Textination Newsline

• German fashion demanded
• Shoe chain CCC is expanding

Warsaw (GTAI) - The demand for textiles, clothing and footwear is developing particularly dynamic in Poland in 2016. These items are also popular Christmas gifts. Despite strong competition, Germany remains the third-largest foreign supplier of clothing and continues to grow. The German online retailer Zalando is building its first huge logistics center in Poland. The Discounter KiK is opening further branches. The domestic shoe chain CCC is expanding.

Retail sales of textiles, clothing and footwear are the fastest growing of all product groups in Poland. According to the Statistical Office (GUS) (http://stat.gov.pl), the real growth rate reached 15.8% in the first three quarters of 2016 compared to January to September 2015. The total retail sales rose by 5.3% in the same time. The forthcoming Christmas business is expected to further stimulate the demand for fashion items. The in the current year introduced children's allowance also will heat the purchase power of the Poles.

¹⁾ Estimation, ²⁾ Forecast
Source: Market research company PMR

First and foremost, growing is the demand for common items in the lower, middle and upper segment. Clothing manufacturers however in the luxury category do not benefit from the rising demand. According to the consulting firm KPMG, the poles spent in 2015 about 14.3 billion Zloty (Zl, about EUR 3.4 billion, 1 EUR = 4.1841, average price 2015) for luxury goods, including Zl 2,065 billion for clothing and accessories. These, however, form an important product group and rank second behind passenger cars (ZI 6.974 billion).

The largest domestic clothing company LPP  also felt the fact that the demand potential in the precious segment is limited. The company is known for its brands for everyone, especially "Reserved", which generates almost half (47%) of its revenues. At the beginning of 2016 LPP launched its new premium brand "Tallinder". After the sales however remained below the expectations, LPP announced the gradual abandonment of this project in September 2016.    

Tallinder was supposed to compete with the established gents brands and suppliers of other high-quality clothing names like Vistula, Bytom and Prochnik. The market leader in men's clothing Vistula, which also includes the jewelry chain "W.Kruk" and the brand of women's wear Deni Cler, expects in 2016 (2015) an increase of ZI 590 (518)  million and of its net profit to ZI 37.0 (28.3) million. Bytom follows far behind with projected revenues of ZI 154 (131) million and a net profit of EUR 14.1 (12.4) million.
 
CCC is aiming abroad

Due to the growing demand, the number of specialist stores for clothing is growing, according to GUS us to around 37,100 until the end of 2015 (2014: 35,900) . At the same time the number of stores for shoes and leather goods, which amounted to 8,200 (8,300) in 2015, fell slightly. One reason for this is the proliferation of relevant trade chains, such as the shoe chain CCC, which contributes to a consolidation, and the increasing online trade.

In 2016 alone CCC opens around 40 new stores in Poland and increases its sales area by 20 to 30% annually. In 2016 this will increase by 105,000 sqm and 2017 by 120,000 sqm (net). The trade chain is looking for additional franchisees in other European countries, now also in Asia and the USA. In the Russian Federation CCC wants to open large salons with about 1,000 square meters. According to the chain founder Dariusz Milek in an announcement of the daily paper Rzeczpospolita the presence in Ukraine, Belarus, Kazakhstan and Central European neighbors should be increased too.

The branch networks in Germany and Austria should not be increased further in the near future; In Austria there are already almost all of the targeted total 70 CCC stores.  Due to the lack of profit in these two countries, their share of the group’s total income, which is expected to reach some ZI 3.2 billion in 2016, should not exceed 10%. CCC also relies on e-commerce. After the trade chain had already acquired the online shop for shoes eobuwie.pl, it wants to start in spring 2017 with its own e-shop.

Polish imports of clothing exceed exports. The two main suppliers of textiles, China and Bangladesh, were able to further increase their deliveries to Poland in 2015. Germany also achieved growth and finished third. Slovakia has multiplied its exports. Among the customer countries Germany was by far the most important player with a further significant increase in its demand. The other ranks were followed by the Netherlands, Czech Republic, Austria, Sweden and other mostly European countries.

Source: Central Statistical Office CIS

Germany is not only characterized by high-quality clothing and well-known brands in Poland. The in Europe leading chain KIK is spreading further in the neighboring country. By the end of 2017 the number of stores should increase to 200. Its first store in Poland KIK opened in March 2012.

E-commerce is likely to give further impetus to the German supply of clothing. The large online retailer Zalando is setting up its first logistics center in Poland in Gryfino in the area of the special economic zone Kostrzyn-Slubice (Küstrin-Frankfurt / O.) for an amount of EUR 150 million. According to the property developer Goodman, it will be the largest logistics area occupied by a single company in Poland. At the same time, it is one of the most extensive BTS (built-to-suit) projects in the country, in which an object is fully built according to the requirements of the future user. Its opening is scheduled for the second half of 2017. Zalando wants to supply from there Poland, the Nordic countries and a part of Germany.

Source: Central Statistical Office CIS

Sneakers remain the megatrend par excellence in spring / summer 2017. There is no boredom coming up yet. The new shoe collections present themselves varied and innovative: Safari and ethno themes are reinterpreted. Soft romantic and playful decorations set new accents. Newcomers with potential are Mules and Sabots.

While the consumer mood was positive in the first half of 2016 - the shoe retail sector unfortunately could barely benefit of it in many places. Sales in the first six months were two percent lower than last year. The weather conditions were anything but sales promotional: the last winter months were too mild, spring on the other hand was too cool. But this is just one of many causes for the sagging sales of shoe retailing. Deplored also is the loss of appeal of the inner cities and, related with this, the increasing trend of shoe purchasing in the Internet. For the stationary shoe trade this development represents a strong challenge which needs to be mastered. Hope puts the sector on the trend toward shortened trouser forms that lead more attention towards footwear. In the new season the shoe trade has to and wants to invest in target group-oriented shopping ambiance and in marketing methods to provide quality incentives. In many places the product mix has been send back to the testbed. Many traders therefore took advantage of the just ended GDS shoe fair in Dusseldorf in order to learn about the new trends for spring / summer 2017.

Sneakers continue their successful rise and belong to the generational and gender comprehensive trend shoes. The convenient slippers are now being used as footwear for the whole family, from the youngest to the elderly. This trend has often more to do with a sporty look than a sporty use, for many shoe wearer convenience has become a self-evidence. Clean and purist styled models standing next to styles of material mix: glitter, ornamental stones, mesh, metallics, reptile embossing, lasercut and neoprene come in use for the shoes. White soles are an important feature of the new sneaker.

Mules score in a new variety. In trend are toe gripers as well as mules in tube optics and wide (cross) bandages. For purchase incentives models with an anatomic formed footbed and soft uppers (like cork) should care.

Sabots, Mules and Babouch types are indispensable for the new season. The models are mostly flat and come along with slim borders. Very trendy are open toe shown mules with block heels.

Previously Espadrilles were worn only during the (beach) holiday, in the meantime these flat treads have blossomed into absolute trend-outfits. No wonder, because the new models are not only very comfortable, but super stylish also! Particularly noble shafts in a material mix like leather plus metallics come along. Trendy are also Espadrilles made out of linen, exotic printed, trimmed with stripes or sequins and pearls. Non-slipping rubber soles make the Mediterranean shoes now all-weather fit, regardless whether flat, with plateau or wedge.

Loafer with their androgynous variants like Brogue, Budapest and Monk remain important in the coming spring / summer season. It is important that the shoe is light. Filigree, unlined models made of soft suede compete with models with voluminous bottoms.

Sandals are an indispensable part of any summer collection. In addition to models with platform and wide drums are sportier variants. For innovations are sandals with block heels, T-clips and high-front cuts. Hardly to overlook are Lace-up Sandals, a mix of Roman-sandal and Ballerina.

The ethnic and safari trend remains unbroken in spring / summer. Shaft designs with colorful pompons, tassels, embroidery, pearls and braiding determine the optic. Thick, profiled soles ("Briquette plateau") or soles with "shark tooth" profiles have entered the mainstream. Ideal for women who like to “grow” a few centimeters without walking on high heels.

With the great demand for sneakers, the portion of high-tech materials is growing. Leather naturally will not be relinquished for shoes, especially not as soft nappa and suede. Very smooth and glossy surfaces are there among reptile embossing.

The color spectrum in the spring / summer 2017 is discreet. Monochrome color images produce a sustainably-quality look. From pearl gray to titanium ranges the gamut of grays. In addition there are clear, creamy tones with a touch of rosé, sandy shades and powdery-bright models.

Regardless whether as high heel or sneaker - metallic colors of "subtly iridescent" to "mega-glittery" light up many shoes. Silver, bronze and gold are not only trendy in fashion clothes, even the feet are decorated with it in the new season.

• INTERNATIONAL COMPETITION INCREASES
• COMPANIES HAVE TO MODERNIZE PRODUCTION AND INCREASE DEPTH OF PROCESSING

Dubai / Islamabad (GTAI) - Pakistan's textile and clothing industry has urgently to invest. The international competition has intensified. The companies need to modernize their technology and increase their processing depth. The country wants to get away from the production of simple fabrics and yarns. The GSP Plus agreement with the EU and an improvement in the security situation have improved the investment climate. In high-end machines Pakistan is dependent on imports. 

Pakistan's textile and clothing industry expects better sales opportunities abroad in the next few years, particularly with the European Union. Early 2014 Pakistan has received from the EU the GSP Plus status (Generalized System of Preferences) that allows the country to supply goods at a lower rate of duty or even with a completely duty exempt in the EU. Particularly the textile and clothing industry benefits from the agreement, as the sector provides almost 80% of Pakistan's exports to the EU. The government even hopes on additional exports for the sector worth USD 1 billion per year.

Following the latest available trade figures, Pakistan increased in 2014, the year in which the GSP Plus agreement came into force, its total exports of clothing by almost 10% to around USD 5 billion. Official figures of exports to the EU are not available. According to the foreign trade statistics, in any case exports to Germany have increased in clothing by 13% to almost USD 500 million, in textiles by 18% to USD 434 million and in footwear by 27% to USD 34 million.

Source: UN Comtrade

Demand for textile machinery rises
Market observers anticipate increased investments in machinery. A particular dynamic effort is expected in the demand for textile printing machines, dyeing machines, tenter frames and other finishing techniques. Positive for the investment climate will be the effect of the expected increase in textile exports to the EU and the improvement of the security situation. In recent years power shortages and a precarious security situation have inhibited the production and investment activity.

The market for textile machinery (SITC 724) grew significantly since 2014. In the country itself only relatively simple machines are being manufactured. High-end equipment is mostly imported. The import of textile machinery rose to USD 585 million in 2014, an increase of 17% compared to 2013.

*) SITC 724, including pieces
Source: UN Comtrade

*) SITC 724, including pieces

Investments urgently needed
Competition from PR China, Bangladesh, India and Sri Lanka has intensified. Pakistan's textile industry needs to modernize and upgrade, to increase its productivity and the added value. Pakistan covers the entire value chain from fiber preparation from to the end product. Despite this well-position predominantly simple products are being produced. Only an estimated 40 companies are vertically integrated and cover the entire textile processing.
With an annual harvest of about 13 million bales Pakistan is the world's fourth largest cotton producer. In addition about 600.000 tons of synthetic fibers are being manufactured in the country. According to reports there are 21 manufacturers of filament yarn with a capacity of 100.000 t; the production is supported by a PTA plant with a capacity of 500.000 t.

Sources: Pakistan Bureau of Statistics; TMA - Towel Manufacturers Association

Yarn production has lost competitiveness
According to sector experts In the past decade yarn manufacturers made no larger investments to upgrade their production, although money would have been available for such investments.  The reason for that should have been the heavy competition from China, India and Bangladesch.  Ten years ago Pakistan used to be one of the most efficient yarn manufacturers worldwide. Because modernization investments failed to materialize, this technique applies as outdated in Pakistan today.

The companies complain about high production costs and are demanding more favorable electricity tariffs and protectionist measures against import competition. A negative effect on the production and the investment climate in the country also have the electricity shortages and the tense security Situation.

The textile sector in Pakistan is characterized by numerous large textile companies with quite a large number of small businesses opposite which mostly belong to the so-called informal sector. The informal sector, for example, includes small family companies or small productions, which are not taxable. The informal sector produces mainly simple products for the domestic market. It works with discarded equipment of the larger companies, imported used machinery or cheap equipment from China. The official statistics do not take the informal sector into account.

• Import from Germany growing / Domestic Chains expanding

Warsaw (GTAI) - The outlook for sales of clothing and footwear in Poland is favorable. Domestic chains such as LPP, Bytom, Vistula and Monnari are opening additional stores. In 2016 the shoe chain CCC is investing around EUR 33 mio in new sales areas, including in Germany. The western neighboring country is by far the biggest buyer of clothing from Poland. Increasingly popular too is fashion from Germany, which occupies the third place among supplying countries.

In Poland the demand for clothing and footwear is steadily growing. The market research firm PMR (http://www.pmrpublications.com) expects in 2016 sales worth of Zloty 35.3 billion (approximately EUR 8.2 billion, 1 Euro = 4.3283 Zl, as of April 22nd  2016). The price war however is very tough due to the higher US dollar exchange rate, the dealers can hardly pass their higher costs on to the customers. This concerns mainly imported commodity goods from the Far East, while the outlook for the upscale segment outfitters is better.

1) Estimation, 2) Forecast
Source: market research company PMR

The company for classic clothing Bytom (http://www.bytom.com.pl, from the same city (Bytom – Beuthen)) that serves the upper segment, wants to create an offer for the masses. It lowered its prices in March 2016. In order to reach more customers, it plans to increase its sales area of from 10,300 square meters in spring 2016 to 15,000 square meters by the end of 2018. The number of its stores should simultaneously rise from 97 to 120.

Bythom will avoid quality losses through savings in the purchasing of clothing. According to Michal Wojcik, chairman of the company, negotiations with representatives of procurement markets are on the way. In 2019 the retail sales of Bytom should reach around 250 million PLN, double as much as in 2015 (123 million PLN). The company will serve the middle segment between large markets with  
mass-production goods and expensive boutiques with domestic and foreign luxury brands.

The two great rivals Bytom and Vistula (http://vistula.pl) from Krakow (Krakau) are receiving increasing competition by smaller companies. Vistula was able to win in 2016 the soccer star Robert Lewandowski for promotional activities, he will appear in suits of the company.

The stockbroker office of the Bank BZ WBK believes in good opportunities of the smaller chain Monnari  (http://www.emonnari.pl), which could double its sales area until 2019. With the proliferation of the growing clothing and footwear chains a consolidation of the retail structure goes along, and the total numbers of stores will overall decrease.

The chains Vistula, Bytom and Monnari are expanding domestically only, where they expand their retail spaces annually by 10 to 25%. Since only one third of the by Vistula and Bytom sold collections are being settled on a USD basis, they are not hurt as much by the strong upvaluation of the US currency as LPP, the manufacturer of mass-products. This company buys almost its entire collection in the  
Far East in US currency. In the case of the footwear chain CCC, the proportion is 40 to 50%.

Source: Bisnode

CCC strives towards west

The retail chain CCC (http://ccc.eu), which is also represented abroad including in Germany and Austria, has acquired for more than ZL 200 million the online shop for shoes eobuwie.pl (http://www.eobuwie.pl). By 2016 a further strong expansion is planned, for which it wants to raise about PLN 140 million. The sales area should become 27% net bigger with at least 100,000 square meters. This was announced by the deputy chairman of CCC, Mr. Piotr Nowjalis.

The majority of the new area (77,000 square meters) is planned abroad, where 110 stores should be opened. In the focus here are Germany, Austria and Romania. Domestically CCC is planning a new sales area of 23000 square meters for 40 stores. These plans represent an acceleration compared to 2015, when the total sales area had increased by 66,000 square meters net (+ 22%). At the end of 2015 there were at home and abroad 773 CCC stores with a total of 372,000 square meters. 

*) Forecast of the press agency Bloomberg, February 2016
Source: Newspaper Rzeczpospolita

According to a forecast of Bloomberg, the most important apparel and footwear companies will improve their results in 2016. Leader LPP supplies with its brands Reserved, Mohito, Cropp, House and Sinsay a wide audience. To the upscale segment belongs the new brand Tallinder, which is being offered since February 2016 in a first store in Gdansk (Danzig). Beginning in 2019 there should be 30 sales stores for the brand Tallinder, which then will compete with Vistula, Bytom and Prochnik.   

Source: Newspaper Rzeczpospolita

In 2016 LPP wants to increase its retail space at home and abroad by 11 to 13%, that is about 90,000 square meters. End of the year thus 1,716 shops could belong to the company. To date, 23% of the sales area of LPP is in the Russian Federation and Ukraine. The profits there were again impacted by the devaluation of the local currencies against the Zloty.

Foreign trade increases

The Polish imports of clothing exceed the exports. Especially Asian countries could increase their deliveries in 2014, but also Germany belongs to the leading suppliers and attained growth. Among the importing countries Germany plays by far the most important role. The followers are the Netherlands, Czech Republic, Austria, Sweden and other, mostly European countries.

Source: Central Statistical Office GUS

Although Poland supplies clothing to Germany at a large extent, it is not easy for the companies to settle in the western neighboring country with own shops and their own brands. LPP opened its first store in Germany in September 2014, in spring of 2016 there were already twelve. In three years there should be 30 stores. In 2015 the German LPP stores generated approximately 94 million PLN, but probably without profit because of investment costs and advertising.

Source: Central Statistical Office GUS

In 2015 Polish exports of apparel, accessories and other textile products and footwear continued to rise.

Source: Central Statistical Office GUS

• Vietnam is largest beneficiary
• Relocation closer to sales markets

Hong Kong (gtai) - For global consumer product manufacturers, Asia has developed an important role as a procurement region. Large parts of production have been displaced in recent decades into the region and here traditionally mainly to China. The rising costs in China however lead to a strategy adjustment. Thus the production moved on to cheaper locations and a shift back closer to the end customer began. Free trade arrangements support this trend.

Labor costs in China will not move down again. Even when the economic growth increasingly weakens, China's coastal regions are already often too expensive for wage-intensive productions. The world's largest location of the manufacturing sector will anyway leave its dependence of exports and will generate more growth through domestic consumption. The remaining companies are therefore increasingly focused on Chinese customers. Has the textile industry heard the signals already several years ago and shifted away, now the electronics companies have started to search.

But – the relocation of production is not so easy, the experts agreed upon at the discussion panel Shifting Supply Chains in Asia on the Asian Financial Forum (AFF) in Hong Kong. Because no country, except India, offers such a workforce. But neither the infrastructure and the investment climate can match, nor the country has any interest in low-production stages. Furthermore China has set up a supply industry without any comparison.

Relocation trends slow down

Even Bangladesh, established for a long time as a cheap location for clothes, is losing its attractiveness - experts say. Besides fundamentally difficult production conditions especially scandals like collapsing factories are responsible. No western clothing manufacturer likes to be associated with that repute today. While Indonesia was generally judged for being rather little investment friendly, the Philippines would provide a better reputation than years ago. So in addition to numerous Japanese producers also German companies have moved from southern China to the special areas of the Philippines.

Due to wage cost increases by an average of 15% per year, China with it’s the low-wage area has catapulted itself in a large extent out of the market. In times of rising productivity this was compensated for a while but at last the model came to its limits. The empire of the middle will therefore make the leap to a consumptionbased growth based on production of high-tech and on the provision of services. It is still
unclear whether this leap across the "middleincome trap" will succeed. Many emerging countries are caught in this trap, and the growth is flagging.

German buyers order less in China

Accordingly German retailers are increasingly reducing their imports from China and buy more and more in other countries. This is the result of a member survey of the Foreign Trade Association of German Retailers (AVE), at which for the most part textile and shoe retailers participated. 80% of the respondents have already reduced their import volume from China in 2015, 90% of the companies said they are
planning to source from other supply regions. The merchants are seeing a shift to countries like Myanmar (78%), Bangladesh (67%) and Vietnam (56%).

Vietnam, which already benefited in recent years from the relocation, was still recommended on the AFF as a top location. The country with the highest economic growth in Southeast Asia in 2015 would have risen in the 1st half of 2015 to the fourth-largest exporter of textiles, the Vietnam National Textile and Garment Group (Vinatex) analyzed. For shoes it is already the third largest supplier worldwide. Based on mega investments from Samsung, now the electronics industry came out of the starting blocks and should attract more activities. Experts cite especially the mixture of young, growing populations with low labor costs as an important locational advantage.

Vietnam benefits from Free Trade Agreements (FTA)

A thrust Vietnam's attractiveness currently receives through free trade agreements which are in a final stage. So a free trade agreement with the European Union was signed in December 2015 which was followed early February 2016 by the Trans Pacific Partnership (TPP). The latter agreement, which includes next to ten other Pacific neighbors the United States, should bring a large benefit for Vietnam. For the Vietnamese consumer goods manufacturers the US is the most important market, the large retailers in the United States can move their procurements very fast.

As an underdeveloped member Vietnam is likely to get larger portions of the value chain in the textile and electronics area at the ratification (and even before). The country is still missing a developed supplier structure. This is just happening to be built in the textile sector, there are investments in capacity for yarns, fabrics and dyeing going on. For Samsung, the largest foreign investor, all components are still coming
from China. And only when a large proportion of the added value comes from TPP member states, the low duty will become applicable.

While the purchasing power is not quite so big in Europe, costs play an important role also there. But next to it the control of the supply chain and the flexibility has developed a greater role, rapid changes of trends and collections are determined by customers and the Internet. Therefore also here a shift back, closer to the markets, has begun. Romania and Bulgaria have established themselves in the middle of
Europe as a "low-wage locations". But even there the population is characterized by aging. Accordingly labor forces will become scare and wages will rise. Ukraine is traded as a new location.

Africa still with small potential

Little potential the experts from the Supply Chain Panels evidence the location of sub-Saharan Africa. This was tested by some buyers or producers, but the results would not be convincing. The views however diverge. Some Chinese companies are already partly on site and American manufacturers are monitoring the further development. So, for example, the VF Corporation, the largest denim retailer in the world, is buying in Africa. Only Ethiopia would have potential - according to a representative. But the infrastructure, investment climate and working morale could not be comparable.

So - basically serious alternatives to the established locations are lacking. Therefore, due to the scarcity of labor, costs and thus the final prices will rise. Even in Vietnam the minimum wage increased by 15% in 2015. But when it will be hardly possible to turn at the purchase screw, the companies need to position themselves better in marketing and sales, so a large clothing buyer. Therefore social media must be used in order to come closer to the customer and, for example, to develop individualization as a selling point.

Source: McKinsey survey of chief purchasing managers

• Volumes considerably upgradeable
• Italy loses Top Position to North Korea

Beijing (gtai) - Chinese consumers appreciate German goods from cars to saucepan. Fashion "Made in Germany" is only now discovered. German providers benefit from the good image of their country of origin - and from the desire of the growing middle class to afford something "good". Local production usually has a rather bad reputation. However there is a lack of presence, German brand names are hardly known. Despite the high growth rates the sales potential is by far not yet exhausted.

German Fashion in the PRC is coming: according to Chinese custom statistics in the first ten months of 2015  Chinese purchases from Germany of knitted and crocheted clothing and garments (HS-Pos. 61) rose by a whopping 31.8% and by 5.1 % in other apparel and clothing accessories (HS-Pos. 62). This is all the more remarkable because the total imports for clothes grew in the same period by 3.6% only, - and China across all sectors even recorded a stately import reduction by 15.7%.

But a sales volume of USD 5.6 million USD of a total import of products of these HS headings of USD 4.9 billion is rather negligible. In fact, German fashion brands, with a few exceptions such as Hugo Boss and Escada, are yet barely visible in the PRC. A really good positioning was reached by Adidas only.

Luxury purchases are shifted abroad

The Shanghai Daily wrote in October 2015, Chinese luxury purchases have been shifted to abroad at two-thirds since 2012. In Paris, Milan, London, New York or Tokyo one can buy anonymously and also cheaper than on the mainland. In addition, there is a trend away from the "quasi everywhere" available "big names" to new, less known, more individual designers.

At least there seems to be a still unabated propensity abroad: For example, the Financial Services Global Blue reported an increase in tax refunds of Chinese tourists in August 2015 of 65.6% (July: + 73%) compared to the same month of the previous year.

Detached from the top position was Italy in October from Korea (Dem. P.R.) with USD 663.9 million. On the third and fourth place follow Vietnam (USD 587.5 million) and Bangladesh (USD 364.7 million). The success of these three countries is probably due to an already shifted production capacity of Chinese manufacturers, which bring their products back to China to sell them there.

Source: China Customs

As in many other areas of consumer goods in the “Dress-Question” Germany does not utilize its opportunities on the Chinese market. According to sector insiders “here could happen much more" - not least because of the excellent reputation that the label "Made in Germany" enjoys among Chinese consumers.

"Light Luxury" demanded

The "big" Italian or French brands such as Gucci, Armani or Chanel remain inaccessible for the most. Fashion "Made in Germany" can cover a niche in the medium price range that is affordable for the growing urban middle class, that also would like to buy "something international" and has come to appreciate German products from automobiles to saucepan. For them German fashion is not for luxury, but for good execution respectively processing and good material. At the same time other competitors are active in this field. In a similar notch for example, the Dutch men’s wear supplier Suitsupply abuts, which opened in Shanghai in the summer. 

Fake products are not an alternative for this clientele. In fact, the Chinese consumer does not make its decision for a German product due to the low price, but rather by the desire to acquire a piece of excellent quality. This then may cost something and stands out from the mainstream, whether through innovative materials, unusual combinations of materials, individual or humorous cuts or by a special design. Increasingly demanded are accessories such as matching belts, bags or shoes. As a micro-trend in the younger generation applies also wearing hats - and who wants to leave is going to the popular Octoberfest in a real Dirndl.

Sales price at least three times the purchase price

German manufacturers take advantage from the "demographic factor": the Chinese society is aging rapidly. Accordingly the demand is shifting away from "more funky and young" goods towards timeless, trendy-fashionable, quality orientated clothing, which then may be slightly more expensive - and it de facto also is. Experiential German import goods become more expensive due to transportation, customs and usual trading margin up to at least three times the buying price.

However, as successful niche products yes, - for the masses German goods therefore are not suitable. This may apply to lovingly designed eco-slippers as well as for trendy hats or quality handbags in a "Light-luxury segment". Not seldom the one or the other gap in the market can only be detected by local presence - so for example - each country has its own "house shoe culture", with which one must learn to deal with as a provider.

According to the experience of many exhibitors, sometimes Chinese buyers like with high standards masterfully crafted products even more than the Germans themselves. Moreover it is advantageous, to be able to offer customers next to the actual product, "a story". So it absolutely impresses, when a company is family-run by the fourth generation - or high craftsmanship can be documented with a film.