Suppliers of fashion accessories in Asia implemented various strategies last year in an effort to corner a larger share of the growing market. Across several key sourcing centers, including Vietnam, the Philippines, India and Nepal, manufacturers added emphasis on improving product design and business processes, and pushing for governmental support to enhance trade with other countries.

To address the growing demand for products made of environment-friendly materials, companies are increasingly using sustainable inputs and promoting organic models. In the Philippines, for example, trade organizations and government agencies have been working together to highlight the country's strengths in making "green" products. These include ensuring that components used for bags and jewelry are obtained using practices that create only a negligible impact on the environment.

In other locations such as Vietnam, enterprises are urging the government to provide support to ensure the competitiveness of domestic makers. As a result, the national administration has entered into numerous arrangements with other countries and international trade blocs. Because of this, the country will be effecting free-trade agreements in 2015 with the ASEAN, China, Japan, Australia, New Zealand and Chile.

Improving the design capability of enterprises is another endeavor being undertaken by industries throughout Asia. Trade organizations are extending assistance to their members in terms of enhanced training and better market research, both of which play vital roles in strengthening the capabilities of domestic enterprises.

Exports

Outbound shipments of fashion accessories from Asia generally expanded in 2014, thanks to increasing demand for bags, wallets, headwear, neckwear and fashion jewelry. In particular, exports of handbags, shawls, scarves and hats gained considerably since these products typically feature traditional designs native to the country where they are produced. This degree of design diversity has been keeping many manufacturers viable in spite of intense competition from China.

Increasing online marketing capabilities also played an important part in the improvement of exports last year. With more suppliers establishing websites and having a presence in online B2B marketplaces, companies are able to easily reach out to prospective clients.

The US and the EU remain the leading overseas destinations. However, surging demand to the Asia-Pacific region, particularly Japan and mainland China, contributed considerably to the upward swing in foreign sales. The Middle East, specifically the UAE and Saudi Arabia, is another significant market as it is a major buyer of shawls and scarves.

Product trends

There is an upsurge in the production environment-friendly models as demand for these products continues to climb. For bags, hats and belts, suppliers are increasingly using plant-derived materials that come from sustainable sources. Inputs such as raffia, water hyacinth and sedge provide durability and water resistance that is not easily offered by regular fabrics.

The use of recycled components is also gaining popularity among manufacturers. Scraps of fabric are typically washed and trimmed into various shapes, and they are then sewn on handbags and purses for a quilted look. Repurposed textiles are also utilized as decorations on some hats and necklaces.

Traditional methods of production done by hand also influence the manufacture of fashion accessories. Beadwork is usually utilized to embellish bags. In Nepal, handbags and shoulder bags usually feature Dhimali and Mithila art, which are characterized by geometric and floral patterns in a variety of bright colors.

Jewelry also carries elements of local cultures, especially with the motif and type of gemstones used. In India, models are normally adorned with intricately carved brass, iron or wood. Animal bone is also widely adopted because of its durability and ease in applying paint and dye. Relaxed styles of jewelry are also prevalent, and these include beach-type items that have seashells or woven pieces of wood or vine that can have either a smooth or distressed finish.

Challenges

The surging cost of raw materials was the most critical difficulty that faced the industry in 2014. Many major inputs used for fashion accessories, including fabrics, leather semiprecious stones and auxiliary inputs, are imported from China, which adds to production costs. Sheep wool, a key component used for scarves and shawls, is normally purchased from New Zealand, Australia and Argentina. In some countries such as Nepal, SMEs generally do not have the capability to import directly. This compels them to source from a small number of domestic trading companies that essentially control prices and the supply of inputs in the entire country.

Concerns about the cost and availability of electricity are another difficulty confronting enterprises. In some countries such as Vietnam and the Philippines, high outlay is commonly an effect of having insufficient power plants. In addition, the expanding economies in these nations are fueling consumer demand for a wide variety of products and services, which also add to the increase in the cost of electricity. In Nepal, the existing infrastructure for power generation is considered inadequate due to the country's lack of natural resources for fuel. Additionally, plant breakdowns are frequent because of delayed maintenance.

Rising expenditure for labor is another obstacle for manufacturers of fashion accessories. Because of improving economies, governments have also had to adjust minimum wages in their respective jurisdictions. As a result, suppliers are required to provide higher salaries that, in turn, threaten to affect their competitiveness.

2015 Outlook

Quotes of fashion accessories are largely expected to stay level this year as the supply of raw materials is generally projected to remain steady. The drive to ensure competitiveness is another factor behind this pricing forecast.

Manufacturers are generally upbeat about export performance in 2015 as demand is seen to stay strong. Besides the continued improvement of the US economy, the EU is another major destination suppliers will be focusing on. Stable orders from alternative markets such as the Asia-Pacific, the Middle East and South Africa are also seen to contribute significantly to foreign sales.

New products in the coming months will still focus on eco-friendly materials and designs. In terms of aesthetics, bright colors will be an overwhelming feature across different product segments. Companies will also add greater emphasis on construction as demand for handbags made of sturdier fabrics and water-resistant finishes is anticipated to increase.

The high cost of raw materials is the chief difficulty makers expect to encounter this year. Price competition, not just with China but with other sourcing zones in Asia as well, is another challenge confronting the industry.

For more information about the Hinrich Foundation's industry-specific sourcing reports spanning seven different countries in Asia, visit Online Developing Country Sourcing.

This article and its contents are provided by the Hinrich Foundation, a partner of Global Sources in promoting trade across Asia. The products and the suppliers featured in this article are export assistance program beneficiaries of the Hinrich Foundation.