production comes from the People's Republic of China. Eight years ago, the quota was still at 100 percent.

This so-called "China Plus One" strategy is therefore a natural development. The companies pursue it for years not only for cost reasons, but also to spread their risk, which now turns out to be the right good one. For China this development is not threatening at this time. The country is aiming for a permanent higher positioning of its industry anyway. As part of the "Made in China 2025" strategy, the People's Republic wants to become the technological world leader even in ten sectors.

But if the accelerated relocation process increases unemployment and stutters the economy, Beijing may be come under pressure. The negative effects of the trade conflict are already being felt. Stock prices plummeted and the Chinese yuan lost significant in value against the US dollar, what could trigger a capital flight.

• Prestigious awards, special events, Trend Forum, networking platforms

Kind + Jugend, the leading international trade fair for high-quality baby and toddler products, will once again bring together around 1,200 providers from approximately 50 countries with over 22,000 trade visitors from all over the world. As usual, the spotlight will be on new products and further developments, which the innovative industry regularly presents at the trade fair. Kind + Jugend is bundling its event programme under the heading "Support Circle" in order to systematically document this outstanding pace of innovation within the industry and provide trade visitors with quick access to the most important information. Interesting events and special shows aimed at the needs of the industry offer comprehensive information in a pleasant atmosphere.    
 
Awards
New products and further developments are important market drivers in the innovative baby and children's sector. Kind + Jugend is an excellent marketing platform for companies that want to distinguish themselves with innovations at every phase of their market participation. A key instrument are the award presentations at the trade fair, which are accompanied by attractive special events.

The KIDS DESIGN AWARD honours outstanding concepts and designs in the area of products and furniture for babies and children. This year, a top-class jury has once again selected the most inventive and trendsetting prototypes from a large number of applications. The ten nominated designs show how creative and visionary the industry thinks. The winner will be announced on the Trend Forum stage on the first day of the trade fair on 20 September 2018, at 1 pm. The related special event can be seen in Hall 11.1.

The Innovation Award has been highly regarded within the industry since its inception in 2005.It honours outstanding new developments that are expected to come on the market in the coming season. This year, the international jury has selected the award recipients from almost 200 applications, which is a new record. Prizes will be awarded in eight categories on the Trend Forum stage on the first day of the trade fair on 20 September 2018 at 10 am. The accompanying special event in Hall 11.1 will present all of the award recipients as well as the nominated products.

The Kind + Jugend Consumer Award opens the floor to consumers. Since 2014, international partner magazines and portals have been asking parents about their favourite products. This practical insight into the current requirements of parents and children established itself quickly at Kind + Jugend as a significant indicator of the industry. The surveys are carried out in eight different countries and in various categories, ranging from accessories and safety seats to baby carriages and furniture. The special event with the winners of the Consumer Award takes place in Hall 10.1.

Special events
Besides the special events for the awards, two other presentations show which topics and creative approaches are having an impact on the industry.

The Connected Kidsroom deals with the topic of digitalisation. The event, which was shown for the first time last year, presents ideas and technologies that can be used in baby and children's rooms for greater safety and well-being. As in the previous year, an equally interesting and inspiring presentation also lies ahead for 2018 and will take place in Hall 11.2.

The special DESIGN PARC event will also be stimulating. The Design Parc exhibition features objects, furniture and toys with an extraordinary design and which have already reached market maturity. Eleven different products, including accessories, toys and children's furniture, will be sure to also delight visitors at Kind + Jugend this year with their innovative design.
 
Trend Forum
Which products will be important for parents and children in the future? Which trends will be reflected in children's rooms? Which colours and materials will provide inspiration? The Trend Forum prepares these and other topics that are relevant for the market in keynote speeches. Renowned experts report from practical experience and take a look into the future. Questions about marketing, brand management and licensing are also on the agenda. The experts on stage include trend researchers from GfK, Trendbible and The Insights People. The German Association of Children's Equipment Manufacturers (BDKH) will also provide information about an important topic: the effects of the general data protection regulation. In addition, exhibitors have booked information slots for product presentations.   

All presentations will be held in English and are interesting for both exhibitors and trade visitors alike. The Trend Forum is in Hall 11.1.

 

As disclosed in an agreement signed on 18 July 2018 by the organisers of Texcare Asia and the China Laundry Expo, the two trade fairs will merge into a single show in a win-win arrangement to integrate industry resources.
 
The new joint-venture fair will be the largest annual industry event covering the textile care and laundry chain in Asia. The first edition will take place in September 2019 at the Shanghai New International Expo Centre and will be jointly organised by Messe Frankfurt (Shanghai) Co Ltd, Unifair Exhibition Service Co Ltd, the China Laundry Association, and the China Light Machinery Association.  
 
Mr Wolfgang Marzin, President and CEO of Messe Frankfurt Group, said: “The merger is fantastic news for the textile care industry in Asia as a whole and also for the Messe Frankfurt Group. By integrating Texcare Asia’s extensive resources with those of the China Laundry Expo, we will provide a larger and more complete platform for the industry to converge upon. The new show will provide coverage across the entire supply chain, including dry cleaning, dyeing, detergent and disinfecting chemicals, leather care, textile rental, digital solutions and much more.”
 
Ms Xiuping Han, General Manager of China Unifair Exhibition Services Co Ltd added: “The laundry industry in China faces numerous challenges, such as the tightening of sewage treatment and disposal regulations, while opportunities are also arising in the form of increased demand for energy saving technologies. By merging the China Laundry Expo and Texcare Asia under a single banner, we will provide an ideal platform to facilitate industry development and address these challenges and opportunities.”   
 
The annual China Laundry Expo was founded in 2000 and is held on a rotating basis between Beijing and Shanghai. Organised by the China Laundry Association and Unifair Exhibition Services Co Ltd, the show receives significant government and commercial sector backing. The 19th edition is held at the Shanghai New International Expo Centre over the next three days and will play host to more than 220 exhibitors representing around 500 brands from over 10 countries and regions. The fair is also expecting to welcome over 20,000 trade and industry visitors to an impressive 23,000 sqm of exhibition space.   

Key product categories of the China Laundry Expo include laundry equipment, accessories, chemicals, consumables, leather care products, energy-saving and environmental protection equipment, informationbased intelligent products and solutions, and much more. Not only do these product categories cater to the purchasing demands of visitors around the globe, but the strong variety also serves to attract more suppliers and industry players.
 
With a similar focus to the China Laundry Expo, Texcare Asia made its debut in Singapore in 1998 and was introduced to Hong Kong in 2002. The fair then move to China in 2005 in Beijing and has been located in Shanghai since 2013. With the strong international network and industry support from the mother fair, Texcare International, the China event is now recognised as Asia’s biggest laundry and dry-cleaning show. It has served as a biennial meeting point for textile care manufacturers, suppliers and professionals to network, trade, conduct business, and catch up with industry developments.   
 
The fair also holds a unique position as a platform for providers of textile rental services, training services for institutions, and machinery for the cleaning of carpets, floor coverings, upholstery and buildings. By combining product groups from the China Laundry Expo with those of Texcare Asia, the merged platform promises to deliver a comprehensive value added experience for its customers and visitors.  
 
The expanded product portfolio and merging of resources mean that the newly merged show is predicted to attract an impressive 300 exhibitors and 25,000 industry visitors across 30,000 sqm of floor space when it opens its doors in September 2019.   
 
For further details, please visit www.texcare-asia.com, or contact texcareasia@china.messefrankfurt.com.

• Franchising takes off, more and more German retail chains discover Italy

Milan (GTAI) - The Italian retail sector is modernizing and the franchise economy is growing. Italian franchise systems are gaining ground. New modern shopping centers, including the largest in Europe, create space for new shops. German retail chains are expanding in many segments, from discount food and other consumer goods to services. Northern Italy is considered a popular test site. High quality and a price advantage are the keys to success.

The Italian retail sector is changing. The number of classic corner shops is declining, the modern organized retail trade is growing. The franchise economy in particular is developing positively. Beyond the classical areas such as food and fashion, various Italian franchise systems are spreading more and more visibly in the big cities.
 
According to the industry association Assofranchising, the franchise industry had a turnover of approximately EUR 24.6 billion in 2017. This represents an increase of 2.6 percent compared to the previous year and an increase of 5.7 percent since 2014. With a similar number of systems (929 in Italy, 972 in Germany), the German franchise industry generated almost five times as much turnover. One reason for this is that German franchise systems have on average more than three times as many businesses per franchise.

Development of the franchise economy in Italy

	2016	2017	Change (in %)
Sales (Euro Mio.)	23,930	24,545	2.6
Franchise systems	950	929	-2.2
Businesses	50,720	51,671	1.9
Italian businesses abroad	7,871	10,079	28.1
Italian businesses abroad (min. 3 companies)	169	179	5.9
Foreign systems in Italy	61	71	16.4
Employees	195,303	199,260	2.0
Average size of systems in Italy (number of companies)	53.4	55.6	4.2
Average size of Italian systems abroad (number of companies)	46.6	56.3	20.9

   Source: Rapporto Assofranchising 2018

But the segment is catching up in Italy. Italian franchise systems are expanding, also abroad. Outside Italy, their number increased by around 6 percent in 2017, while their average size (measured by the number of businesses) increased by around 21 percent. The domestic average dimension is also growing. The country is also becoming more attractive for foreign franchisors. In 2017, the number of foreign franchise systems increased by 16 percent. The relevant trade fair is the Salone Franchising, which will take place from October 25th to 27th 2018 in Milan.   

New shopping centers are driving the developments forward
Developments in the retail sector are accompanied by new construction projects. A number of new shopping centers are currently under construction in Italy, creating space for the new generation of franchises and retail chains. The major CityLife project on the former Milan exhibition grounds is a current example. In addition to two of the three planned skyscrapers (including Allianz's new headquarter in Italy), a new shopping center was inaugurated in autumn 2017. Particularly in the catering sector new Italian chains, which are expanding nationwide, can be seen. A new gastronomy floor with restaurants and cafés in the middle price segment was recently inaugurated at the Termini railway station in Rome.

A number of modern shopping centers are still under construction, including the new Westfield Milan. Project operators describe it as the largest shopping center in Europe. With an investment EUR 1.4 billion Westfield Milan is to be inaugurated in 2020. The majority of the new construction projects are located in the larger cities in the north, but Rome and Naples will soon receive new shopping centers also.

Shopping centers under construction in Italy

Designation	Investment (Mio. Euro)	Area (1,000 sqm)	Completion	Remarks
Westfield, Milan	1,400	60	2020	http://www.westfieldcorp.com
Maximo, Rome	300	61	2019	Cushman & Wakefield
Emilia Shopping District, Parma	200	74	2019	http://www.sonaesierra.com
Maximall Pompeii, Napoli	150	200	2019	http://www.maximall.it/pompeii
Falcon Malls Cascina Merlata, Milan	n.a.	65	2021	http://falconmalls.it
Falcon Malls Concordia, Milan	n.a.	131	2021	http://falconmalls.it
Waltherpark Shopping - Bozen	23	k.A.	2021	https://waltherpark.com

    Source: Research of Germany Trade & Invest

Opportunities for German retail chains
Another trend in Italy is the expansion of German retail chains. One growth area is the market for discount foods. According to Nielsen, discounters had a market share of 17 percent of the sold food at the end of 2017. The market leader is Eurospin from Italy, followed by Lidl. In 2018 Aldi opened its first store in northern Italy and by the end of 2018 it is planned to open 45 stores. Lidl is defending itself against its new competitor with planned investments in Italy amounting to EUR 350 mio for a new inner-city store concept. A total of 40 new points of sale are planned, and a further 50 stores are to be modernized.

Both German supermarket chains confirm that a local strategy for Italian gourmets is indispensable. Lidl sources 80 percent of its food products from Italy, while Aldi's share is almost as high at 75 percent.

In terms of price, the recipe for success of the German retail chains is somewhat different from Germany. Although German retailers continue to score with a good price-performance ratio, the focus in Italy is on the mid-price segment.

The latest example is the drugstore chain dm. The first branch was inaugurated at the end of 2017. There are plans to open 100 stores in northern Italy by 2020. dm offers not only a price advantage over its Italian competitors, but also high-quality products. In addition, there are hardly any "one-stop shops" in Italy, which are also drugstores, but also sell beauty products, organic and natural products as well as baby products.   

The Douglas perfumery chain is expanding also in Italy. At the end of 2017, Douglas' parent company completed the acquisition of two of the leading perfumeries in Italy, Limoni and La Gardenia.    

Fielmann is another example of a German chain that has conquered the Italian market in recent years with high-quality products and a price advantage. With entry into the South Tyrol market and ongoing expansion in northern Italy, Fielmann is popular with Italian consumers despite the large competing manufacturers of glasses in Italy due to its price advantages.

Germany's successful model is not limited to food and other consumer goods. The Berlin-based company Flixbus is an example that the concept of quality and price competition can also be successfully applied to the service sector. Flixbus has been in Italy since 2015 and the number of passengers is increasing constantly. In 2017, 40 million Italians were on the road with Flixbus, twice as many as the year before. Italy is the fastest growing market among 26 countries for the company.

For most people, blockchain technology is still quite an abstract concept. We can think of it as some kind of virtual database that saves all transactions in so-called blocks. This creates transaction or block chains, which are perpetuated with every subsequent transaction. Through the high degree of transparency, the system can do without a central controlling entity, as it is permanently controlled by many. The blockchain can be changed afterwards. So far, this technology has been used mainly to materialize cryptocurrencies, but it increasingly paves its way also through the fashion industry. The following section outlines a few blockchain concepts from the fashion industry:
 
Blockchain makes fashion forgery-proof
The Berlin-based startup business Lukso has created an opportunity to take action against trademark counterfeiting and forgeries by using blockchain. A chip replaces traditional QR codes, which can be copied easily. The data stored on the chip are locked in and thus cannot be edited. Thus, the authenticity of the garment can be verified. The founder of Lukso, Fabian Vogelsteller, used his experience he had gained as a developer for the Ethereum cryptocurrency in order to develop this chip.
„The Fashion industry is the perfect industry for a blockchain-network, since it is forward thinking and eager to try out new things. Especially the interaction between users is an important factor here. Also forgery-proof is still an unsolved problem,“ explains the founder of LUKSO, Fabian Vogelsteller.    

The data stored on the chip can be analysed, but not read. Thus, the information about the products is disclosed in the blockchain in a transparent way for the customers and retailers. However, by not disclosing the system, the information can neither be changed nor copied, making the history of the garment traceable at any time. This technology provides protection against counterfei¬ting in particular with regard to brand and luxury goods. The system is also suitable for second-hand shops selling high-quality products, as the buyers are given a guarantee that they have bought a genuine product.

…and its origin transparent
SourceMap is another development using blockchain for the fashion sector. SourceMap is a kind of social network based on blockchain technology developed by the software company Provenance.
 
It allows everyone from the farmer to the textile mill to the cut-and-sew factory to communicate directly with the brand that buys from them, and it is using Provenance’s blockchain technology to verify those communications. They envision a world in which every fashion product has traceable, transparent origins. The developers promise that for example organic and Fair Trade certifications cannot be faked. The designer Martine Jarlgaard from London produced smart labels from Provenance using blockchain technology already in 2017, allowing the customers to scan these labels to track every step in the production.
 
Also, the fashion label Babyghost has launched a kind of social network. With specific chips woven into the garments, the customers are able to track the entire history of the clothes using their smartphone. The blockchain technology behind that even allows the consumers to add their own photos, videos and messages. This way, each garment gets its own story that is accessible at any time.

Berlin-based business wants to revolutionize online shopping experiences with blockchain
Wysker is an app developed by Tobias Haag and his team from Berlin to revolutionize online fashion shopping. With the blockchain system, users can decide on whether and what data they want to disclose to the retailers. Those who provide data will be rewarded with discounts. The Wysker app itself shows only photos, prices and the providers of the products. Those who find what they are looking for will be forwarded to the respective business partner. The developers expect that the bonus model will become a small revolution. Every app user is given bonus points, so-called Wys tokens. The more intensive the app is used, the more tokens are given. The tokens can be redeemed with the participating retailers. They are based on blockchain technology and connected to the Ethereum cryptocurrency. The value of the bonus points increases with the popularity of the app, as the number of tokens is limited. Thus, increased demand leads automatically to a higher value. The app is still in the initial stage. However, many users have already been generated during the first few months.
 
The fashion industry shows once again its innovative strength and uses blockchain to embark on new paths, with blockchain technology being a means to the end. It creates transparency that can reward the users and bring new shopping experiences.

Further information:
https://www.lukso.io/ 
https://www.wystoken.org/ 
http://martinejarlgaard.com/Home 
https://www.mybabyghost.com/ 
http://www.sourcemap.com/ 

• The important trade fair platform for entry into the Chinese consumer market with China's most influential consumer group for the fashion and beauty sector with the strongest growth in consumption - the millennials - as target group
• The international fashion showcase for decision makers with an overview of na-tional and international fashion brands
• Strategic market development through comprehensive visitor marketing for inter-national brands at CHIC

 
CHIC, China International Fashion Fair presents around 800 exhibitors in an exhibition space of approx. 50,000 sqm (CHIC in March 100,000 sqm) in two halls from 27 to 29 September 2018 at the National Exhibition & Convention Center in Shanghai.
The current conditions for international fashion companies in the Chinese market offer significant improvements for international brands. Import tariffs will be lowered from 15.9% to 7.1% to further promote the import and upgrade of the industry.  

The McKinsey study "THE `Chinese consumer´ no longer exists” defines Chinese consumers no longer as interested only in low prices, but as selective, healthconscious with diverse shopping hab-its and preferences. The fashion awareness changes to an individual sense of style, influenced by international and national trends. China's millennials are the WORLD'S most influential consumer group, with a 16% share of the population, driving consumption growth in the Chinese market and contributing more than 20% from today until 2030.  
 
According to the edition's motto "New Makers", Asia's leading fashion fair is picking up on the latest changes in the Chinese fashion market and providing the essential tools for the Chinese market. The new, young design of the fair, which was launched in March this year at CHIC, is being ex-panded. The individual sections of CHIC present the latest trends in the Chinese and international fashion market. CHIC connects and brokers partnerships and launches the new generation gar-ment industry, which builds on high-tech strategies and interlinks industrial production with modern information and communication technologies, relying on intelligent, digitally networked systems in self-organized production.

The individual fashion areas of CHIC  
FASHION JOURNEY puts the focus on interna-tional exhibitors. In addition to the large Italian pavilion, the French pavilion "Paris Forever" and the Korean show-inshow "Preview in China", in-dividual participants from Poland, the UK, France, Italy, Spain, Japan and the USA use CHIC as a bridge in the Chinese market. The next German group participation is planned for March 2019, whereby Germany will also be rep-resented with individual brands such as ESISTO in the area NEW LOOK.

IMPULSES, CHIC's designer section, features emerging designer brands such as Junne, Hua Mu Shen, King Ping, Anjaylia, Mao Mart homme, Tuffcan, etc.

The SUSTAINABILITY ZONE, first showcased at CHIC in the fall of 2017, is receiving even greater emphasis due to the increasing environmental and health awareness of Chinese consum-ers, featuring sustainable supply chain solutions, sustainable innovation and sustainable fashion collections. Programs such as Chemical Stewardship 2020, Carbon Stewardship 2020, Water Stewardship 2020 and Circular Stewardship 2020 are presented. The womenswear section NEW LOOK of CHIC presents next to the leading Chinese brands like AVRALA, and CMH also international brands like Saint James from France, ESISTO from Ger-many, Trenz Eight from Canada or PN JONE, USA.

Beside the suppliers of classic menswear, URBAN VIEW, the menswear section, also includes casualwear brands like NRDMA and SUPIN as well as bespoke companies like H. Pin& Tack, Jin Yuan Yang, Fa Lan Qian Mu, Long Sheng and DANDINGHE.
CHIC YOUNG BLOOD shows young lifestyle brands, KID'S PARADISE offers e.g the largest fashion group in China for children's fashion XTEP KIDS.

SECRET STARS (fashion accessories), SHANGHAI BAG (bags), HERITAGE (leather & fur), SUPERIOR FACTORY (ODM) and FUTURE LINK (services) complete the fashion offer at CHIC. FUTURE LINK gathers fashion service providers for among others supply chain solutions, smart retail and smart production, RFID, laser technology and data utilization.

Visitor management
On the rise in China's retail scene, multi brand and custom stores are the fastest growing offline sector. The number has increased significantly in the last five years from less than 100 to more than 5,000 stores. Exclusive shopping experiences and an individual offer are important. Custom-ers value a wide range of products: a mix of international and national exclusive brands is the most common concept.

The high investments of the CHIC organizers in the visi-tor management for the fair pay off: CHIC has a per-sonalized trade visitor database of over 200,000 con-tacts, which are used intensively for the visitor marketing in the run-up to the fair for a commercial matching for the exhibitors. At the fair, VIP match making activities will take place especially for selected international brands, that will have the opportunity to present them-selves there and make the relevant contacts in the Chi-nese trade. Meetings are organized among others with multi brand stores and buyers such as The Fashion Door, Dong Liang, Jing Dong, VIP Shop and department stores, and retailers such as Carrefour, Amazon, De-cathlon, Wang Fujing, etc. An important tool for the CHIC visitor marketing is social media; for this special programs are run, in which individual brands are pre-sented to prospective visitors.    

CHIC is visited by representatives of all distribution channels for distribution in the Chinese market, at the last event in autumn 2017 more than 65,722 visitors from all over China and other nations were registered at the CHIC, with a significant increase in multi brand stores.
 
Seminars and shows
The future of fashion business in China will be discussed in a panel of experts as part of CHIC TALKS. Furthermore, a trend seminar from WGSN for FW 2019 and a workshop on bag and shoe production from the Moda Pelle Academy are planned.

CHIC shows provide an overview of selected international brands.

CHIC is organized by Beijing Fashion Expo. Co. ltd. and China World Exhibitions, supported by China National Garment Association, The Sub-Council of Textile Industry (CCPIT) and China World Trade Center.