www.ChinaSourcingReports.com Pampanga Laguna MANILA Philippines supplier profiles Detailed profiles of 21 suppliers with verified manufacturing and export credentials Product gallery Specifications and full-color images of 179 top-selling export products ranging from Christmas trees to gift boxes Industry trends Coverage of current issues, plus insights into supply centers, products and pricing February 2013 US$150 Holiday Decor & Gifts Essential sourcing intelligence Global Sources is offering this series of Developing Country Sourcing Reports as part of its corporate social responsibility undertakings in partnership with the Hinrich Foundation, a philanthropic development organization whose mission is promoting sustainable global trade. The aim is to give international buyers new sourcing opportunities from experienced exporters, generating orders and creating lasting jobs in developing economies. Sampl pl ds f current issues, rent issues, sights into supply s into supply nters, products and pricin nters, products and ge only BUY NOW
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www.ChinaSourcingReports.com
Pampanga
LagunaMANILA
Philippines supplier profi lesDetailed profi les of 21 suppliers with verifi ed manufacturing and export credentials
Product gallerySpecifi cations and full-color images of 179 top-selling export products ranging from Christmas trees to gift boxes
Industry trendsCoverage of current issues, plus insights into supply centers, products and pricing
Global Sources is off ering this series of Developing Country Sourcing Reports as part of its corporate social responsibility undertakings in partnership with the Hinrich Foundation, a philanthropic development organization whose mission is promoting sustainable global trade.
The aim is to give international buyers new sourcing opportunities from experienced exporters, generating orders and creating lasting jobs in developing economies.
Samplpldsf current issues, rent issues,
sights into supply s into supply nters, products and pricinnters, products and
HOLIDAY DECOR & GIFTSSupplier capability in the Philippines
Renewed demand from key overseas markets is resulting in steady growth for the Philippines’ holiday decor and gifts industry.
The gradual recovery of the US from the global financial slump and sustained orders from EU members unaffected by the sovereign debt crisis are driving exports. Shipments to new destinations are also pushing up revenue.
The US is the sector’s primary importer as it takes up more than half of output. The EU is the second-largest, accounting for nearly one-fourth.
Although the Philippines is a minor player in the global supply market, it relies on a number of competitive advantages. The most signifi cant of these is the country’s long history and strong artistic capability in designing handicrafts. Access to natural materials not typically adopted by other sourcing hubs in Asia is another strength.
Objective, methodology & scope
1. Suppliers interviewed for this report generally expect to raise product prices over the next six months in response to increasing expenditure for raw materials and manpower. A considerable number, however, plan to keep quotes unchanged to ensure competitiveness and attract repeat buyers.
2. Export revenue in the next 12 months is predicted to increase as a result of rising demand from the US and the EU. A significant number of makers forecast flat growth, mainly due to challenges confronting the line.
3. The most critical difficulty facing the industry is price competition, especially against manufacturers in China. Another roadblock affecting the sector is diminishing sales of Christmas decorations due
Key findings
Executive Summary
In this report• 16 in-depth company profi les• 5 short company profi les• 179 top-selling export products• Supplier demographics• Supplier survey• Industry statistics and charts
This Philippines Sourcing Report is part of a series designed to provide buyers with information on new products from export manufacturers in supply markets that specialize in handmade merchandise.
The Developing Country Sourcing Report series is part of Global Sources’ corporate social responsibility initiatives. It is offered in conjunction with the Hinrich Foundation, whose mission is promoting sustainable global trade. One of its objectives is to help create jobs in developing Asia through export promotion.
To produce this report, large, midsize and emerging manufacturers, all with substantial export experience, were surveyed. The selection of suppliers is designed to reflect the composition of the industry in the Philippines in terms of geographic location, materials used and range of products offered.
For in-depth profiles, our researchers visited the facilities of each company and interviewed senior executives who discussed their recent performance and provided forecasts for the next 12 months. All other makers in this report were either visited or contacted by phone.
In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including a breakdown of exports by product type and market. Suppliers also participated in a survey designed to provide insight into the industry.
This report covers different types of holiday decor and gifts available in the Philippines, including Christmas ornaments, gifts and photo frames. Each product category has its own price guide that describes features of the low end, midrange and high end.
The Industry Overview section discusses key issues affecting export manufacturers. It provides insight on the composition of the industry and elaborates on the important supply centers within the Philippines.
The Products & Prices section details the features and price ranges of holiday decor and gifts. It also examines the design and manufacturing processes, main materials used, and sourcing centers where components are procured.
to changing demographics and customer preferences in key markets in the West, particularly the US.
4. Yuletide ornaments remain as the best-selling product classification. Gifts are a smaller line yet account for a sizeable amount of exports. Design trends in the coming 12 months will emphasize adopting bright colors and intricate embellishments. Continued use of environment-friendly materials is also expected as the popularity of models made of sustainable inputs increases.
5. Most companies are categorized as micro- or small enterprises. Makers are predominantly located in Metro Manila, where various types of holiday decor and gifts can be sourced. Supply zones are also found in several provinces surrounding the metropolis.
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4 Philippines Sourcing Reports
CONTENTS
Disclaimer: Any recommendation contained in this report may not be suitable for all investors or businesses. Moreover, although the information contained in this report is obtained from sources believed to be reasonably reliable, the accuracy or completeness of such information cannot be guaranteed. The author and the publisher of this report (and the publisher’s affi liates, agents, sales representatives and service contractors) do not make any representation or warranty whatsoever (whether express or implied) in relation to any of the contents of this report (including any information, opinion, recommendation or conclusion contained in this report) (collectively, “Contents”), whether as to the accuracy, completeness, quality, fi tness, suitability or reliability of such Contents (or any portion thereof ) or otherwise, and shall not be liable under any circumstances whatsoever for any error, omission, defect or defi ciency in, or for any use of or reliance on, such Contents (or any portion thereof ).
All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. Products that are not the specifi c topics of editorial articles are shown for illustrative and/or demonstrative purposes only. We, our affi liates, and our affi liates’ respective directors, offi cers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof ) which infringe on any intellectual property or other rights of a third party.
Contents
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ISBN 978-988-15980-7-3
EXECUTIVE SUMMARY ............................................................................................................................................................................................... 3 Key fi ndingsObjective, methodology & scope
INDUSTRY OVERVIEW ............................................................................................................................................................................................. 11 Supplier SummaryExport valueExport markets
Products & prices ........................................................................................................................................................................................................ 13 Production & export statisticsPrice guides
SUPPLIER PROFILES ................................................................................................................................................................................................... 19 Supplier matrix: Comparison of supplier location, sales revenue & export capability Profi les of 21 verifi ed suppliers
T DETAILSAILS ................................. ......................
www.ChinaSourcingReports.com 11
Industry Overview
Industry Overview
Exports of holiday decor and gifts from the Philippines have been on an upward trend in recent years, driven primarily by reinvigorated demand from the US.
Growth has been modest, with annual revenue starting from 2009 increasing by an average of 7 percent. This remains markedly lower compared with precrisis levels but the industry has adopted a cautiously optimistic outlook that it has now emerged from the worst of the slump. Within that period, foreign turnover contracted by about 34 percent.
Between the two segments, holiday decor is the larger earner, accounting for nearly 60 percent of combined sales. In 2011, the most recent period for which statistics are available, the line expanded by 11 percent as it posted $33 million in overseas shipments. The sector’s improvement is primarily attributed to the steady recovery of the US market from the economic slowdown.
Exports of gift items, on the other hand, exceeded $20 million in 2011, equating to a decline of more than 12 percent over the previous year. The weakening is seen as an effect of the sovereign debt crisis affecting the EU. Compared with holiday decor, the gifts segment has a bigger client base in the bloc.
Projections in the coming 12 months indicate sustained moderate growth. Sales of holiday decor are estimated to climb by as much as 7 percent. Revenue from gift items is seen to rise 4 to 5 percent. With the US having an increasingly improving business climate, spending for nonessential goods such as handicrafts is consequently expected to go up. Demand from EU members not significantly affected by financial burdens is additionally a factor toward the industry’s development. Deliveries
to alternative markets, including South Korea, Singapore, Australia, India, Russia and the Middle East, are also predicted to contribute considerably to earnings.
As a whole, the US is the largest importer of holiday decor and gifts from the Philippines as it takes up nearly 60 percent of total exports. The EU is the second-biggest destination, accounting for one-fifth of shipments. Key markets in the bloc include Germany, the UK, France, Belgium, Italy and the Netherlands. Twelve percent of turnover is sent to the Asia-Pacific region.
ChallengesThe Philippines is a minor player in the global market for holiday decor and gifts, contributing less than 2 percent to overall supply. Despite posting growth in recent years, the industry appears to maintain its marginal status as it faces a number of diffi culties.
Intense price competition is the most critical roadblock. Domestic enterprises are generally unable to match low prices offered by China manufacturers. In addition, several sourcing hubs in South and Southeast Asia emphasize products made of natural materials similar to those adopted by companies in the
Philippines. The market, therefore, becomes saturated with items made of plant-based inputs, making it harder for local suppliers to remain viable.
To cope, the Department of Trade and Industry has enacted a number of directives aimed at regulating the amount of natural components that can be exported. These include setting quotas on outbound shipments of bamboo and wood harvested from plantation forests. Furthermore, the agency has banned the sale of timber obtained from natural forests, raw rattan, and seeds, seedlings and root stocks of ramie and abaca.
Another hurdle confronting the sector is the diminished demand for Christmas ornaments, which is the biggest line comprising the holiday decor segment. According to the Christmas Decor Producers and Exporters Association of the Philippines or CDPEAP, a local trade organization, the shifting demographics of
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Year established 1992Head offi ce location Quezon City (Metro Manila) Ownership Foreign-investedFactory location(s) Quezon City (Metro Manila) Full-time employees 248Total annual sales (all products) $1,500,000
Sales & output: Holiday decor & gifts
Business contact MENESES LoyaltyPhone (63-2) 721-1533Fax (63-2) 721-1533E-mail [email protected] www.globalsources.com/benjoy.coAddress 6 Manga Road, New Manila, Quezon City, Metro Manila, Philippines
Established in 1992, Benjoy manufactures holiday decor. The company generates $1.5 million in total annual revenue.
The entire output in the line is sent abroad. Australia is the sole overseas destination.
Christmas tree ornaments are the best-sellers. The enterprise also produces baby toys and bedding.
Prices range from $1.20 to $15. Four-inch snowman figurines are offered for $1.76. Models in animal and angel designs are quoted at $2.50 and $2.75, respectively.
Felt is the main fabric used and sourced from the Divisoria market in Manila. Polyester fiberfill utilized for stuffing is procured from vendors in Parañaque city.
A designer creates up to 300 new models every year. Samples are sent within two weeks.
Benjoy operates a 1,200sqm factory in Metro Manila’s Quezon City. The plant is equipped with die-cutting and
sewing machines, which are bought locally. Screen-printing, handstitching and computerized embroidery are farmed out to nearby subcontractors. The rest of the production processes are done in-house.
There are about 250 permanent employees. The peak season is from July to September.
Twenty inspectors conduct QC on all finished items before packing and shipping.
Polybags and cartons are used as packaging. The minimum order requirement is 300 pieces. Delivery usually takes 90 days.
Benjoy regularly participates in the Manila Furnishings and Apparel Manufacturers’ Exchange trade show. The company is a member of the Home Accents Group of the Philippines Inc., Philippine Exporters Confederation and Philippine Toy Association.
The supplier plans to introduce its products to the EU market over the next 12 months.
Materials used Fabric Yes Natural materials No Resin No Metal No Wood No Other No Exports by product Christmas trees & ornaments 80% Christmas lanterns – Other holiday decorations 20% Gifts – Photo frames – Exports by market North America – EU – Europe (non-EU) – Asia-Pacific 100% Middle East – Other –