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TDC report provides tips to succeed in Mainland's leather consumer goods market

Hong Kong companies have been given some helpful tips on how to sell their leather consumer goods more effectively on the Chinese mainland.

A study carried out by the Trade Development Council (TDC) has found that department stores there are the best places in which to sell leather consumer goods, followed by outlets in shopping malls and chain stores.

The survey, conducted in four major cities - Beijing, Chengdu, Guangzhou and Shanghai in February -- focused mainly on leather products. It showed that Hong Kong's leather goods were sought-after because of their quality, variety, design and good looks.

TDC's Assistant Chief Economist Dickson Ho said: "Hong Kong companies should never compromise on quality. Instead, they should allocate more resources to product design, selection of material and craftsmanship."

The study also found that Hong Kong's leather products were particularly competitive in the high-end and middle-range markets.

The survey is composed of two interlocking parts. The first part is about shoppers. The second is about retailers.

The main findings were:

Hong Kong's competitiveness

  • Most retailers on the mainland consider Hong Kong brands to be either very competitive, or "quite" competitive in both the high-end and mid-range segments, but less competitive in the low-end segment.

  • The competitiveness of Hong Kong brands mainly rests on their style and design and quality, with most respondents picking those as the major reasons behind the attractiveness of Hong Kong's leather goods.
Marketing channels
  • Holding product promotions in shopping malls and department stores are the most popular promotional and sales activities, followed by discount and price cuts, TV commercials, discount coupons, promotional stands, exhibitions and buy-one (or more) get-one-free offers.

Shopping times

  • Thirty-eight per-cent of respondents visited leather goods shops at least once a month;

  • Shopping during weekends is common. Other popular shopping dates include National Day (October 1), Chinese New Year (January/February), New Year's Day (January) and Labour Day (May 1).

Purchasing power

  • The average monthly income of respondents was RMB 2,587. A comparison of monthly incomes in different cities showed that respondents in Shanghai and Guangzhou had higher income levels, with average monthly income reaching RMB 3,091 and RMB 2,801. Respondents in Beijing and Chengdu had average monthly incomes of RMB 2,653 and RMB 1,836 respectively.

  • On average, respondents owned 4.2 pairs of shoes, 1.2 wallets, 1.3 belts and 1.3 handbags or briefcases.

Big spenders

  • Male professionals, managers and executives had the biggest spending power. Other big spenders include male office workers, sole proprietors/business owners, female office workers and female professionals, managers and executives.

Selection criteria

  • When choosing leather products, quality stood out as the chief consideration for respondents, followed by product material, craftsmanship, style/design, price and brand. Brands were considered important by most respondents.

Product trends

  • Bovine skin was by far the most preferred leather material, followed by goat, kid, sheep and crocodile skin;

  • Respondents overwhelmingly preferred the colour black and, to a lesser extent, dark brown. For handbags/briefcases, popular colours included light brown, white and red.

The survey showed that people on the mainland were becoming increasingly brand conscious, and pointed out that it was vital for Hong Kong companies to promote their own brands with a distinct image.

"Hong Kong companies should pay special attention to how they decorate their stores and display their goods. This should be done to create a strong 'first' impression. "

"Seasonal promotion campaigns, such as special discounts and advertisements could be employed, and new lines of collections should be introduced for festivals."

Dickson Ho said: "The spending power of mainland consumers has been growing steadily and the middle-class, in particular, is prepared to spend more freely nowadays on items such as shoes, handbags, briefcases and other leather products."

"Greater attention should be paid to this development when setting prices for mainland consumers as salaries differ from city to city. "

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For press enquiries, please contact TDC's Corporate Communication and Marketing Department at 2584 4333.

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Content provided by Hong Kong Trade Development Council