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20th Hong Kong Watch & Clock Fair (HKTDC Watch & Clock, Vol 03,2001)

Vol 3, 2001




Product Features
HK Enterprise Internet

FAIR PREVIEW

20th Hong Kong Watch & Clock Fair

 

20th Hong Kong Watch & Clock Fair

September 5-9, 2001

Time Saver

Register in advance on the Internet to avoid queues at the fair.

Simply click on to the Web site http://hkwatchfair.com/ and register online.

Show Time

Fair Dates & Opening Hours
September 5 10:30 am - 6 pm
September 6-8 9:30 am - 6 pm
September 9 9:30 am - 5 pm
Buyer Registration Counter
September 5 10 am - 5:30 pm
September 6-8 9 am - 5:30 pm
September 9 9 am - 4:30 pm
Visitor Enquiries: (852) 2240-4388

International Visitors Respond To Myriad Of Products And Attractions

THE Hong Kong Watch & Clock Fair, as one of the world's leading events of its kind, is widely recognized by industry leaders as a vital showcase for timepiece trends and new product models.

Between September 5-9, 2001, the fair's 20th edition will provide a prime meeting place for manufacturers and buyers wishing to network, promote new products and conduct the day-to-day business of buying and selling.

Almost 800 Hong Kong and overseas exhibitors, plus an estimated 16,000 international buyers, will pack the Hong Kong Convention and Exhibition Centre for the event. The fair will occupy 34,600 square metres in Exhibition Halls 1, 2 and 5, plus the Grand Hall.

Displays will include an array of mechanical, LCD, quartz-analog and digital watches; quartz, mechanical, electronic and electrical clocks; timepiece movements, dials, cases and bands; as well as tools, machinery, packaging and publications.

The organisers, the Hong Kong Trade Development Council (TDC), along with the Hong Kong Watch Manufacturers Association Ltd and the Federation of Hong Kong Watch Trades and Industries Ltd, aim to provide opportunities to buy and sell with partners from as many countries and regions as possible.

"Our main focus is on matching Hong Kong sellers with overseas buyers. We want to promote Hong Kong watches and clocks for export and to help small and medium-sized enterprises (SMEs) tap into overseas markets," says TDC senior exhibitions manager Anne Chick.

Although many of the exhibitors are Hong Kong manufacturers with production facilities on the Chinese mainland, the fair does attract strong international participation.

At last year's event, almost 20% of the exhibitors came from overseas, with the Chinese mainland, France, India, Korea and Taiwan all operating group pavilions. Similarly, more than a third of the buyers came from overseas, representing 92 countries and regions. Attendance surged from North America, Africa, Latin America and the Middle East.

However, economic uncertainty in the US, Hong Kong's largest export market for timepieces, may affect 2001 attendance.

"There may be fewer US buyers because the economy there is slowing a bit. But we anticipate more European buyers, and Asians are slowly returning (after economic problems starting in 1997)," Chick says. Markets in Central America, South America and the Middle East also show signs of rising buyer interest.

In addition to its commercial function as a marketplace, the fair serves to promote design excellence, originality and creativity. One means to inspire talent is the Hong Kong Watch & Clock Design Competition, which usually draws more than 100 entries per year.

"Developing brands and designs is very important for industry prosperity and growth. This competition aims to nurture that," Chick says. Creativity boosts Hong Kong's standing in the ODM market.

To highlight leading brands, an even bigger and better special Brand Name Gallery, launched in 2000, will return. Buyers from all overseas markets are drawn to this attraction.

Visitors keen to explore new trends and industry developments can attend an Asian Watch Industry Conference, where an international panel of expert speakers will share insights and discuss issues of concern.

For the second consecutive year, an on-site user survey will assess industry views on product trends, market developments and the Chinese mainland market.

"We will interview exhibitors and buyers for the first few days of the fair. On the final day, we will publicize the findings at a press conference and also upload them to our fair Web site (http://hkwatchfair.com)," Chick says.

On a lighter note, fairgoers can mix pleasure and networking with business during a cocktail reception and a post-fair Golf Classic.

Function, Appearance, Size All Part Of The Newest Trends

AMONG this year's hottest timepiece trends are jumbo-sized cases for women's watches, imitation diamond settings, two-tone metals and still more multifunction watches.

In the prelude to the Hong Kong Watch & Clock Fair 2001, exhibitors are applying finishing touches to new models and closely watching overseas economic news.

Big, bold watches, plus dressier looks, are on the cards for women. "A lot of international brands are making oversized watches for women. The cases are highly polished and the same size as men's or bigger," says Silcon Watch Co Ltd general manager Thomas Lam.

"For the past few years, stainless steel was a strong seller. Maybe it was too masculine, so women want something that looks dressier. They appreciate some stones [imitation diamonds] on watches."

Outdoor-style, multifunction watches that display the temperature or barometric pressure are also popular among men and women, Lam adds.

Fashion watches remain strong. While the stainless steel "white look" still predominates, there is a hint of change.

"Leather straps are coming back, especially coloured ones. Two-tone watches are beginning to appear as well," says Renley Watch Mfg Co Ltd managing director Stanley Lau. The company makes medium-to-high-end watches at US$18-100 FOB Hong Kong.

Buyers are demanding more clocks with different types of finishes (wood or metal) and a greater variety of materials. Wall clocks can be big, but others are smaller and lighter.

"Clocks are becoming more fashion-oriented, just like watches. A 1950s or 1960s retro look is strong, along with hi-tech, silver-looking or aluminium styles. We also see demand for distressed styles, with clocks looking old and run-down," says Silcon Electronics managing director Kenneth Ng. The firm, which is the parent company of Silcon Watch Co Ltd, makes wall, desk and travel clocks at US$6-40 FOB Hong Kong.

On the sales front, some industry executives are concerned that US economic hiccups may affect business. For the past three years, the US accounted for 25-26% of Hong Kong's total watch exports. The EU was a close second at 22-24%, followed by the Chinese mainland at 13-14%.

Manufacturers hope higher orders from Europe and other markets will offset any US shortfalls. "It is too early to say if there will be fewer Americans at the Hong Kong Watch & Clock Fair. But we do expect to see more buyers from Europe and the Middle East," says Sweda Ltd chairman Paul So. Sweda makes digital and anadigit models at US$3-12 FOB Hong Kong.

Chung Nam Watch Co Ltd managing director Bob Chong anticipates a surge in business from emerging markets, like the Middle East and South America. "Through our joint efforts with TDC and the Hong Kong Watch Manufacturers Association, we have taken our products to those areas for the past few years. The results are starting to show," he says.

If the US economic slowdown continues, Chong foresees tighter consumer spending in Europe too. "Until now, Europe has performed well, but what happens in the US will probably affect the European economy," he says.

"Consumers will become more conservative in spending. Luckily, our watches are in the low-to-medium price range [typically US$10-30 FOB Hong Kong]," he adds.

The Asian outlook is brighter. TDC economists predict sales of complete watches and clocks on the Chinese mainland should remain steady as consumer spending strengthens. The mainland's imminent accession to the World Trade Organization should provide Hong Kong companies with new opportunities due to liberalized trade and distribution sectors.

Exports to Japan should remain stable, while those to other Asian nations should perform moderately. Much of the demand may surround moderately priced items because Asian consumers remain price-sensitive and cautious.

This Timepiece Fair Offers Many Faces

On display, on stage, on screen, on the wrists of fashion models, even on the golf course.... New timepieces and people in the business of buying or selling them find an almost unlimited variety of ways to gather information, exchange opinions and conduct business during the Hong Kong Watch & Clock Fair. Highlights include a cocktail reception and also a timepiece fashion parade. Naturally, many of the business negotiations occur in exhibitors' booths, while the Asian Watch Industry Conference is an occasion for intense information gathering. However, timepiece-related talk continues on shuttle buses from the Hong Kong Convention and Exhibition Centre to leading hotels and on the groomed grass of play during a post-fair golf competition.

Flexible Producers Supply Diversity Plus High Quality

THE status of Hong Kong as a major supplier of watches and clocks is apparent from its massive exports. In 2000, Hong Kong exported US$5.6bn worth of timepieces, up 4% on the previous year.

Renowned for variety and quality, Hong Kong companies, usually with factories on the Chinese mainland, produce an assortment of timepieces. These vary from analog to digital, metal to plastic, and fashion to classic models, plus novelty, sport and jewellery watches.

"When people think of watches, they think of Switzerland, Japan, Hong Kong and the Chinese mainland. But watches made on the mainland are really Hong Kong-made watches," says Chung Nam Watch Co Ltd managing director Bob Chong.

Hong Kong also exports substantial quantities of timepiece components, such as assembled movements, cases, watch straps, dials and parts for cases and bands.

"Among the retail brands you see in shops today, I would say 80% of the components are made in Hong Kong-China factories," Chong adds.

Competition in the low-priced sector prompted many Hong Kong-based companies to reduce costs by moving production to the mainland. Yet some manufacturers, like Renley Watch Mfg Co Ltd, still maintain their production bases in Hong Kong.

Established 18 years ago, Renley makes medium-to- high-end quartz-analog watches priced at US$18-100 FOB Hong Kong. "We pride ourselves on making watches to certain quality standards," says managing director Stanley Lau.

Although most Hong Kong manufacturers, including Renley, produce largely on an OEM basis, some have ODM operations and their own brands.

"We make ODM watches, and about 10 years ago, we bought three Swiss watch brands - Jean D'Eve, Buler and Sultana. Any company wanting a brand has three choices. It can buy a brand, license one or create its own. We chose to buy," Lau says.

Jean D'Eve and Buler are produced in Switzerland, while 70% of the Sultana brand is produced in Hong Kong, and the remainder in Switzerland.

Chung Nam, a low to medium/high-end manufacturer capable of producing one million watches per month, took the same brand route as Renley. In the late 1990s, the company bought one Swiss brand, Roamer, and secured a worldwide licence for another, Caterpillar.

"The brands help give more information about what the market wants and so are very good for our OEM business. They also give our team opportunities to work at a higher level in terms of the components we make," Chong explains.

Founded in 1935, Chung Nam started out making watch straps. By the 1950s, it made metal bands. The company began producing mechanical watches in the 1960s, followed by LCD and quartz-analog watches in the 1970s. Its watches retail at US$10-1,000.

Hong Kong companies have accelerated their investment in modern production technology to enhance quality and productivity.

"We use metal-injection methodology [metal in powdered form is injected into moulds] to make cases, buckles and bracelets. We also invested in iron plating, which is an environmentally friendly process, and we have computer-numerical-controlled machinery to make more precise cases and bracelets," Chong says.

Facing stiff competition, Hong Kong companies emphasize research and development.

"We have brought in nine people to our R&D department in the last five years. Since we cannot compete on price with factories on the Chinese mainland, we have had to move upmarket," says Latitude Ltd business development director Ricky Law.

Latitude Ltd makes 350,000 digital watches per month at US$2.50-150 FOB Hong Kong.

"A few years ago, we did basic models. Now we are moving to more hi-tech, multifunction watches. Previously, we focused on models below US$3, but now almost 30% of our production involves higher-end models at US$20-45."

Interest in quality standards has prompted many Hong Kong firms to acquire ISO certification. The industry has continued to enhance its quality assurance by creating the Hong Kong Watch Grading and Certification System to provide manufacturers with quality testing that meets international requirements.

Just Like The Buyers And Sellers, Expectations Prove Diverse

EACH year the Hong Kong Watch & Clock Fair unfolds against a heady background of business, camaraderie and the excitement of seeing all the newest timepieces.

Hong Kong and overseas exhibitors all have their own expectations of what they hope to achieve. For some Hong Kong companies, such as Latitude Ltd, the fair represents a crucial source of annual revenue.

"It is very important for us. More than 70% of our orders, directly or indirectly, come from the fair, so we really want to find potential buyers and secure orders," says business development director Ricky Law.

A digital-watch specialist, Latitude sells models priced at US$2.50-150 FOB Hong Kong. "Our buyers look for quality. They want durable watches. After that, they look at the price," Law says.

For Chung Nam Watch Co Ltd, orders are less important than networking and greeting customers. "The Hong Kong Watch & Clock Fair is a place to really meet all the buyers from different parts of the world, to exchange market information and to prepare for the coming year," says managing director Bob Chong.

"Besides our regular customers, we hope to attract new ones. For us, this is an even more important goal than gaining business from existing customers."

With uncertainty surrounding the US economy, some exhibitors have set modest goals for this year's event. "Maintaining sales or achieving small growth will be satisfying for most people," says Chong.

According to Law, "If the US economy is stable, sales should be OK."

The true indication of how the US and other overseas markets fare will come from the buyers. "I really don't know how many buyers will come, but whether they place orders is another big question," Law says.

Numerous exhibitors have new models under development to launch at the fair. For example, Silcon Watch Co Ltd, a maker each month of more than 40,000 watches priced at US$12-30 FOB Hong Kong, will introduce 50 new models.

"The Hong Kong fair is a good time to show new items, but we are also interested in OEM work," says general manager Thomas Lam.

For Silcon, the fair is crucial because of its position on the calendar. "Buyers want to place orders for the Christmas selling season," Lam notes.

Renley Watch Mfg Co Ltd managing director Stanley Lau does significant business at the fair. "The Hong Kong Watch & Clock Fair is one of the year's most important events for us and for the watch industry. We need to see our customers 2-3 times a year, and this is a good opportunity to have all the customers in one place," he says.

However, he anticipates customers may be less inclined to order large quantities this year. "Due to economic uncertainty, many US customers will be conservative about buying for stock. We expect them to buy only enough for immediate needs," he says.

Sweda Ltd managing director Paul So hesitates to predict the business climate at the upcoming fair. Nevertheless, Sweda is putting a major effort into promoting its sleek o.d.m. brand launched in 1999. Watches in the line feature a host of user-friendly digital functions and retail at US$80-120.

"We had a good response at Basel 2001, and we are looking for more agents to promote the brand. We will use the fair to achieve that goal," So says.

WRITTEN BY ANDREA PAWLYNA

"More than 70% of our orders,
directly or indirectly,
come from the fair,
so we really want to find
potential buyers and secure orders."
- Ricky Law
business development director
Latitude Ltd

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