HK Watch & Clock Fair 2010 On-site Survey

HK Watch & Clock Fair 2010On-site Survey

HK Watch & Clock Fair 2010On-site Survey

Christine KwokChristine Kwok

Managing ConsultantManaging Consultant

Actrium Solutions Actrium Solutions

10 Sept10 Sept 20102010

2

Methodology

Date of Fieldwork : September 6 - 8, 2010

(*Day 1 to Day 3)

Target Groups : 405 exhibitors; 700

buyers

Method : Face-to-face interview at

the Exhibition Venue

3

Key Findings Exhibitors

Key Findings Exhibitors

Key Findings Exhibitors

Key Findings Exhibitors

4

Respondents’ Profile

Country/ Region

Others,8%

ChineseMainland,

17%

HongKong,75%

Base: All Respondents (N=405)

5

Major Business

Others, 7%

Tools &Machinery,

1%

Packaging,7%

Parts, 10%

CompleteClock, 13%

CompleteWatch, 62%

Base: All Respondents (N=405)

Respondents’ Profile

6

Exhibitors’ Major Export Markets

Major Export Markets (Top 10)

9%

12%

13%

14%

17%

17%

24%

36%

13%

12%

0% 20% 40%

Switzerland

United Arab Emirates

France

Chinese mainland

United Kingdom

Hong Kong

Italy

Japan

Germany

United States

Base: All Respondents (N=405)

7

Exhibitors’ Core Businesses

Core Businesses

1%

2%

5%

8%

13%

42%

78%

3%

5%

0% 20% 40% 60% 80%

Others

Distributor

Retailer

Importer

Designer

Brand Owner

Wholesaler

Exporter/ Re-exporter

Manufacturer

Base: All Respondents (N=405)

8

Exhibitors’ Outlook for 2011 Is Positive

Market Outlook for 2011

7%

17%

1%

32%

41%

0% 10% 20% 30% 40% 50%

Much worse

Worse

Same

Better

Much better

Base: All Respondents (N=405)

9

Biggest Growth Regions Are Chinese Mainland, US & India

Biggest Growth Regions for Watch and ClockProducts in 2011

5%

6%

11%

14%

16%

18%

21%

50%

10%

9%

0% 10% 20% 30% 40% 50%

Central & South America

Other Asian countries

Japan

Middle East

South East Asia

Russia, Central & Eastern Europe

Western Europe

India

US

Chinese mainland

Base: All Respondents (N=405)

10

Over 60% of Exhibitors Are Currently Selling/Planning to Sell to Chinese Mainland

Business Activities in Chinese Mainland

Currentlyselling toChinese

mainland,39%

Planning tosell to theChinese

mainland,22%

Currently notselling and not

planning tosell to theChinese

mainland,39%

Base: Valid Respondents (N=401)

Business Activities in Chinese Mainland

Currentlyselling toChinese

mainland,39%

Planning tosell to theChinese

mainland,22%

Currently notselling and not

planning tosell to theChinese

mainland,39%

Base: Valid Respondents (N=401)

11

Nearly 40% of Exhibitors Selling to Chinese Mainland Have Appointed Sales Agents

Appointment of Sales Agent inChinese Mainland

No, 61%

Yes, 39%

Base: Valid Respondents (N=155)

Appointment of Sales Agent inChinese Mainland

No, 61%

Yes, 39%

Base: Valid Respondents (N=155)

12

66% of Exhibitors Selling to Chinese Mainland Anticipate Larger Sales Volume

Expected Change in Sales Volume to ChineseMainland (2010 vs 2011)

Same, 30%

Smaller, 4%

Larger, 66%

Base: Valid Respondents (N=155)

Expected Change in Sales Volume to ChineseMainland (2010 vs 2011)

Same, 30%

Smaller, 4%

Larger, 66%

Base: Valid Respondents (N=155)

13

Strategies to Develop Chinese Mainland Market

11%

14%

29%

21%

20%

0% 10% 20% 30%

Expand business in Chinese mainland through licensing

Source more watches made in HK for Chinese mainland market

Set up retailing/ wholesaling network in Chinese mainland

Increase investment on developing own brand

Expand existing retailing/ wholesaling network in Chinese mainland

Base: Valid Respondents (N=229)

14

Strategies to Cope with Rising Costs

3%

2%

17%

47%

7%

6%

0% 20% 40%

Others

5. Relocate company's manufacturing plant to outside Chinese mainland & HK

4. Relocate company's manufacturing plant to other adjacent provinces in Chinese mainland

3. Relocate company's manufacturing plant to outside Pearl River Delta (but still in Guangdong)

2. Broaden supplier base for raw materials

1. Increase product price

Base: Valid Respondents (N=229)

15

Over 80% of Exhibitors Use HK Trade Fairs to Find New Buyers

Channels Used to Find New Buyers

3%

10%

14%

16%

19%

27%

83%

14%

13%

0% 20% 40% 60% 80%

Others

Referred by tradepartners

Unsolicited calls/ visitsby buyers

Chinese mainland tradefairs

Trade publications

Unsolicited calls/ visitsto buyers

Other trade fairs outsideHK & Chinese mainland

Internet

HK trade fairs

Base: Valid Respondents (N=401)

Channels Used to Find New Buyers

3%

10%

14%

16%

19%

27%

83%

14%

13%

0% 20% 40% 60% 80%

Others

Referred by tradepartners

Unsolicited calls/ visitsby buyers

Chinese mainland tradefairs

Trade publications

Unsolicited calls/ visitsto buyers

Other trade fairs outsideHK & Chinese mainland

Internet

HK trade fairs

Base: Valid Respondents (N=401)

16

Nearly 80% of Exhibitors Use Trade Fairsto Launch New Products

Channels Used to Launch New Products

7%

3%

39%

78%

6%

21%

0% 20% 40% 60% 80%

Others

TV advertisements

Pressconferences/ releases

Trade/ Consumermagazines

Internet

Trade fairs

Base: Valid Respondents (N=399)

17

Over 80% of Exhibitors Have Received/ Are Negotiating Orders at the Fair

Orders Received at the Fair

Yes, 34%

UnderNegotiation,

48%

No, 18%

Orders Received at the Fair

Yes, 34%

UnderNegotiation,

48%

No, 18%

Base: Valid Respondents (N=400)

18

Key Findings Exhibitors

Key Findings Exhibitors

Key Findings Buyers

Key Findings Buyers

19

Respondents’ Profile

Country/ Region

HongKong,51%

ChineseMainland,

17%

Others,32%

Base: All Respondents (N=700)

20

Major Markets Served by Buyers

Major Selling Markets (Top 10)

6%

7%

10%

10%

11%

17%

22%

23%

9%

8%

0% 10% 20% 30%

India

Switzerland

United Kingdom

France

Italy

Japan

Germany

Hong Kong

United States

Chinese mainland

Base: Valid Respondents (N=700)

Major Selling Markets (Top 10)

6%

7%

10%

10%

11%

17%

22%

23%

9%

8%

0% 10% 20% 30%

India

Switzerland

United Kingdom

France

Italy

Japan

Germany

Hong Kong

United States

Chinese mainland

Base: Valid Respondents (N=700)

21

Buyers’ Core Businesses

Core Businesses

2%

5%

9%

9%

24%

25%

28%

7%

6%

0% 10% 20% 30%

Others

Independent Retailer

Chain/ Departmentstore

Buying Co-operative

Commission Agent

Importer

Wholesaler/ Distributor

Manufacturer

Exporter/ Re-exporter

Base: All Respondents (N=700)

Core Businesses

2%

5%

9%

9%

24%

25%

28%

7%

6%

0% 10% 20% 30%

Others

Independent Retailer

Chain/ Departmentstore

Buying Co-operative

Commission Agent

Importer

Wholesaler/ Distributor

Manufacturer

Exporter/ Re-exporter

Base: All Respondents (N=700)

22

Over 70% of Buyers Mainly Source/Trade Complete Products

Main Sourcing / Trading Item

CompleteClock, 15%

CompleteWatch, 58%

Parts, 21%

Packaging,3%

Tools &Machinery,

2%

Others, 1%

Base: All Respondents (N=700)

Main Sourcing / Trading Item

CompleteClock, 15%

CompleteWatch, 58%

Parts, 21%

Packaging,3%

Tools &Machinery,

2%

Others, 1%

Base: All Respondents (N=700)

23

Over 60% of Buyers Source for Items Above US$15 (FOB)

Price Range (FOB) of Main Sourcing Item

USD 5 or below,11%

USD 6-15, 25%

USD 16-50,34%

USD 51-100,14%

USD 101-200,10%

Above USD 200,6%

Base: Valid Respondents (N=698)

24

Buyers’ Major Sales Channels AreWatch Specialty Outlets/ Wholesalers

Major Sales Channels

8%

18%

18%

5%

10%

11%

0% 5% 10% 15% 20%

Internet

General stores

Commission agents

Brand owners

Wholesalers

Watch specialty outlets

Base: Valid Respondents (N=699)

25

Buyers’ Market Outlook for 2011 Is Positive

Market Outlook for 2011

7%

11%

1%

29%

52%

0% 10% 20% 30% 40% 50%

Much worse

Worse

Same

Better

Much better

Base: All Respondents (N=700)

Market Outlook for 2011

7%

11%

1%

29%

52%

0% 10% 20% 30% 40% 50%

Much worse

Worse

Same

Better

Much better

Base: All Respondents (N=700)

26

Biggest Growth Regions Are

Chinese Mainland, South East Asia & India

Biggest Growth Regions for Watch and ClockProducts in 2011

4%

8%

11%

12%

13%

15%

62%

1%

4%

5%

0% 10% 20% 30% 40% 50% 60%

Middle East

South Korea

Other Asian countries

Russia, Central & Eastern Europe

Japan

US

Western Europe

India

South East Asia

Chinese mainland

Biggest Growth Regions for Watch and ClockProducts in 2011

4%

8%

11%

12%

13%

15%

62%

1%

4%

5%

0% 10% 20% 30% 40% 50% 60%

Middle East

South Korea

Other Asian countries

Russia, Central & Eastern Europe

Japan

US

Western Europe

India

South East Asia

Chinese mainland

Base: All Respondents (N=700)

Most Popular Product Segment Is Fashion Watches

27

Most Popular Product Segments

27%

25%

30%

35%

0% 10% 20% 30%

Sports

Luxury/ Jewelry

Leisure

Fashion

Base: Valid Respondents (N=699)

Most Popular Colours

Watch Dial Watch Band

Black (48%)

White (33%)

Metallic (24%)

Most

Popular

Top 3Top 3

28

Watch Case

Black (46%)

White (27%)

Metallic (25%)

Black (35%)

Metallic (31%)

Silver (31%)

Black (46%) Black (35%)

Metallic (31%)

Black (46%) Black (35%)

Silver (31%)

Metallic (31%)

Black (46%) Black (35%)

Metallic (25%)

Silver (31%)

Metallic (31%)

Black (46%) Black (35%)

White (27%)

Metallic (25%)

Silver (31%)

Metallic (31%)

Black (46%) Black (35%)Black (48%)

White (33%)

Metallic (25%)

Black (48%)

White (33%)

Metallic (24%)

Metallic (25%)

Black (48%)

White (33%)

Silver (31%)Metallic (24%)

Metallic (25%)

Black (48%)

White (33%)Metallic (31%)

Silver (31%)Metallic (24%)

Metallic (25%)

Black (48%)

White (33%)

Black (35%)

Metallic (31%)

Silver (31%)Metallic (24%)

Metallic (25%)

Black (48%)

White (33%)

Black (46%) Black (35%)

Metallic (31%)

Silver (31%)Metallic (24%)

Metallic (25%)

Black (48%)

White (33%)

29

Nearly 50% of Buyers Have Increased No. of Orders, Order Size & Unit Price

47%

47%

51%

42%

42%

11%

49% 9%

1%

0% 20% 40% 60% 80% 100%

Unit Price

Order Size

Number of Orders

Increased The same Decreased

Base: All Respondents (N=700)

30

18% of Buyers Expect Delivery within1 Month

Longest Acceptable Delivery TimeAfter Order Placed

Within 1month, 18%

Within 2months, 42%

Within 3months, 35%

Over 3months, 5%

Base: All Respondents (N=700)

Longest Acceptable Delivery TimeAfter Order Placed

Within 1month, 18%

Within 2months, 42%

Within 3months, 35%

Over 3months, 5%

Base: All Respondents (N=700)

31

Nearly 80% of Buyers Use HK Trade Fairs to Contact New Suppliers

Channels Used to Contact New Suppliers

5%

8%

14%

19%

22%

79%

13%

13%

0% 20% 40% 60% 80%

Trade publications

Other trade fairs outside HK & Chinesemainland

Chinese mainland trade fairs

Referral by trade partners

Unsolicited calls/ visits by suppliers

Websites

Direct contact with suppliers

HK trade fairs

Base: All Respondents (N=700)

32

26% of Buyers Have Sourced Branded Timepieces

Sourcing of Branded Timepieces

No, 74%

Yes, 26%

Base: Valid Respondents (N=696)

Sourcing of Branded Timepieces

No, 74%

Yes, 26%

Base: Valid Respondents (N=696)

33

Among Those Who Have Sourced Branded Timepieces, 71% Are Currently Sourcing /Considering Sourcing HK Brands

Sourcing of HK Branded Timepieces

No plan atthe moment,

29%

Consideringsourcing HK

brandedtimepieces,

34%

Currentlysourcing HK

brandedtimepieces,

37%

Base: Valid Respondents (N=180)

34

The Biggest Edges of HK's

Watch & Clock Industry

7%

8%

15%

16%

18%

19%

34%

54%

10%

15%

0% 20% 40% 60%

Prompt delivery

Production technology

Good understanding of market & trend

Good customer service

HK has its own brands

Good reputation

Competitive pricing

Products comply with international quality standards

Innovative product design

High product quality

Base: Valid Respondents (N=247)

35

60% of Buyers Have Placed/Are Negotiating Orders at the Fair

Order Placed at the Fair

Yes, 22%

UnderNegotiation,

38%

No, 40%

Base: Valid Respondents (N=673)

36

ConclusionConclusion

37

Conclusion

Market Outlook in 2011Market Outlook in 2011

Both exhibitors and buyers have positive market outlook in 2011.

About 60% of them expected the market in 2011 to be better or much better then 2010.

For exhibitors, the biggest growth regions are expected to be the Chinese mainland (50%), US (20%) and India (18%). For Buyers, the biggest growth regions are expected to be the Chinese mainland (62%), South East Asia (15%) and India (13%).

Nearly 70% of exhibitors expect increase in sales volume to Chinese mainland.

Nearly 50% of buyers have increased number of orders, order size and unit price in 2010.

In order to cope with the rising costs, nearly 50% of exhibitors who have manufacturing plants in Chinese mainland indicated that they will increase price. So far this has not affected their sales volume.

38

Conclusion

Competitive Edge of HK Competitive Edge of HK

83% of exhibitors mainly use HK trade fairs to find new buyers.

Nearly 80% of buyers mainly use HK trade fairs to contact new suppliers.

82% of exhibitors have either received or are negotiating orders at this Fair.

Buyers consider competitive edge of HK’s watch & clock industry includes high product quality and innovative product design.

Among those buyers who are sourcing branded timepieces, over 70% are currently sourcing/ considering sourcing for HK brands.

39

Key Findings Exhibitors

Key Findings Exhibitors

End Thank You

End Thank You