25 Oct 2017
Cautiously Optimistic: The 2018 Outlook for the Clothing and Fashion Market
CENTRESTAGE 2017 Survey
Now in its second year, CENTRESTAGE is a fashion brand-promotion, launch platform and trade exhibition organised by the Hong Kong Trade Development Council (HKTDC). This year, during the course of the event, HKTDC conducted face-to-face interviews with 202 buyers and 71 exhibitors  in order to gain an overview of the current market prospects, new product trends and the latest e-tailing developments.
Overall, the results indicated that many in the industry are cautiously optimistic with regard to their likely sales performance over the next 12 months. Exhibitors, however, tended to be far more upbeat than their counterparts on the buying side. Greater unity, though, was clearly on show when it came to evaluating product trends, with the majority of buyers and exhibitors agreeing that womenswear will remain the most popular category well into 2018.
2018: A Cautiously Optimistic Outlook
In general, buyers and exhibitors were both cautiously optimistic with regard to 2018 sales prospects. In total, 58% of buyers and 82% of exhibitors expected sales to remain steady or to decrease next year, while more than two-fifths of buyers believed their revenue would increase in line with higher retail and sourcing prices.
Amongst the buyers, 58% expected that the retail price of their products would remain unchanged in 2018, while 39% expected an increase in the retail price. By contrast, only 3% of buyers expected the retail price of their products to actually decrease.
In terms of the FOB selling price of their products, 70% of all exhibitors expected this to remain unchanged in 2018, while 17% expected an increase. A comparatively small number of exhibitors (13%) expected a decrease in the overall FOB selling price.
There was a greater difference of opinions, however, with regard to sourcing prices and production costs. In all, 55% of buyers anticipated an increase, while 44% expected sourcing prices to remain unchanged. Only 1%, however, predicted any decrease. Among exhibitors, only 21% anticipated a rise in production costs, while 79% believed their production costs would either remain unchanged or fall.
In terms of markets, nearly 90% of respondents saw Hong Kong as having the greatest 2018 growth potential among their traditional markets, followed by South Korea and then Taiwan. In all, 75% of buyers and exhibitors believed that Mainland China would be the fashion industry’s most promising emerging market in 2018, followed by Eastern Europe (excluding Russia) (43%) and then the ASEAN countries (43%).
Womenswear Remains Most Popular Category
When it came to identifying the most popular category in the sector, womenswear attracted the highest level of endorsement from both buyers and exhibitors (70%), with casual wear coming in second (18%). This marks the second time that womenswear has been designated as the most popular category in the annual CENTRESTAGE survey.
Optimal Product Development Strategies
In terms of optimal product development strategies, 47% buyers and exhibitors backed ‘limited edition collections’ as the most significant route for product development over the coming year. This was followed by ‘brand-licensing products’ (44%) and ‘crossover/joint promotions’ (37%).
Among buyers, the next most important strategies were ‘going smart – interactable with smart devices or wearable technologies’ (31%) and ‘celebrity or key opinion leader-endorsed fashion collections’ (30%).
Many of the exhibitors, however, had a somewhat different view. Overall, ‘going smart – interactable with smart devices or wearable technologies’ (21%) and ‘collections made from new materials’ (21%) were seen as their next most favoured strategies for 2018.
E-tailing: A Key Sourcing Platform
Over recent years, online trading has become an increasingly a popular sales channel for the fashion industry. On average, e-tailing now accounts for one-fifth of the total sales revenue of fashion companies with an e-commerce presence. According to this year’s survey results, more than 70% of buyers and exhibitors use e-tailing as a direct sales channel, a rise from the previous year when only just above 50% respondents indicated they were engaged in online selling.
Of those companies currently not engaged in e-tailing, 19% indicated that plans were in place to start selling online within two years. Of those companies currently engaged in e-tailing or planning to be, 78% see the channel as suitable for selling womenswear, followed by casual wear (38%), menswear (26%) and fashion jewellery (15%).
Of those companies currently engaged in e-tailing, some 58% source from Mainland China, followed by Hong Kong (43%), South Korea (31%), Japan (15%) and the ASEAN countries (14%).
Profile of Respondents
202 buyers: 50% were based in Hong Kong, 14% from the Chinese mainland and 50% from other regions
71 exhibitors: 37% from Hong Kong, 11% from the Chinese mainland and 63% from other regions
 CENTRESTAGE 2017 was held from 6-9 September.