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European gift companies look to Asia to source and sell

Asian companies were predictably well-represented at this year's Giftrends trade show in Madrid. The emphasis for many, though, was on accessing Asian consumers, rather than on simply sourcing cheap electronic dancing monkeys.

Photo: All presents and correct: gift ideas from Puckator.
All presents and correct: gift ideas from Puckator.

The perception of China (and the wider Asian market) has long changed. While still retaining its status as the "workshop of the world", many countries – Spain among them – have woken up to the possibilities offered by the vast mainland consumer market and that of its neighbouring nations.

The personal and business gift sector has been swift to recognise the possibilities offered by China's expanding middle classes. With business gifts de rigueur in the mainland commercial sector and personal presents highly-prized among extended family networks in the country, China has become a priority for many companies in the industry.

According to a recent survey by the Regalo Fama Association (RFA), the industry body representing Spanish manufacturing companies and wholesalers in the gift industry, more than 70% of its members are now actively targeting the international market. While the European Union still represents the bulk of these sales, many of these companies are now successfully exporting to Eastern Europe, Latin America, the US, the United Arab Emirates, Japan and Australia.

These sales efforts have been typically spearheaded via the Internet, although domestic and international trade fairs have also played a significant role in global marketing for many companies. The six most important international events for many in the sector are said to be the Canton Fair (Guangzhou), Maison & Objet (Singapore), Macef (Milan), Ambiente (Frankfurt), the HK Mega Show and the Hong Kong Gifts and Premium Fair (both in Hong Kong).

In terms of jewellery and watchmaking exports, Spain recorded sales of €329 million (US$443 million) in the period January-May 2013. Of this, exports to Switzerland accounted for €118 million, followed by Hong Kong/mainland China (€36 million), the US (€33 million) and France (€30 million).

In terms of imitation jewellery, Spanish manufacturers turn over €280 million annually, with exports accounting for €41 million of this in the first five months of this year. This represents a 165% rise in exports compared to the same period last year.

Typically, the Spanish gift sector is dominated by small- to medium-sized companies on the manufacturing side. In terms of distribution and sales, retailers tend to stock multiple brands and are largely run as franchises.

The 2013 Giftrends event, held in Madrid in September, provided a revealing snapshot of the Spanish gift sector. In total, the event attracted 1,186 companies from 34 countries, across a floor space of 45,000 square metres. Tellingly, the five years of the economic crisis have seen a 30% drop in the number of Spanish retail outlets in the gift and accessories sector.

Throughout this period, companies in Spain have increasingly looked to the international markets to provide a lifeline. It is a policy that has certainly met with some success – export sales in the jewellery sector, for instance, grew by 16% in 2012.

A wider recovery, however, is now predicted for 2014, according to a number of figures in the industry. Domingo Ibáñez, Commercial Director of Karactermania, a Barcelona-based TV and cartoon merchandising company, certainly believes the industry has hit rock bottom. Addressing the prospects for 2104, he said: "A number shops have now reduced their purchases to a level where they have almost no stock at all. As a result of this, sales may begin to increase even before the market truly revives next year."

The high hopes being pinned on a 2014 recovery saw many companies at the event keen to showcase their creativity. In truth, Spanish companies have a long and illustrious history in this sector. More than 3,000 companies, for instance, are active in the country's jewellery industry, generating an annual turnover of €1.5 billion, seeing the sector ranked fourth in Europe overall.

Away from the jewellery on offer, it was the novelty items that attracted the most attention at this year's event. Among the most striking of these was the Opti-Myst range of simulated "real" fires, distributed across Spain and Portugal by Barcelona-based Bosch Marin S.L. Providing genuine electrical warmth, these pseudo-fires impressed many with their realistic flames and convincing smoke effects.

Making something of a curious debut at the show was A Que No Hay Huevos (literally, "Here there are no eggs"), a Barcelona-based design company. The business was founded by Pedro Galván París who describes his team as "Dreamers convinced they can change the whole world while bringing a few smiles." The company currently has 8,000 Facebook followers, with its stylish T-shirts and babies' playsuits proving its most popular items.

Photo: Crystal Rise's jewellery range.
Crystal Rise's jewellery range.
Photo: Arbis Mas' Hong Kong umbrellas.
Arbis Mas' Hong Kong umbrellas.

Novelty was also the watchword over on the Puckator S.L. exhibition stand. The Valencia-based gifts wholesaler chose the event to showcase its range of model fairies, witches, Mexican skulls and other, more esoteric figures. Its star performer was a dancing monkey (€1.65), with the company having already sold more than 50,000 of the tune-friendly chimp. The company sources all of its range in China and even has its own facilities in the country.

Ultimately UK-owned, Puckator boasts an extensive catalogue of gift ideas, an online shopping portal and a wide international presence. According to its Spanish Commercial Delegate, Vicente Suay, this year the company has enjoyed a 25-30% increase in sales compared to 2012 and expects its results in 2014 to be even better.

Aiming for, perhaps, a slightly more upmarket sector than those purchasing Puckator's prancing primate, Madrid's Experto Peletero S.L. had on offer a range of leather goods, courtesy of Tri-Union, its northeastern China-based supplier. The company specialises in avant-garde leather apparel, including coats, jackets, accessories and even mink blankets.

Perhaps unsurprisingly, Ignacio Aizenstain, the company's Managing Director, sums up its approach as "offering the best quality at the best prices". Its stocks run from jackets priced at €400 down to vests at just €28, with Aizenstain claiming that the company finds its success at either of the extreme ends of the price spectrum.

Overall, Asian manufacturers were – as might be expected – well represented at the event. Highlights here included a range of art-themed umbrellas imported from Taiwan and Hong Kong by Arbis Mas S.L. (€13 to €15) and a selection of India-made handbags and wallets (circa €12).

Hong Kong was also making its presence felt over in Iberjoya, the concurrent jewellery exhibition taking place at the same site. Kowloon's Crystal Rise Jewellery, for instance, had brought its extensive range of classic jewellery styles to Madrid for the event. With an array of items on offer, including gold rings, bracelets and diamond earrings, prices ran from €2,000 to €10,000.

Christelle Ltd, a fellow Kowloon company, is a five-year veteran of the show and was, once again, showcasing its collection of classically styled gold jewellery, a variety very much favoured by Spanish consumers. The company produces the range especially for European buyers, while its mainland customers, apparently, prefer a more avant-garde approach.

Despite the obvious allure of Asia – both in terms of sourcing and as a potential market – some attendees were cautious about the future fortunes of the region. Rafael Hernández, the owner of Madrid's Kanjimania, an importer of Southeast Asian furniture, was not alone in thinking Asia should heed the lessons of the West.

He said: "The situation in Southeast Asia is very complicated right now. Costs have skyrocketed and many factories have closed.

"The emphasis is now on investing in real estate. There is a danger that the bubble might burst, much as it did in Europe and the US a few years back."

Photo: The gifts show that keeps on giving: Giftrends 2013.
The gifts show that keeps on giving: Giftrends 2013.

Giftrends 2013 took place in Madrid between 11-15 September. The event included three linked trade shows – Intergift, Iberjoya and Bisutex – and took place at the city's IFEMA Convention Centre.

Isabel Herrero and José María Alarcón,
Special Correspondents, Madrid

Content provided by Picture: HKTDC Research
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