According to events organiser UBM Asia, the Cashmere World show which has relocated from Beijing to Hong Kong, has had a successful debut in Hong Kong. The fair is said to have benefited from the presence of important international buying offices in Hong Kong enjoyed synergies with the co-located Fashion Access (25 – 27 September 2012) show. Close to 2000 buyers from 50 countries were on hand to view the fibres, yarns and finished cashmere products on offer.

Hong Kong registered the largest number of visitors with 942, followed by China with 500 and Japan with 114. Other countries with substantial buyer numbers were Australia, India, Italy, Korea, Taiwan, Russia and USA.

Informative seminars

A number of informative seminars held during the fair including, ‘Peclers Paris FW13-14 Key Accessories Trends for Women/Men/Youth/Kids’ and ‘Buying Accessories for the European Market’, which provided the latest trends for cashmere industry.  ‘Solutions to Exporting Cashmere Products to Western Countries’ and ‘Development & Trends in the Cashmere Trade’ offered alternative perspectives from different sectors of the cashmere industry.

Mr Hao Xukuan, chairman of Viction Cashmere Group, took a supplier’s point of view, highlighting the superior position of China’s cashmere. Hao noted that China produces 200,000 tons of cashmere fibre a year, 70% of which comes from Inner Mongolia.

“In fact, 50% of the world’s cashmere comes from this region. The quality is excellent, being shiny white and of 14 microns in fineness. With a good supply of quality raw material, together with state of the art machinery and techniques plus professional management, China has an advantage over other cashmere supplying regions of the world,” Mr Hao said.

“However, after the 2008 financial crisis, China was faced with a number of challenges including a strong currency, raw material price increases and rising labour and energy costs – all of which chipped away at China’s cashmere advantage. The strict ecological production requirements of Western countries also created a barrier that kept many Chinese cashmere brands from entering the international market.”

Mr Hao believes that China must develop a good platform for its cashmere industry, developing it as a strong and reliable manufacturing base. His own company Viction has been a successful supplier of cashmere fibre, yarn, and finished items to the world’s leading cashmere brands. 

Developing luxury brand image

Another problem that China now faces is the lower sale price of cashmere which is killing the luxury image of cashmere and hence its profits. Mr Hao believes that Chinese cashmere companies also must strive to develop a luxury brand image. Viction, for example, is now venturing into brand development with the end in view of marketing its own cashmere labels to domestic customers which he sees as a huge potentially profitable market.

 In fact, the show organisers say, the World Luxury Association (WLA) has forecasted a sharp rise in the purchase of luxury goods until at least 2014/2015, with China leading the way.  Already, Chinese purchases of luxury goods in France, Italy and the UK account for 48% of all sales. With China reducing its customs duties on imported luxury goods, starting October 2011, it is expected that luxury sales within China will increase considerably. Prestige cashmere labels from Italy and Scotland are already present in China but reduced import tariffs will make China even more attractive to international and Chinese brands.

From the other end of the spectrum, Ms Alessandra Cocchi, managing director of EastMax Fashion Ltd spoke from the perspective of a buyer. She has nervously been watching the ongoing fierce price war, with China buying up a quarter of greasy cashmere and creating a monopoly, she said.

“Available quantities of greasy cashmere have been drastically reduced – China is down to 5-6000 tons from 11-12000 tons and Mongolia is now below 3000 tons down from 5-6000 tons 2-3 years ago. As an extension of the supply situation in China and Mongolia, China has been actively buying in Afghanistan and prices there have also surged up to Mongolian levels with most supplies depleted,” Ms Cocchi said.

Cocchi is also concerned about the increasing number of cashmere goats, resulting in less grazing grassland per goat, causing the fibre to become coarser. “Breeding in quantity and not quality is not good for the future of cashmere industry,” she warned. Concurring with Mr Hao, she stressed that cashmere should remain a luxury item and the need to eliminate low and mass market products to uphold the fine image of cashmere.

Cashmere composition tests

Mr Murray Ko Sek-yan, MD of Meridian Industries Ltd took on a buyer as well as a supplier perspective. His company is involved in cashmere production from the fibre stage to the end product. It includes overseeing the healthy growth of the goats, the harvesting of the fibres, processing it into yarns and the knitting of the final garments – the total production line. 

He noted that Western customers place great emphasis on cashmere composition tests to show proof of quality. However, test results are far from accurate, with the same batch of cashmere tested at different test laboratories, or even in the same laboratory but with different technicians, yielding different results. China uses the mostly optic microscopy approach while Europe does scanning electron microscopy.

 Hence he recommends in house and third party testing every step of the process; doing counter testing to verify; avoiding contamination of the tested cashmere fibre with other fibres; and using a reputable testing company. Keeping good records of testing on the same lot of cashmere fibres at different stages of the process would be beneficial when challenged to show proof by the buyer. “If you have done due diligence, the buyers are more inclined to work it out with you,” he said.

 “No doubt, Asian manufacturers have learned hard and fast about the cashmere business in the recent past,” said Mr Ronnie Lamb, an international cashmere consultant. “Some of them are now ready to test their skills in the international market by launching their own brands. Brand is about reputation and branding is reputation building. Brand strategy and business strategy are related and works hand in hand. Good brands involve clarity, personality, reliability, trust, the promise of an experience, and the consistent delivery of that experience.”

Cashmere World is a vertically integrated business platform for the international cashmere trade. Started in 2010, it has since become the annual meeting place for cashmere producers and buyers, a catalyst for innovations in cashmere production technology, and an important venue for the promotion of the unique qualities that make cashmere one of the world’s best-loved luxury materials. It returns next year, from 25 to 27 September.