Increased labour costs have made the apparel industry lose some of its competitive advantage and have driven many manufacturers to move their operations overseas to China and ASEAN countries. Imported raw materials and imported clothing and accessories gradually share an increasing market while fashion consumption remains stable with an increase in demand for quality.
The developing market can be seen in that many brand name products such as Burberrys and Dunhill are opening flagship stores. Not only high-end products are in the market, others such as French Connection, Oasis, Scottish House, Top Shop and Miss Selfridge have also opened stores islandwide to share the market. News trends on fashion shows in Paris, Milan, London, and New York are widely spread on wireless and cable TV, newspaper and fashion magazines.
Hitherto fashion retailing has followed the Japanese model being largely focussed on department stores that rent out the bulk of the floor space to concessions. With an increased number of shopping centres opening, and a growing number of department stores, the retail industry is developing fast to provide even more opportunities for prospective retailers. A couple of UK retailers have been targeted to be the anchor tenants in newly developed shopping malls. 10 new developments are expected to open in the next 2 years
The Taiwan economy was in recession in 2001/2002, but consumer spending was not affected. The SARS outbreak had an adverse effect on consumer spending. However, of position is expected.
The size of the international textile show Taiwan International Textile & Apparel Show (TITAS) held every September has been expanded. It has changed from export-orientation to being a bridge for both imports & exports since the late 1990's. The numbers of foreign exhibitors and seminars have increased. We expect Taiwan to be a competitive market for fashion retailing.
Characteristics of Market
Taiwan's textile and apparel industry is well developed, representing 10% of the nation's total exports, worth over USD10,000 million, and 2.5% of the total imports, worth over USD2,000 million. The domestic fashion market is facing increasing competition from imported products. Imported items shared over 20% in 2002.
The market basically covers brand name (high-end) fashion, such as Burberrys, Giorgio Armani, Gucci, Dunhill, LV, Pringles etc.; young fashion, such as French Connection, Beneton, Nautica, Top Shop etc.; and street wear products, such as Hang Tang, Giordano, U2 etc.
The main competitors come from Italy, France, Germany, Japan and the US and are competing in the mid to high-end fashion, while some others from HongKong, Malaysia, Indonesia and Vietnam etc. are popular at mid-low prices.
There are currently restrictions on the import of certain garments manufactured in Mainland China and these have deterred some UK retailers. Following Taiwan’s accession to WTO, some of these restrictions have to be lifted, such as leather products are allowed in.
Increasing numbers of Taiwanese companies are operating licenses to produce European clothes locally. They can sell the garments in Taiwan, as an imported brand, or even re-export. The latter trend is developing rapidly.
Some of the British brands of clothing are represented in Taiwan through branch offices of Japanese or Hong Kong agents. Some brands are already merged with Japanese companies, but still maintain the image of British style, and have fared better in Asia than in the UK. These types of companies are usually not interested in being representatives for more British clothes.
A seemingly winning marketing strategy is to develop a strong branding and open stores aggressively. Store openings with fashion shows and a period of promotions appear too be the best way to effect a market entry.
Taiwan Textile Federation (TTF) and China Textile Institute (CTI) can also do product promotions by holding seminars or a specific exhibition if requested. TTF focuses more on the product marketing side. CTI focuses on the technical side, e.g. particular functions of a product.
