Prime Source Forum, the annual forum for the global apparel and footwear industries, took place from March 28-30, 2012, in Hong Kong. USA-ITA was proud to once again endorse the event.

From March 28-30, 2012, the global textile and apparel industry met in Hong Kong for Prime Source Forum, along with the leather and fashion trade fairs Materials, Manufacturing & Technology (MM&T) and Fashion Access, hosted by APLF/UBM Asia. 

With 300 delegates at Prime Source Forum and approximately 1,800 companies exhibiting, the Hong Kong Convention and Exhibition Center was truly a hub for the global industry.

Prime Source Forum is an opportunity for high-level apparel and footwear industry executives to discuss issues and challenges in the supply chain. The audience at the 2012 Prime Source Forum buzzed about two issues: the continuing importance of China even with higher costs, and the rumblings of opportunity to begin sourcing in Burma/Myanmar. Edwin Keh, former COO at Wal-Mart Asia and now a lecturer at the Wharton Business School, summed up the shift in supply chains. “The traveling circus that has crossed the globe looking for lower prices stops with China because of the volume and maturity of the industry, and because there is no next China,” he noted.

In his keynote presentation, Henry Tan, CEO and President of Luen Thai Holdings Ltd., offered insights into how one of the largest global players in the industry views today’s sourcing challenges. “Instead of searching for the next China, the important thing is collaboration,” he noted. “If there was better collaboration between ourselves and our customers, it may be easier to reduce the initial markup than trying to look for the last penny or the lowest-wage country.”

When it comes to low-wage countries for sourcing, the excitement at the Forum focused on the potential opening of the manufacturing opportunities in Burma/Myanmar. Even with the reports about the lack of infrastructure there, along with the extremely high cost of doing business, several companies are investigating and preparing for the day the sanctions are lifted.

USA-ITA President Julia K. Hughes moderated a session about the globalization of retail and its impact on the global supply chain. The speakers included Jeff Streader, Operating Partner and Advisor to the Source ASEAN Full-Service Alliance (SAFSA), a USA-ITA Associate Member; James Stafford, Head of European Market Development, RFID Adoption, Retail Branding, and Information Solutions for Avery Dennison; Damon Paling, Partner at PwC Shanghai, also a USA-ITA Associate Member; and Peter Kaminsky, formerly of The Children’s Place and now at Carter’s.

“Global sourcing has changed based upon the globalization of retail,” noted Jeff Streader. “And it going to change even more, and faster, as the BRICS accelerate, with China [for example] having over 120 cities of over 1m people, as we dive into the second and third tier,” he said. 

Prime Source Forum 2012

James Stafford of Avery Dennison speaks at Prime Source Forum.

According to James Stafford, “Going global is not necessarily cheaper or better—so you have to have a very efficient business, and run your business efficiently, to resist the cost pressures of going global. Going global as a retailer involves global sourcing, and that has its own challenges, as well.”

Damon Paling provided insightful information from PwC’s new benchmarking report on import operations and cross-border compliance, on topics including controlling the landed costs—which, in terms of customs duty and/or consumption tax, can account for up to 40 percent of the import value—as well as attaining operational excellence, overcoming market access barriers, and internal responsibility. The report is available here. He also discussed PwC’s Global Multi-Channel Retail Survey, which found that the online apparel market is the place to be in Asia (and especially China), and that there is plenty of room for growth in this market. He also provided tips for success in multi-channel retail, including providing a seamless shopping experience and secure and fast shopping platforms. The presentation is available here.

This year, Prime Source Forum also included footwear for the first time, with a lineup of footwear workshops and discussions. Matt Priest, President of the Footwear Distributors and Retailers of America (FDRA) and frequent speaker at USA-ITA events, participated in the forum, along with major footwear brands in the United States and worldwide. David Hampson, Country Manager of Nine West Footwear at USA-ITA member The Jones Group, agreed that sourcing executives will continue to rely on China. “For the next three years, the three most important countries for sourcing footwear for The Jones Group are, one, China, two, China, and three, China,” he said. “There is no need to go elsewhere. China still produces 84 percent of the world’s footwear by volume and 75 percent by value,” he added. “But China’s footwear industry now has opportunities to improve productivity and profitability, and it must realize that.”

Concurrently with Prime Source Forum, APLF hosted two exhibitions focusing on the international leather and fashion industries: MM&T (Materials Manufacturing & Technology) and Fashion Access. According to APLF, “MM&T is one of the most international leather fairs in the world, with 50 countries represented this year. The fair is where tanneries present their new leather collections to primarily the huge China and Asia-Pacific markets.” Meanwhile, Fashion Access provided attendees the opportunity to source fashion products from “head to toe,” including handbags, footwear, leather goods and apparel, travel goods, and more. 

For more photos, visit our Flickr album!