A trade showcase aimed at promoting Australian fashion to Chinese buyers resulted in more smoke and mirrors than sales, Assia Benmedjdoub discovers.
Australian fashion designers held their collective breath earlier this year, when tariffs on clothing and finished textiles dropped from 17.5 per cent to 10 per cent in January.
Already, a majority of clothing sold in this country is sourced from China: would this generous tax break prompt more buyers to ditch locally made garments in favour of increasingly cheaper imports?
According to business information firm IBISWorld, the level of clothing imports grew by a dramatic 11.8 per cent in 2004/05, when tariffs were reduced by 7.5 per cent.
It is still too early to quantify the latest tariff reshuffle, but there was a reversal in roles when Australia became the sole co-host country for the 2010 China International Small and Medium Enterprises Fair (CISMEF) last month. As the largest trade showcase of its kind in China, the event was pitched as a unique opportunity for Australians to drive their own exports to the lucrative market.
The partnership saw a 10,000sqm Australian Pavilion erected at the fair grounds in Guangzhou, with nine designer collections forming the fashion component. Teams from Aurelio Costarella, Yeojin Bae, Nevenka and Limedrop were on ground while Aplha60, Dhini, Arabella Ramsay, Joveeba and Nicola Finetti had external representation.
Each designer contacted by Ragtrader confirmed a majority of their costs had been subsidised by various government bodies or sponsors, with Austrade and L’Oreal Melbourne Fashion Festival handling the logistical component. But even before the fair kicked off, they had quite some ground to cover.
“The majority of clothing sold in Australia is sourced from China while in contrast, China is the 18th largest export market for Australian clothing manufacturers,” IBISWorld industry analyst Cathy Hewish says. “It accounts for less than one per cent of total clothing exports, and this has been consistent over the last three years to 2009/10. Exports are constrained by the relatively small and declining size of the industry, and the high value of the Australian dollar.”
There is also the country’s insatiable appetite for higher priced, luxury fashion labels from Europe and the US. This is something high-end couture label Aurelio Costarella discovered when attempting to break the market this year – finding affluent players holding strong with their selection of power brands such as Gucci and Louis Vuitton. The brand was among the Australian contingent in Guangzhou and is reportedly looking to license a bridal collection in China.
“We were already familiar with the specifics of dealing with the market well before heading over for CISMEF,” founder Ray Costarella says, adding a selection of his spring/summer 2010 range was showcased at the fair.
“The event was not about generating sales. It was more about brand exposure, media and establishing industry contacts in Guangzhou. To this end, I feel that the trip was a successful one for me.”
It was much the same for other designers at the fair, who described it in varying degrees as a marketing, research or PR exercise. Upmarket designer Dhini Pararajasingham was represented externally at the event by LMFF, and also did not confirm any new commercial opportunities. “It was more a ‘researching the market’ sort of venture than getting stockists or sales,” she says.
Limedrop co-founder Nathan Price said the brand, which showcased its spring/summer 2010/11 collection at CISMEF and separately in Japan, is undertaking talks with sales agents in both markets. He confirms that while no immediate business opportunities were secured at the fair, daily fashion parades and a dedicated Australian fashion forum meant more exposure for the brand.
“The daily parades using Chinese models gave attendees a great idea of how Australian fashion can fit into the Chinese aesthetic,” he says. “In addition to the parades all the designers that attended participated in a designers forum that allowed us to establish contacts directly with industry.”
According to LMFF communications executive Haley Berryman, designers were introduced to a number of influential delegates while at the event. However, many of these appear to be suppliers rather than buyers or investors.
These include Miyako, a clothing manufacturer and retailer with a store in Sydney; manufacturers C & B Dragon Textiles, Oz Designs and Betsy Clothing Factory; logistics provider Grand Dragon Group; button and embellishment specialist Zheyou Craftwork Company; and industry group Guangdong Fashion Designers Association.
“It was definitely something new for us and the aim of the activity was very much exploratory,” Berryman says. “Looking more at introducing Australian fashion and design talent to this potential audience rather than as an industry opportunity that would result in immediate sales and business relationships.”