Swiss fashion: the fashionable, functional design niche
09 April 2014
The Swiss are the richest people in the world on average and Switzerland is Hong Kong’s biggest export market in Europe on a per-capita basis, making it a promising destination for the city’s purveyors of fashion and lifestyle products, especially if they are niche or eco-friendly.
The Swiss can justifiably claim to be wealthiest people in the world, with the 2013 Credit Suisse Global Wealth Report claiming the average net worth of an adult in the country was US$513,000 in 2013, almost 10 times the US$51,600 average. At US$80,000, the country also has one of the world’s highest per-capita GDPs.
Despite their stellar purchasing power and being notoriously discerning when it comes to quality and design, the Swiss are a practical people, tending towards “functional yet fashionable” rather than ostentation. Equally, as there is little price pressure, the Swiss – especially the young – are happy to indulge their environmentally-conscious outlook and pay a premium for “green” products and those made by manufacturers with high ethical standards. In general, they are knowledgeable with regard to green labels, such as OEKO-TEX® Standard 100 or USDA Organic and Fair Trade certification.
Though dwarfed by its watches and jewellery industry, fashion is among the lead products among Hong Kong’s exports to Switzerland. In 2013, Hong Kong fashion exports to Switzerland amounted to US$158 million, with clothing, travel goods and handbags the main items.
Import dependent fashion
Given the high labour costs in Switzerland and the fierce competition from low-cost apparel production bases, local production of ready-to-wear apparel is minimal. The Swiss apparel market therefore is almost entirely import-dependent, with its high-end fashion coming from Germany, France and Italy (based on estimates from a number of local clothing traders, this segment actually accounts for about 70-80% of all apparel imports in value terms). Mass-market clothing, meanwhile, is largely sourced from Asian suppliers.
According to local industry sources, there are good prospects in several segments of the Swiss fashion market, including young, particularly in terms of stylish sportswear and casual outfits, jeanswear, popular street brands and high-end designer labels. Given the eco preferences of many Swiss consumers, Hong Kong fashion designers should also consider producing green clothing (garments made from natural fibres, such as organic cotton or bamboo) and functional wear made from hi-tech fibres.
To meet the demand of such fashion-conscious and knowledgeable fashion buyers, Hong Kong companies have to achieve stand-out from the crowd producing either innovative designs or demonstrating functional advances. Aside from using environmentally-friendly textiles with green labels, such as OEKO-TEX® Standard 100 or USDA Organic, to differentiate themselves, Hong Kong fashion exporters should also bear in mind that Swiss consumers are willing to pay a premium for clothing that is produced ethically and has Fair Trade certification. T-shirts, underwear, towels and hosiery that comply with these requirements are increasingly popular among the Swiss.
Another thing worth considering is the expanding retail floor space available for fashion products, as the number of small boutiques decreases. Given the influx of fast-fashion chains, such as H&M and Zara, only the high-end designer brands can justify the costs of operating their own boutiques or flagship stores. Most mid-range apparel is now sold through department stores, while low-end clothing lines are sold at discount stores, supermarkets chains (such as Migros and Coop) and through mail order or online platforms.
While a number of Swiss fashion companies have long operated out of Hong Kong and have adopted it as their sourcing base in Asia, they are now also opting for the city as the prime conduit for accessing the emerging markets of Asia, especially the Chinese mainland. Strellson, Switzerland’s largest menswear manufacturer, for instance, has now opened in Hong Kong, viewing its premises as its Asian showcase. In a similar development, Victorinox – famous for its Swiss Army knives, cutlery and timepieces – also has its Greater China headquarters in Hong Kong and has expanded its product categories to travel gear and fashion. This trend may provide Hong Kong fashion traders with a new wave of opportunities when it comes to forming ventures with Swiss brands or designers.
- Garments, Textiles & Accessories
- Western Europe