Editor’s Note | | Transformation and Innovation of Traditional Industries Internationally Renowned Retail Brand Settled in Macao Thanks to the Industrial Revolution, textile manufacturing transformed from the household workshops into a highly mechanised industry in the 18th century, marking the beginning of an era of the modern textile industry. Since then, the global textile industry has undergone six rounds of migrations, which have significantly influenced the textile industry in Macao. Affected by the international trade environment in the 1960s, a number of Hong Kong textile manufacturers moved their factories to Macao, thereby transferring the British and American orders to the city. Then Macao started to export textiles and garments to the European and American markets. In the 1970s, Macao became a member of the Multi Fibre Arrangement (MFA), so its textile and garment exports were protected by this quota scheme. Stimulated by the demands from European and American markets in the 1980s, Macao’s textile industry reached an unprecedented prosperity. As the global textile quota system was abolished in 2005, local textile and garment industries started to transform from production to design. To this end, many public institutions in Macao launched a series of measures to support this transformation. For instance, Macau Productivity and Technology Transfer Centre (CPTTM) has established the Fashion & Image Committee to provide professional advice on fashion-related projects and has provided diploma courses to cultivate local design talents. Macao Trade and Investment Promotion Institute (IPIM) has also launched display platforms for local designs by organising fashion shows during exhibitions. In fact, some local design brands have already made use of the e-commerce platforms and social media as the channels to promote their products in the mainland market, with the models of “self-created brands” and “joint-created brands”. | |
| | | In order to allow investors to further understand the industry trends, in this issue, the representative from Macao Textile Merchants Association was invited to share with us the development of the local textile and garment industries. At present, some niche fashion brands from Southeast Asia have gradually emerged in the international market. Since Macao has maintained close economic and trade ties with Southeast Asian countries, the local fashion industry is expected to invite Southeast Asian designers to use the Macao platform for promotion, creating synergy with Macao fashion brands by following the fashion trends of technology and environmental protection. In fact, another local company that obtained the operating rights of a renowned French retail brand has followed the same strategy. Settled in Macao through IPIM’s One-Stop Service for Investors and the Investment Committee mechanism, the company has already started its operation with the market positioning as a “New Landmark of Art”. | |
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Industry Topic | | Linking Resources from All Over the World The value chain of the textile industry starts with the raw materials, namely cotton and petrochemical products, which will be made into nylon fibre, polyester fibre, carbon fibre and other man-made fibre products. Then they will be converted into yarn and fabricated into cloth, which is bleached, dyed, printed, coated, and finished. After that, the cloth will be converted into useful goods such as clothing or other textile items. Along with the changes in economic development, labour costs and trade environment, the global textile industry has experienced six rounds of migrations, namely from the United Kingdom to the United States, from the US to Japan, from Japan to South Korea, from South Korea to Hong Kong, from Hong Kong to mainland China, and from China to Southeast Asia. Investors in this industry not only need to stay tuned to the impact of international climate changes on cotton production and the impact of international crude oil prices on petrochemical products, but also need to pay attention to the strategic plans implemented by international institutions on the textile industry. For example, the Green Guide (Expanded Edition) from the US Federal Trade Commission, the Extended Producer Responsibility (EPR) programme from the European Union, and the enactment of many state-level legislations on textile waste have significant impacts on the production and procurement of the textile products. According to the Fashion Industry Benchmarking Study conducted by the United States Fashion Industry Association (USFIA), nearly 40% of the American fashion companies have made their plans to purchase clothes from different markets and co-operate with different suppliers. | |
| | | According to the statistics from the General Administration of Customs on 12 January 2024, China’s textile and garment exports in 2023 reached US$293.64 billion. Currently, China’s textile exports to major markets such as the United States and ASEAN countries are relatively stable. Among them, the growth rate of textile and garment exports to the United States has maintained a positive growth of over 5% for three consecutive months; the decline in exports to ASEAN countries in the first 11 months of last year narrowed by over 10 percent compared to that in January to October. The diversified international market structure is gradually accelerating, and the proportion of China’s textile annual export volume has accounted for over 50% of the total export volumes to the “Belt and Road” countries. In fact, China’s textile industry has a complete supply chain. Even those enterprises that have moved to Southeast Asian countries still maintain a close relationship with the supply chain in China. In recent years, Vietnam has become one of the major countries undertaking the transfer of China’s textile factories. Currently, Vietnam has participated in and is negotiating 19 free trade agreements (Sixteen agreements have been signed and implemented, and three agreements are under negotiation). Vietnam is the only country that has signed free trade agreements with all major economies in the world (China, the European Union, Japan, Russia the United Kingdom and the United States, ). For investors, such agreements are very important for their strategic planning, as they can meet the requirements of most countries and regions for the textile industry, and promote the trade activities and business matching. #global textile migration #cotton production #international crude oil price #petrochemical products #China textile and garment export #textile industry supply chain #Vietnam’s free trade agreement Data source: China Chamber of Commerce for Import and Export of Textiles |
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| Macao Textile and Garment Industries: From Production to Design The textile and garment industries emerged in Macao after World War II and recorded a rapid development in the 1960s. In 1963, the United Kingdom took the lead in restricting the textile and garment imports from Hong Kong, setting a precedent example for European and Northern American countries to impose trade restrictions on these products from Hong Kong. Hence, a number of Hong Kong textile manufacturers moved their factories to Macao, transferring the British and American orders to the city. Then Macao started to export textile and garment products to the European and American markets. In 1974, 41 countries and regions around the world signed the Multi Fibre Arrangement (MFA), imposing quotas on the amount of textiles and garments that could be exported to the developed countries. Based on its relationship with Portugal, Macao became a member of the MFA, so its textile and garment exports were protected by this quota scheme. In the 1980s, the economic recovery of the United States stimulated the European market which then pushed Macao’s textile and garment industries to achieve unprecedented success. It also laid a solid foundation for Macao to maintain a very close relationship with Europe and the United States in the textile industry. In the 1990s, a considerable number of Macao textile producers moved their factories or part of their processing processes to mainland China (mainly Zhongshan and Zhuhai ), forming a “dual-factory” model. That is, the parent factory, headquartered in Macao, was responsible for taking orders, purchasing raw materials, product promotion, decision making, and sewing, while the subsidiary factory in mainland China was responsible for the production and processing tasks. Under the WTO’s Agreement on Textiles and Clothing (ATC), the global textile quota system was abolished in 2005. Hence, Macao’s textile industry lost its advantages regarding its textile quota. Then the industry had to find a new way from its original reliance on the quota system. From Figure 1, we can see that, from 2019 to 2023, the import volumes of garment and clothing accessories in Macao were higher than the export volume. Among them, the import volumes recorded significant growth, while the export volumes developed in a relatively steady way. That is, nowadays, Macao’s textile and garment market is featured with the consumption-orientated characteristics. From Figure 2, we can see that, the top five countries/regions in terms of import volume of garment and clothing accessories in 2023 are Italy, mainland China, France, Thailand and the United Kingdom respectively. That is, at present, apart from mainland China and Thailand, the source countries of Macao’s textile and garment imports are mainly European countries with relatively advanced fashion industries. From Figure 3, we can see that, the top five countries/regions in terms of export volume of garment and clothing accessories in 2023 are Hong Kong SAR, the United States, mainland China, Italy and the Netherlands respectively. That is, the export market of Macao’s textile industry is mainly affected by the geographic and industrial structure. To respond to this situation, the Macao SAR government launched the “Tax Incentives within the Scope of Industrial Policy” and the “Subsidy Scheme for Encouraging Enterprise Upgrading and Development”, aiming to provide tax incentives to investors who intend to contribute to the local industrial development, and to encourage enterprises to realise their transformation. |
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(Data Source: DSEC) Note: The data is the sum of the import and export volume of “Knitted or Crocheted Garment and Clothing Accessories” and “Non-knitted or Non-crocheted Garment and Clothing Accessories” from 2019 to 2023.
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(Data Source: DSEC)
Note: The data is the sum of the import volume of “Knitted or Crocheted Garment and Clothing Accessories” and “Non-knitted or Non-crocheted Garment and Clothing Accessories” in 2023. |
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(Data Source: DSEC)
Note: The data is the sum of the export volume of “Knitted or Crocheted Garment and Clothing Accessories” and “Non-knitted or Non-crocheted Garment and Clothing Accessories” in 2023. The textile and garment industries in Macao are transforming from production to design. Macau Productivity and Technology Transfer Centre (CPTTM) has established the Fashion & Image Committee to provide professional advice on fashion design-related projects in Macao in order to improve the level of local fashion and image design. In addition, CPTTM launched a new “Diploma Programme in Fashion Design and Manufacturing” in March 2024, which allows the students to learn the professional knowledge of clothing design and production technology, the application of clothing design software, and the entrepreneurship and marketing skills. Before the end of the course, the students will have the opportunities to design and produce their fashions under the guidance of professional instructors. They can also participate in the graduation fashion show, allowing them to put into practice what they have learnt in the course. It is worth mentioning that IPIM and CPTTM will jointly organise the “Macau Fashion Festival” at the “Macao International Trade and Investment Fair” (MIF) to strengthen the regional co-operation in the fashion industry and to lift Macao’s fashion design to a new level. |
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Cultural Affairs Bureau of the Macao SAR Government and CPTTM jointly established the “MACAO FASHION GALLERY” in July 2012 to promote the development of Macao’s fashion art and related cultural and creative industries.
(Source of Pictures: CPTTM) |
#Development of Macao textile industry #Hong Kong manufacturers set up textile factories in Macao #Macao’s textile industry reached unprecedented prosperity #MFA agreement in 1974 and the global textile quota system was abolished in 2005 #Macao textile industry moved to the mainland #“Dual-factory” model |
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| Achieving Innovative Development by Following Fashion Trends of Technology and Environmental Protection In this issue, Vice President of the Macao Textile Merchants Association Porson Chung, was invited to share some information about the development and opportunities of Macao’s textile industry. Based on this interview, the textile industry trends are also analysed and summarised. |
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“Macao’s textile industry is transforming from production-orientated to design-orientated.” “In the era of the digital economy, artificial intelligence (AI) has become an important tool for production.” “Local industry can invite Southeast Asian clothing designers to use the Macao platform for promotion, and to create synergy with Macao’s clothing brands.” As the global textile industry is partially migrating from China to Southeast Asia, some Macao enterprises that adopt the “dual-factory” model, have set up processing and production factories in the countries such as and Cambodia, Myanmar and Vietnam,, by making use of their close economic and trade ties with these countries. In the past, the textile and garment companies in Macao were mainly offering OEM (Original Equipment Manufacturer) services, that is, producing according to the customers’ requirements. But now, Macao’s textile industry is transforming from production-orientated to design-orientated, and local textile and garment enterprises have also extended their services to ODM (Original Design Manufacturer). That is, they are in charge of not only the entire producing process, but also designing and developing products according to customers’ requirements. The difference between OEM and ODM is that the former focuses on production, while the latter focuses on design and development. In the era of the digital economy, artificial intelligence (AI) has become an important tool for production. AI users only need to input their thoughts in text, then AI can convert the text into design drawings by using the algorithms. It not only improves the efficiency of the ODM services, but also provides customers with more choices. In addition, since the sustainable development has become one of the fashion trends, young consumers are more and more in favour of the clothes that are made of recycled fabrics, which has attracted more attention from the fashion designers. |
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At present, Macao is transforming from a “Small Cultural City” to a “City of Performing Arts”, with many cultural and tourism events hosted every year (such as the film and music awards ceremony), which may provide local fashion designers with a platform to showcase their works. In fact, some niche fashion brands from Southeast Asia have gradually emerged in the international market. Since Macao has maintained close economic and trade ties with Southeast Asian countries, the local industry is expected to invite Southeast Asian fashion designers to use the Macao platform for promotion, and to create synergy with Macao clothing brands. #Macao clothing transforms from production to design #AI-based Production #From a Small Cultural City to a City of Performing Arts |
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| Invest in Macao | In line with its positioning as the “World Centre of Tourism and Leisure”, the Macao SAR Government is committed to building Macao into a “City of Performing Arts”, to attract a large number of tourists to the city. During the first three days of the mainland’s Golden Week holiday (10 to 12 February) of this Chinese New Year, the average daily number of visitors to Macao reached 167,000. While the visitors on 12 February (the third day of the Lunar New Year) exceeded 210,000. Obviously, there is huge potential in the consumer market in the city. |
| | Relying on its experiences in distributing fashion and trendy brands in Greater China, Forward Fashion Holdings, a fashion company listed on the Hong Kong Stock Exchange, successfully obtained the operating rights of Galeries Lafayette in Macao. After that, the company has officially settled in Macao through IPIM’s One-Stop Service for Investors and the Investment Committee mechanism, including preliminary consultation, participation in local job fairs held by the Labour Affairs Bureau, and registration for the licences from the Municipal Affairs Bureau. Macao Galeries Lafayette, positioned as a New Landmark of Art, officially opened to the public on 26 January 2024. With an area of 35,000 square feet, the store has brought more than 100 internationally renowned fashion brands to Macao. |
| | #Huge potential in the consumer market in Macao #One-Stop Service for Investors and the Investment Committee mechanism |
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Business Tips | | Exploring Innovative Intersectoral Fashion Value from Traditional Culture Integrating fashion trends with traditional culture is one of the important contemporary business models. Along with the accelerated globalisation process, the exchanges and interactions between different cultures have become increasingly frequent, which has made the traditional culture a source of inspiration for the fashion design. Young people who have grown up in wealthy families are more apt to pursue unique personality and style in fashion. Hence, they are more focused on spiritual self-confidence and satisfaction. This new trend promotes the rediscovery, reunderstanding, redesign, and redissemination of the traditional national culture, making the traditional culture a fashion trend. At the same time, the information dissemination on the internet, circled social networking, and online marketing have played strong roles in promoting cultural IPs, hot spots, and internet influencers. It can be seen that the traditional culture can help increase the commercial value of fashion trends. | |
| | | In fact, as a bridge between Chinese and Western cultures, Macao has certain competitive advantages in its distinctive designs. Macao’s location in the core area of the Guangdong-Hong Kong-Macao Greater Bay Area also helps promote local brands to mainland China. SEMSORRISO, a Macao-rooted fashion brand established in 2021, is committed to the innovative development of the traditional culture. Featured with three keywords, namely Unique, Explore, and Responsibility as its core values, the brand is headquartered in Macao and operates in Guangzhou and Foshan, bringing about a new way of developing the traditional culture. The company has two development models: “self-created brands” and “joint-created brands”. At present, the company has completed its self-created brands and is taking joint-created brands as the core strategy of its brand development. Through the co-creation with the traditional culture and the co-operation with other brands, the company will have more opportunities and stronger vitality in the development of its own brands later. The company has made use of the e-commerce platforms and social media as the sales and promotion channels. While the brand value is added through sharing brand stories with consumers and conducting brand activities. At the same time, some promotions are also launched to allow more consumers to access and purchase their products. | |
| | | #Traditional culture helps increase the value of fashion trends # From self-created brands to joint-created brands | |
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Sino-Portuguese Business Opportunities | | Linking Resources from All Over the World Portugal’s textile industry is renowned for its high-quality clothing fabrics and specialised household craftsmanship. When participating in international exhibitions, companies from the Portuguese textile and garment associations will jointly use the brand “From Portugal” to show the professionalism of their products by creating a brand-like national image. According to the data from the Portuguese Textile and Garment Association (Associação Têxtil e Vestuário de Portugal, ATP), the products of Portugal’s textile industry exported in 2023 were mainly knitted garments, which were mainly exported to France, Germany, Italy and Spain,. Hence, it can be said that the Portuguese textile industry is an important part of the European fashion industry. At the same time, Portuguese textile companies are also optimistic about the Chinese market. For example, Abyss & Habidecor, a high-end brand specialising in the production of bath towels and bathrobes, has established itself in China and Macao for many years. The brand has several boutiques in popular shopping malls in major cities in China. In addition, the “China and Portugal Textile Industry Co-operation Training Course” was organised by the Ministry of Commerce in mainland China in May 2023, the representatives from Portugal held discussions with Chinese government departments and actively attended industry matching meetings. Both sides expressed their hope of promoting practical co-operation in bilateral trade, two-way investment, and people-to-people and cultural exchanges, and to jointly strengthen the textile industry by extending their value chain. | |
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| Announcement of Trade Fairs and Conventions |
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Macao Trade and Investment Promotion Institute Address: 1/F and 2/F of the office building of the Complex of Commerce and Trade Co-operation Platform for China and Portuguese-speaking Countries in Rua Sul de Entre Lagos, Macao Website: https://www.ipim.gov.mo E-mail: ipim@ipim.gov.mo Tele: (853) 2871 0300 Fax: (853) 2859 0309 © copyright 2023 IPIM.All rights reserved (Disclaimer) If you want to stop receiving these emails, please click here to unsubscribe. |
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