HKTDC Hong Kong Gifts & Premium Fair 2016: Buyers’ andExhibitors’ Survey

Figurines and decorations are expected to offer the greatest potential according toexhibitors and buyers at this year’s HKTDC Hong Kong Gifts & Premium Fair. Thecategory is common online, with close to one-third of surveyed e-tailers selling figurinesand decorations. Thanks to the increased use of electronic personal devices, items suchas power banks, selfie sticks and mobile stands remain popular.

The findings came from a survey of 922 exhibitors and buyers conducted during the27-30 April event. Overall, survey respondents expect a weak outlook for 2016, withinternational buyers seeing Asia – in particular, the Chinese mainland and Japan – astheir most promising markets over the next two years. In fact, the stronger yen hassupported the import demand, according to a number of Japanese buyers. Aside fromAsia, buyers also show considerable faith in the North American market.

In addition to the headline trends, a number of developments are seen as likely toreshape the market. Consumers have higher expectation on the product quality and areincreasingly concerned about aesthetics, price, materials and practicability of products.Compared with last year, buyers are more satisfied with Hong Kong giftware suppliers,especially in terms of innovation, product quality and compliance with safetyregulations/standards.

Asia the Bright Spot in Weak 2016 Outlook

Compared with last year, both buyers and exhibitors have less confidence in their salesoutlook. 71% of buyers and 66% of exhibitors expect their overall sales to increase ormaintain the same in 2016, compared with 88% and 78% respectively last year.

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The majority (95%) of exhibitors expect production or sourcing costs to increase ormaintain in 2016, but in general they anticipate no change in their FOB prices, alongside18% expecting an increase and another 18% anticipating a fall. Buyers, on the otherhand, anticipate higher sourcing costs in 2016, with 22% expecting an increase and 12%anticipating a drop. However, the margin of 10% is significantly narrower than last year’s51% (56% minus 5%), implying a significant easing of upward cost pressures. As such,the retail price of gifts and premium products is generally expected to go down in 2016,with 20% of buyers predicting a fall against 17% who anticipate a rise.

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With regard to market prospects over the next two years, buyers are most positive aboutAsia. The four most promising markets, in descending order, are the Chinese mainland(rated 3.49 on a scale of 1 to 5), Japan (3.33), other countries in Asia (3.27) and ASEANmembers (3.24). Asia aside, buyers have most faith in North America (3.23). Comparedto last year, however, buyers were less optimistic about most markets, with theexception of Japan, with buyers’ rating increasing from 3.26 to 3.33. According to anumber of Japanese buyers, only a stable and mild growth in the gifts and premiummarket is expected, but the stronger yen has boosted import demand. As to othermarkets, the ratings of a number of emerging countries and regions, namely India,Central and South America, Africa, Central and Eastern Europe and the Middle East, fellbelow 3 this year, signalling a rather negative view.

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Figurines and Decorations Hit Shelves

In terms of category-specific expectations, most respondents identified figurines anddecorations (13% of those surveyed) as offering the greatest growth potential in 2016.This is followed by tech gifts (12%) and fashion jewellery and accessories (10%).Figurines and decorations received much more attention compared with last year.According to a number of buyers, there is a growing market for high-quality, intricatelydetailed figurines and collectables based on characters from movies, comics and videogames. A number of Hong Kong companies are well-known in the global market formaking high-end, realistic figures. On the other hand, although tech gifts such as powerbanks, selfie sticks and mobile stands remain popular, promotional gifts and premiumssaw a decline in popularity to 10% in the 2016 Survey, from 17% last year.

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Higher Quality Expectation

Buyers were asked to rate, on a scale of 1 to 5, what they see as the major concerns ofconsumers in their markets, with 1 denoting “completely disagree” and 5 denoting“completely agree”. The results show that users of gift items are increasingly concernedabout the quality (4.14), aesthetic design (4.11), price (4.1), materials (4.1) andpracticability (4.08) of products.

Consumers in developed economies are seen as especially concerned about whetherproducts are environmentally-friendly. As a result, buyers are particularly interested ingift items made of natural and eco-friendly materials, while favouring simple but stylishpackaging that can reduce transportation and overall packaging costs. By comparison,the branding of products is now considered to be the least important aspect.

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As in other product sectors, consumers are seen as increasingly likely to shop online forgift items. According to the buyers surveyed, consumers now conduct more pricecomparisons (4.08) and increasingly rely on online reviews/social media for productinformation (4.03). Industry players should make better use of online and networkmarketing as the impact of recommendations and referrals through social media hasbeen proven significant, according to some respondents.

In 2016, 27% of respondents were engaged in e-tailing business, a rise from 23% lastyear. For those who have not engaged in e-tailing business, 10% said they planned tointroduce e-tailing within the next two years, compared with 12% last year. Overall, thetrend of going online is seen as rising in the gift and premium industry, but not veryrapidly.

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Among those who either engage in or are going to engage in e-tailing, the majority saidthey sell/will sell figurines and decorations (32%) through this platform, followed byfashion jewellery and accessories (17%), and promotional gifts and premiums (15%).Compared with last year, figurines and decorations saw a significant increase from 14%to 32%.

HKTDC Hong Kong Gifts & Premium Fair 2016: Buyers’ and Exhibitors’ Survey

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Hong Kong Suppliers Getting more Innovative

Hong Kong’s giftware suppliers are consistently rated highly by overseas buyers. On ascale ranging from “very unsatisfied” 1 to “very satisfied” 5, buyers give, on average,ratings between 3.74 and 4.04 in the nine areas of evaluation, up from the range of 3.58to 3.92 in the 2015 survey. In particular, buyers are most satisfied with Hong Kongsuppliers’ innovation (4.04), product quality (4.02) and compliance with safetyregulations/standards (4). Innovation is also the area which saw the biggestimprovement in the 2016 Survey, jumping from 3.8 to 4.04.

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Profile of Respondents

431 exhibitors – 42% from Hong Kong, 55% based in Asia (excluding Hong Kong),3% from the rest of the world.

491 buyers – major markets in Asia (60%), Europe (20%) and North America(14%).

The HKTDC Hong Kong Gifts & Premium Fair took place from 27-30 April 2016 at theHong Kong Convention and Exhibition Centre.

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