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Playing the retail game
( 2003-08-18 10:29) (eastsay.com)

Hong Kong retailers are setting up shops in Shanghai faster than you can whip out a credit card. Reporter Zhao Feifei talks with two business owners who have an eye on the big picture.

A decade ago, people visiting Europe, the United States, or even Hong Kong often moaned about the chore of carrying suitcases full of clothes with world famous designer labels back for family and friends.

Times have changed.

Designer shops pop up in town faster than trends come and go. Shopping in Shanghai -- no longer a scavenger hunt to find just the necessities -- is an experience.

The glitzy malls of Nanjing and Huaihai roads, and Xujiahui area are sprinkled with numerous boutiques run by Hong Kong-based distributors or wholesalers, who are focusing their eyes on Shanghai -- an emerging fashion center -- and dream of making big bucks.

While most upmarket fashion boutiques rely on adult ready-to-wear clothing, high-quality children's apparel faces less competition.

``Well-heeled parents never skimp when it comes to pampering their kids.'' says Ada Sing Kwun-Yim of ABEBI, the only boutique devoted to children's clothing in the Plaza 66 shopping mecca.

ABEBI carries 15 designer labels such as D&G, Kenzo, DKNY and Versace with a wide range of products serving children from newborns to the 12-year-old. In terms of variety and quality, it stands in a class of its own.

``Hong Kong is a physically small market,'' says Sing, talking about the local store that opened earlier this year.

``The Chinese mainland market has more potential. We hope we get in on the act just in time. We did some research in the city's heartland shopping malls and found the local high-end children's clothes market is not in full swing which leaves us plenty of leeway to play.''

The five Hong Kong stores she owns are all doing well. Thanks can partially be attributed to her husband Gordon Butt Sze-Hoi, a former stockbroker. Tired of the buy-low-and-sell-high game, Butt made a small investment in distributing European clothes with his wife 10 years ago. In the beginning they focused on communicating with customers.

``Children's wear is more complicated than adults' wear,'' Sing explains. ``Not like adults' wear that usually has three sizes, children's wear run a wide range of sizes and colors. But only a small part of them sell well. So we have to keep track of the flow of the products and make immediate adjustments.''

In the first three years of business, the couple personally served customers. It helped them gather valuable firsthand information about their needs.

Butt's business acumen compliments Sing's exceptional fashion sense.

``There has never been a dull moment in dealing with children's fashion,'' says Sing, the mother of two children. ``Those little dresses and pants are so cute. I enjoy the six buying trips annually. I love to dress up my own kids too and sometimes it's fun to dress kids like adults.''

Sing says they may franchise ABEBI to interested partners in Beijing and Hangzhou once the business in Shanghai gets off the ground. Just as they named their shops -- ``ABEBI,'' Nigerian meaning ``We asked for her and we got her,'' Sing molded her store into a multiple brand hunting-ground for affluent mollycoddling parents.

Another Hong Kong retailer doing big things in Shanghai is Alan Cheung Kwok-Lun. He's called the city home for six years and even speaks Shanghainese. He opened Sport 100, a superstore carrying more than a dozen international sporting goods brands including mountain-climbing gear supplier Marmot.

``Hong Kong is a duty free port, and import and export license requirements are kept to a minimum,'' says the British-educated Hong Kong native. ``It's true that many people dive into the business of clothing distribution because it's easy in theory. Someone likens it to selling tea eggs: You buy fresh eggs and boil them in tea and soy sauce. And then it's done. It's a game open to any interested player. But only a few can excel and make money.''

Cheung gives a rundown of several Hong Kong success stories in the local clothing business: Goldlion ties and shirts, Giordano casual wear and Esprit apparel and accessories.

With 12 years expertise in fast-moving consumer goods and 10 years experience in the distribution of international fashion brands on the Chinese mainland, Cheung has completed his distribution network step by step. Now there are 13 Sport 100 stores around the country, with a total asset value reaching 60 million yuan (US$7.3 million). The design of the store -- occupying the whole fourth floor of Lane Crawford -- reflects his yearning to build a strong image: a circular running track connecting stores carrying different brands, a DJ booth spins current music and an interactive basketball court catches and keeps the attention of shoppers.

``This is a stressful business,'' he says. ``I work from 8 am to 9 pm. However, I feel content because I love sports and I love to do something related to it.''

Big challenges are facing the sporting goods industry. Everything varying from shifts in consumer purchasing patterns and the shifting desires of the younger generation, to technological advances and even changes to the industry's retail sector.

Cheung says outdoor extreme sports are booming worldwide. For example, hiking has become a fashionable sport for the young and restless in recent years fuelling the upward sales of rough terrain footwear.

But the Chinese mainland market hasn't kept pace. He says shoppers here are only interested in a small range of sports such as soccer and basketball.

He managed to crack the high-end sports user's market and deepen the market penetration in the Chinese mainland with a mixture of some casual wear brands, which helped him uphold the identity of Sport 100 while expanding the customer base. After that he mounted a national expansion drive for his sports store and hopes to have 100 outlets ringing up sales before the 2008 Olympic Games in Beijing.

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