EXPORT TO CANADA APPAREL SEMINAR Jakarta- March 13 2019 The - - PowerPoint PPT Presentation

EXPORT TO CANADA APPAREL SEMINAR

Jakarta- March 13 2019

The Canadian Market

35.8

Million people

9.98

Million Sq.Km

Canadian Dollar

Canadian Cultural Diversity

• 1 in 7 Canadians are senior

citizens (age 65+)

• Baby boomers (born 1946 to

1965) dominate the Canadian market

Source: Statistics Canada, Census (2011) Source: Globe & Mail (2012)

5

Ageing Population

Top Country Suppliers

Source: Canadian International Development Platform

Canadian Imports from Indonesia by Product

Source: Statistics Canada

Source: Trendex – Canadian Retail Apparel Market

Canadian Apparel Market by Segments

Canadian Apparel Trade (imports & exports)

Source: Canadian International Development Platform

Source: Canadian International Development Platform

Canadian Apparel-Top Suppliers

(country supplier market share %)

Source: Trendex – Canadian Retail Apparel Market

Canadian Apparel Market Sales by Market

Segments

Source: Trendex – Canadian Retail Apparel Market

Canadian Women Apparel Market

Source: Trendex – Canadian Retail Apparel Market

Canadian Men Apparel Market

Apparel Market Trends

Increasingly multicultural Tech-savvy, purchase over internet/mobile Regional differences Health, socially and environmentally aware Well informed but demanding Affluent but price conscious Home owner Double income (although many single parent homes)

15

Source: TFO Canada Market Information Papers

Canadian Consumers

Canadian Consumers

In 2016 Canadian consumers spent on average approx. 62 thousand $CAD on goods and services per household. However

• nly 5% of these expenditures, or 3.1 thousand $CAD, was spent on

clothing and accessories. This is almost 300 $CAD less than the previous year, although the overall annual expenditure per person increased by almost 2 thousand $CAD. Canadian consumers can be divided into three main age groups: 1) Millennials (aged 20-39) represent 27% of the population or almost 10 million Canadians. In terms of consumption, they are mostly focused on price, fashion trends and convenience. 2) Baby-boomers (aged 40-64) constitute 35% of the Canadian population or 12 million people. This is the wealthiest group of Canadian

• consumers. Thus, they are concerned about quality and interested in niche

products. 3) Seniors (aged 65 and above) currently represent 17% of the population

• r almost 6 million people and their share is steadily increasing due to the

aging of the Canadian population. Unlike in Ukraine this group of consumers in Canada is not so price-sensitive. They are primarily interested in such features of the product as comfort, ease-of-use and safety. Source: Statistics Canada

Source: Trendex – Canadian Retail Apparel Market

Growth of Ecommerce

The five recent consumer trends on the Canadian market are:

• The buy-local movement: Consumers are shopping close to home,

looking for locally made goods and aware that buying Canadian-made may be a better ethical and environmental choice.

• Rising health awareness: The aging population is becoming more aware
• f healthy choices in food, cosmetics and ergonomically designed
• products. Half of Canadians consider the health impact of a product when

making purchasing decisions and one-third are willing to pay a premium for healthy products.

• Frugality: Canadian incomes are stagnant and debt is high, meaning

consumers are cautious about spending. As the baby boomers retire, an increasing portion of the population will be living on fixed incomes.

• The desire for customized goods: Consumers are looking to get exactly

what they want and new technology makes it possible for them to buy it.

• The impact of the internet: An increasing amount of research about

products is done online, even when consumers do not buy online. At the same time, online shopping is growing and online reviews are critical.

Consumers Trends

Source: Trendex – Canadian Retail Apparel Market

Canadian Apparel Market Trends

Top Ten Retailers

Labeling Requirements& Sizes

Incoterms

Export Price List Preparation

Everyone knows the traditional maxim for setting prices in the fashion industry: double the cost for the wholesale price, and multiply the wholesale price by 2.0 to 2.5 for the retail price. However, for new brands, this exercise can be frustrating because its difficult to get good cost estimates early in the process. That’s why for new brands we recommend working backwards. Instead of starting with target cost, start with target retail price. It’s easier, faster, and will help you make better decisions. Let’s say you wanted start a line of casual button-up shirts, similar to a $125 BOSS shirt from Nordstrom’s. To get the estimated cost, we divide $125 by 2.5 (retail mark-up) for the estimated wholesale price of $50, and then divide $50 by 2 (wholesale mark-up) to arrive at the estimated target cost of $25, inclusive of import duties and logistics costs.

MARKUP MULTIPLIER EXPORT TO CANADA REVISED Sales through a broker to retail Item Calc. $ Retail Price $50.00 Retailers markup 3.03 $33.50 = Price to retailer $16.50 Trader markup 1 $0.00 = Price to Trader $16.50 Minimum Producers markup 1.2 $2.75 = Maximum cost $13.75

What Influences a Retailer? Rating out

• f 10

Excellent profit margin 8.6 Exclusivity in my area 8.2 Previous sales success 8.1 Availability 8.1 Cost 8.0 Design 7.9 Supplier's reputation 7.9 Good suggested retail price point 7.8

Digital presence

Negotiations Skills

Best Business Practices

• Be punctual for meetings and appointments, as promptness is valued.
• If you do give a gift when you arrive or when you are leaving, make it a

modest one. A lavish gift, though accepted, would be frowned upon.

• Don't be boastful, and don't overstate your product or service's
• capabilities. You could implicate your company in a legal situation.
• Toolbox:
• Business cards
• Email address
• Website
• Videos
• Testimonials
• Price List
• Respond to email same day.

Logistics

Logistics Checklist

• Establishing a relationship with a good freight forwarder is key to building

your business.

• Learning INCO terms is critical to your business. Incoterms are crucial to

the way you quote your prices for delivery.

• Your bank is a good source of advice.
• Keep abreast of the range of logistics options that is now available.
• Become familiar with shipping times, routes and modes so you can offer

your buyer a range of options.

• Precise documentation is critical.

Challenges Success Stories and Lessons

Identified Gaps

• Lack of knowledge on the Canadian market: Two of the companies indeed had products

placed in the Canadian market and they even did had some knowledge of this. For the size of the targeted SMEs what seemed to be standard practice was that intermediary agents contracted production with their specific requirements and for all practical purposes the transaction ended up being a local sale. For this reason, the companies were not aware about Canada’s regulations and standards, distribution channels, import process, etc.

• Lack of production capacity to export: The vast majority of the production is destined to the

local markets, and there is not production capacity for export.

• Export experience: Due to the “agent-export-model” there was no export experience or

knowledge from the SMEs.

• Language Barrier: Only 2 or 3 companies had competency to transact with a Canadian buyer

in the English language.

• Product’s quality: Since the local market demands product with great durability, the SMEs

were proud of the “good quality” in their garments. However, this is not necessarily the only attribute a Canadian buyer might be considering; other attributes are also very important such as price and capacity for timely deliveries. The SME’s need to work on export price list to adjust their prices for the Canadian market, as well as understand the delivery times to reach North America.

• Certifications and labeling not present: The local market does not require certifications and

labeling is rarely present. The Canadian market is one of the most demanding markets in the

• world. Proper labels in French and English and meeting expected specifications are required to

enter the market.

• Marketing:

Of all interviewed companies didn’t have marketing material in English.

• Negotiation skills: Lack of negotiation skills

Summary of Impact

UNIQUE DEKATAMA CENTRA KNK

Design of a new collection “Cotton Flair” (2018) that is more suited for the North American market Provide more products that can compete in the North American market Presentation of “Atmosphere” brand in Canada Provide products that can compete in the North American market

BULE BULE TIGA SELERAS BERSAMA SAKURA

Provide more products that can compete in the North American market. Adequate their products. Provide more products that can compete in the North American market Provide more products that can compete in the North American market

Pictures: Before Unique/Cotton Flair

After: Unique/Cotton Flair

Before: Bule-Bule

After: Bule-Bule

KNK

4/2/2019

Indonesian Apparel Companies

48

TIGA

Success Story

• PRODUCT ADAPTATION:
• COTTON FLAIR
• UNIQUE developed a new product line for the Canadian market: Cotton
• Flair. It takes in to consideration Canadian woman taste, both in material

composition and design.

• All of this was achieved through product development workshops, one on
• ne training on site, skype calls, first hand onsite market experience, trade

show participation and continuing follow-up on activities and working with the design team.

Success Story

• FROM LOCAL PRODUCER TO GLOBAL SUPPLIER
• BULE BULE an Indonesian women-led SME producing cutting edge

designs utilizing recycled fabrics based in Solo, has undergone an important transformation from a local producer to a global e-commerce player.

• This has come after following a rigorous two years program with expert

training in product sizing, presentation, company positioning and communication, market adaptation, and coaching for effective trade show

• participation. TPSA sponsored a buyer’s mission in November 2018 where

the luxury Resort-wear brand – Indigo Paisley – connected with the company to embark on a global supply program.

• With beautifully designed timeless pieces made from natural fabrics, Indigo

Paisley is a brand created to celebrate women.

Lessons Learned

• Language and cultural differences are still a barrier.
• The challenges the Indonesian companies have to face working directly with

international buyers still overwhelm all of them. We have to be aware that this is the first time they are working directly with western buyer without

• agents. For this reason, the companies will continue to need extended

follow-up.

• All SME’s were exposed to very Important Canadian Buyers. The doors to

enter the Canadian Market were opened through the project. They are ready to present ALL the marketing material nee it for a direct presentation

• f their companies and their capabilities in ENGLISH (website, look books,

catalogues, export price list, business cards). They also know how to prepared FOB price list, how to interact by email with potential buyers, how to send samples and orders on time. They had participated in North American Trade Shows been able to learn from competitors around the world and to present their strengths and work on their weaknesses.

Final Tips

Thank You!