St. Patrick's day decorations

	This snowman from Meizhou Angel features 30 LEDs. It is made of iron and fiber-optic glass.

Makers of Christmas trees and ornaments foresee exports rising by up to 20 percent as customer queries increase.

The majority of China makers of holiday and party decorations are anticipating market recovery in the next six to 12 months.

In the Christmas trees and ornaments segment, almost three-fourths of the suppliers interviewed foresee shipments rising by 10 to 20 percent from 2008 levels. Last year’s 568,000kg reflect a nearly 7 percent YoY decline in export volume.

Such optimistic projections are underpinned by seemingly reviving interest in the line. “Compared with 2008, inquiries have increased by 20 to 30 percent,” said Xuhong Gu, sales manager of Dalian Overseas Industry Co. Ltd. The supplier specializes in Christmas trees and ornaments.

Similarly, the Christmas lights sector, which in 2008 saw annual export volume decrease from 498,000 to 385,000 pieces or by more than one-fifth, is expected to stabilize. This comes as most companies in the line have already established ways to counter the effects of the gloomy economic conditions.

But while the business outlook in the aforementioned product categories have brightened, forecasts for other holiday and party supplies remain hazy.

Manufacturers of Christmas, Halloween and Easter costumes, for example, are concerned that demand will continue to weaken. Many companies have reported cutting at least one-third of their production of such

The number of holiday and party decoration suppliers in China has declined significantly as a result of the global economic slowdown.

Manufacturers of Christmas trees, for instance, are now only between 400 and 500 from being nearly 1,000 in 2007. Producers that survived the downturn do not expect the industry to shrink further as most of them have become more resilient to market changes.

On the contrary, the supplier base for holiday

costumes is expected to contract by 10 to 15 percent in the next six to 12 months. This is largely a result of several manufacturers shifting to more profitable related lines. Clappers, poppers and confetti are said to be in greater demand than costumes, which are seasonal in nature.

At present, China has 300 makers of party garments in Christmas, Halloween and Easter themes. The smaller supplier base means less competition for remaining manufacturers. Consequently, selections can become narrow and prices may go up.

The high cost of maintaining factories has spurred the rise of trading companies in the holiday and party decorations industry. In fact, many of the makers that stopped operations are shifting to this mode of business.

The trend is particularly evident in the Christmas trees category, where the percentage of manufacturers with export capability declined from 70 to 50 percent, while trading companies rose from 10 to 25 percent. Enterprises focusing on domestic sales constitute the rest.

In addition to smaller operating expenditure, the capability to offer a wider and more diverse selection is an advantage that encourages makers to become traders.

Not having to fabricate allows trading companies to focus on R&D. Many, in fact, offer design consultation as a value-added service.

China suppliers of holiday and party decorations have been taking varied approaches to cope with the effects of the world economic slowdown. Providing better service and releasing more designs are the popular ways to stir buyer interest.

Some companies are also improving their products by incorporating a range of value-added features. For Christmas trees, these include folding mechanisms, fiber-optic pine needles and the use of solar panels in place of the traditional AC power.

In a bid to generate more stable income, other makers have diversified to products that require the same manufacturing facilities. Some holiday costume suppliers are expanding to garments, toys and crafts.

Large players are implementing a range of cost-cutting techniques. These include improving production efficiency to reduce wastage and purchasing materials for various orders collectively.

Enterprises with greater financial means are also investing in R&D, believing this will help them come

out ahead when the economic tide turns. Many suppliers said they will only experience more difficulty if innovation capability is not strengthened.

Additionally, makers are adopting a series of techniques to entice clients. These efforts include less MOQ, faster delivery, and more favorable payment terms. A significant number of suppliers can now accept as small as 500 sets. Precrisis, the minimum order was 1,000.

Several companies are also widening the price range to attract buyers looking for more competitive quotes. To achieve this, many are using incandescent bulbs in place of LEDs.