Macao’s Garment Industry - Branding to Survive

The Garment industry has been Macao’s main export industry, accounting for over 70% of the city’s total exports. The removal of the global quota on textiles last year has exposed the garment industry to international competition, in particular from countries with lower labour and land costs, such as India and Vietnam, so it was imperative for the garment industry to brand or transform in order to survive in the new environment.

Macao Needs Brands of Its Own

Talent is the key to transform the garment industry into an innovative one with its own brands. Over the last half a century of development, the sector has been dominated by small and medium-sized enterprises (SMEs). They have manufactured for overseas buyers and had rarely considered home grown brands. Victoria Kuan, Manager of the Apparel Technology Department of Macao Productivity and Technology Transfer Centre believes that Macao’s garment industry should utilise its over forty years of experience to create its own brands and use Macao’s strength as a platform to serve and communicate with clients so as to improve the industry’s competitiveness.“Macao needs to have something of its own.”

Macao Productivity and Technology Transfer Centre (CPTTM) was set up in 1996, the aim of its Apparel Technology Department is to“upgrade human resources and train talent”for Macao’s garment industry. One way to do this is to organise garment design training courses.

Ms. Kuan says the CPTTM has taken designers attending their training courses to Beijing, Hong Kong and some Japanese cities for fashion shows or fashion design contests in recent years so as to broaden their vision and to heighten the profile of Macao’s fashion design industry.

CPTTM set up Macao Fashion Designers Club in 1998 so as to attract the best design talent in Macao and has sent its members to the mainland for contests and courses and to promote Macao designs to domestic and foreign enterprises.“We should change from being Original Equipment Manufacture (OEM) to Original Design Manufacture (ODM).”She mentions most of their trainees work for local garment companies or create their own brands.

CPTTM Spares No Effort in Train Talent

In order to catch up with global fashion trends, CPTTM organises seminars or new courses all the time. There are lots of books and magazines about overseas fashion design available at the small library in the Apparel Technology Department. Every year CPTTM spends US$10,000 to buy books and magazines to expose the trainees to the latest information and new trends in the fashion world.

Thanks to the development of the gaming and hotel industries, garment factories in Macao have received many orders from companies for uniforms, so CPTTM’s courses this year are focused on how to design such garments. Environmentally-friendly clothing is in vogue now and is another part of the course. Constant improvement in the courses will enable the trainees to keep up with the times.

Local garment companies and factories have sent their staff to CPTTM to learn how to design, draw and choose fabric so that when they return, they can communicate better with the designers. From 2003, with support from the Education and Youth Affairs Bureau, CPTTM launched cooperative courses with middle schools teaching basic sewing, how to choose fabric and to design clothes. During weekends and the summer holiday, CPTTM organises part-time courses for students so as to expand their knowledge and techniques of garment design and manufacturing.

Have local designers become better designers thanks to CPTTM’s 10-yearlong training effort? Ms. Kuan is of the opinion they have made rapid progress as some of them have won prizes at fashion design contests on the mainland. Some of them even quit their jobs and leave for France to further their studies.

What advantage do local designers have? Ms. Kuan says,“Macao’s designers have a strong sense of history. Macao is a world cultural heritage city. The sharp contrast between ancient architecture and modern hotels and casinos gives designers inspiration.”With such inspiration, fashion designers can come up with good products.

Launch of New Brands Attracts New Customers

Although textiles and garments account for about 75% of Macao’s total exports, it is still imperative to find a new strategy to adapt to the changing competition environment.

Chairman Dasiy Chao and Manager Jason Lei of Macao Heng Pou Garment Factory Co. Ltd. are among those actively looking for a new way forward.

Ms. Chao’s background is in trade and she joined the garment industry less than five years ago, but Jason Lei has been working in the industry for close to twenty years. They both run Kam Fu Garment Factory established in October 2004 and Heng Pou Garment Factory opened in February 2006 to expand production. Both of the factories manufacture and process underpants and jeans and employ about 20 people.

Ms. Chao recognises the difficulties and the competition from neighbouring regions that Macao’s garment industry faces after the removal of the global textile quota. How can the garment industry adapt to the new situation and find new business opportunities?

To create its own brand may be the way forward for Macao’s garment industry, so Mr. Lei has begun to design underpants himself and has applied for a trademark, hoping to introduce their design to the American market and find new customers. He has finished a threeyear fashion design course at CPTTM, has taken some other relevant courses, and has worked in the garment industry since graduation. His grasp of design knowledge and years of practical experience has helped him a lot in launching his own brand.

It took Mr. Lei six months to prepare and apply for the brand“V and Jason”. He chose the American market because it is huge. The approval process will take eight months, so the results will not be known until the middle of next year. During this period he hopes to have finished his designs and opened marketing channels ready for the launch of the brand and he will then invest a further MOP100,000 in the project.

Government Assists SMEs

Lack of capital is a big problem faced by SMEs. Mr. Lei says the most difficult thing for SMEs when trying to develop their brands overseas is lack of capital for advertising and publicity.

The SAR government considered this when they released the new support schemes for SMEs at the end of October and has begun to receive applications. The scheme is to provide funding for SMEs. The fund ceiling has been raised from MOP100,000 to MOP300,000 and the repayment terms extended from six to eight years. The qualification criteria for applying have been relaxed. As a result, companies in operation for two years can apply, over 10,000 companies qualify in Macao. Mr. Lei says that Kam Fu Garment Factory is one of those qualified, so he has collected the necessary forms and is considering whether to apply.

Macao’s garment industry is in transition. The SAR government is improving the business environment for SMEs, including garment factories. For example, the Zhuhai-Macao Cross Border Industrial Zone began trial operations in October and will provides twenty-four hour customs services to facilitate the development of industries such as logistics. CPTTM is acting as an intermediary, training talent and passing on new concepts and approaches. Some garment factories in Macao are taking the first step to shift towards ODM, which will inject new dynamism into the traditional garment industry.

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