Suppliers are staying abreast of international events, keeping close tabs on products they can replicate and cash in on.
When Prince William of Wales announced his engagement to Kate Middleton in mid-November 2010, halfway around the globe, China makers kept their eyes peeled for business opportunities. And when high-resolution photos of the engagement ring were circulated late that month, replicas were available for sale just a few weeks after.
|Yiwu Mingwang was the first in China to release a replica of Kate Middleton's engagement ring.|
Suppliers in China refer to this as event marketing.
Apart from following industry trends worldwide, manufacturers are now staying abreast of global events and are quick to capitalize on those creating a buzz. This comes after intense competition in the low-value segment has been forcing exporters to be more creative about their product range.
Speed and accuracy are critical for success in this marketing strategy.
Zhou Ming Wang, general manager at Yiwu Mingwang Jewelry Fty, said the company was the first to release imitation versions of Kate Middleton's sapphire and diamonds engagement ring. Available in various quality and price points, the replicas were an immediate hit among the Commonwealth realms and even in the US. The biggest order received by Yiwu Mingwang was for 35,000 pieces, which were delivered within a month.
To avoid IP infringement, the ring's design was modified slightly. Instead of 14 prongs supporting the sapphire and five holding each diamond in place, Yiwu Mingwang's version only has four and one, respectively. The simulated sapphire comes in blue and purple. At $3 each, the lowest-priced model has acrylic stones. The most expensive items, ranging from $30 to $40 each, adopt high-quality cubic zirconia and rhinestones.
Being the first to release quality replicas, Yiwu Mingwang was able to maximize returns. But Zhou said suppliers in the city's fashion jewelry industry can produce samples in four to seven days, provided there are high-resolution photos of the product. And since rings are small items, 1,000-piece orders can be delivered in just three days.
Apart from the engagement ring, China makers are offering various royal wedding-themed items. These include cups, key chains, stuffed toys and caps emblazoned with the couple's photo.
Prior to this, Yiwu Mingwang and other companies engaged in event marketing capitalized on the 2008 Olympics and the 2010 Football World Cup.
Hollywood fantasy films are a rich resource for makers as well. Suppliers of toy swords and replicas, including Zhejiang Zhengs Sword Co. Ltd, release 30 to 50 new designs annually. About one-third is based on popular fantasy movies.
Although companies are observing international events and movies intently to glean export opportunities, many are still unable to reap significant profit.
For many low-value, labor-intensive industries such as gifts, toys and jewelry, the large supplier base and keen competition have kept margins low. Once a manufacturer sees some success in a particular product type, tens of thousands of other companies will start making the same item.
The $3 version of the engagement ring replica, for instance, is being sold for 30 pounds in the UK and $30 in the US. The retailer earns much more per ring than the China maker.
Note: This article "China makers capitalize on royal wedding" was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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