The Export Challenge

The Export Challenge
Brian Dunn. WWD. New York: May 19, 2010. Vol. 199, Iss. 106; pg. b.7
Abstract (Summary)
Things are looking up for the Canadian economy, but that could be a mixed blessing for
retailers and trade show organizers.
Canada's economic growth will outpace that of all other G7 countries this year and next,
according to the International Monetary Fund. Its gross domestic product will expand 3.1
percent in 2010 and 3.2 percent in 2011. The U.S. will match Canada's growth this year,
before falling behind next year, according to the IMF's World Economic Outlook report.
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COPYRIGHT 2010 FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED.
The Export Challenge
MONTREAL
Things are looking up for the Canadian economy, but that could be a mixed blessing for
retailers and trade show organizers.
Canada's economic growth will outpace that of all other G7 countries this year and next,
according to the International Monetary Fund. Its gross domestic product will expand 3.1
percent in 2010 and 3.2 percent in 2011. The U.S. will match Canada's growth this year,
before falling behind next year, according to the IMF's World Economic Outlook report.
This means, however, that Canada's retailers and trade show groups must also contend
with a Canadian dollar that has appreciated 25 percent against the greenback from a year
ago. The Canadian dollar is now flirting with par, and some economists are predicting it
will go even higher which is bad for Canadian exports. Investment firm UBS Securities
estimates the local dollar's rise since 2002 has hit Canadian exports by 14 percentage
points, with a loss of 553,000 Canadian manufacturing jobs.
As for retail, luxury, home furnishing and sporting goods stores seem to be leading the
way in sales growth year-on-year, according to the Retail Council of Canada. And based
on early estimates, the RCC predicts a rise of 3.5 to 5 percent in apparel, accessories,
cosmetics and footwear sales from 2009.
While retailers are enjoying the moment, let's also consider how long this can last if the
U.S. economy does not develop some momentum, said RCC president and chief
executive officer Diane Brisbois. Our neighbor is still in deep financial and fiscal trouble.
If these challenges hold back the rest of the U.S. economy, Canadian retailers may feel
the impact in two ways. First, their customers in exporting industries, including
resources, manufacturing and some services, may continue to worry about their jobs and
hold off buying or stay with value-priced bargains.
Second, the Canadian dollar could continue to appreciate, meaning more cross-border
shopping as increasingly hungry U.S. merchants continue to offer hyper-aggressive
markdowns. The marginal sales lost do not have to be large to take some of the zest out
of Canadian increases, she added. Remember, most Canadians live within 100 miles of
the American border.
Cross-border shoppers are most often in the market for fashion, since the price is high
enough to justify the gas money to the closest U.S. mall, according to Marshal Cohen,
chief industry analyst with The NPD Group market research firm.
Fashion tends to be the top border-crossing product, he said. It's really generally about
product that the consumer can easily transfer.
The silver lining is that most Canadian consumers are showing optimism and have begun
to open wallets a bit wider this year, according to Brisbois.
What this all means for trade shows is unclear.
The Mode Accessories Show will feature fall collections Aug. 8 to 10, at the Doubletree
Toronto Airport Hotel. More than 210 exhibitors will showcase an extensive range of
accessories, according to organizer Alice Chee. Anticipated attendance is 3,500 buyers
from boutiques, accessories stores, specialty stores, fashion chains, gift stores and salons.
Jewelry will be a strong category for fall, either delicate and small, or big and bold not
much in between. Statement necklaces close to the face are still important, but look for
long delicate pieces to complement longer fall silhouettes, said Chee.
Gloves are the most directional trend on the runway, from full-length showstoppers to
racy driving gloves. Fingerless, even in shearling, provides practical solutions for the
mobile media generation.
As for apparel, buyers can expect longer hemlines and proportions in jacket silhouettes,
larger lapels, loose, away-from-the-body shapes and wider pants. Prints will feature
winter florals (large and small), and animal prints.
The Profile and 100% Fresh Show at the Toronto Congress Center Aug. 22 to 24 expects
an uptick in exhibitors and attendance to reflect an improved economy, based on early
registrations, said organizer Michael Dargavel.
Toronto's LG Fashion Week has an enviable problem in that it has outgrown its two
previous venues and is looking for new digs to host its next event, Oct. 18 to 23.
We need over 50,000 square feet and we rely on corporate sponsors, as we get no
government support, noted Robin Kay, president of the Fashion Design Council of
Canada, which organizes the week. We've built the brand and now we have to work with
the designers to get them export-ready, as the consumer market in Canada is not very big.
LGFW is important enough to attract international buyers, but Kay would like to see
more foreign designers, like Kate Moss for Topshop.
Vancouver Fashion Week featured more local than international designers this past
spring because of the Winter Olympics, but expects to put the emphasis back on
international designers at the Nov. 3 to 8 event, said VFW spokeswoman Pam Saunders.
The number of buyers was down as people felt they wouldn't be able to book hotel rooms
due to the Olympics. But we had a number of U.S. lines at the show, including Civil
Society Clothing and Hot Air Clothing from Los Angeles.
VFW added hair and jewelry products this spring and expects to maintain them in
November. But some fear the strong Canadian dollar might discourage American buyers
from attending.
Credit: HARRY LEONARD; By Brian Dunn
Ch
Export challenges and potential strategies; Canadian manufacturers in the Chinese

market
Ronald V. Kalafsky. Journal of Small Business and Enterprise Development.
Bradford: 2009. Vol. 16, Iss. 1; pg. 47
Abstract (Summary)
Purpose - This paper aims to examine the case of Canadian manufacturers involved in the
Chinese market. In particular, it seeks to look at the challenges of entering a new export
destination, including access to market intelligence. It also aims to analyze recent
performance. Design/methodology/approach - A postal survey of Canadian
manufacturers that examined the myriad challenges and strategies for manufacturers
serves as the basis for this research. Findings - The findings show that, for these
manufacturers, face-to-face contact is important in the Chinese market. The group of
exporters, on average, was not as dependent on the US market. Perhaps most importantly,
export success is not limited solely to larger manufacturers. Research
limitations/implications - The small sample size and survey structure limited statistical
analysis. Firm-level interviews need to be conducted in order to examine unique export
success strategies in this booming market. Practical implications - The findings show that
in-person business relationships are important in the China market. Also, export success
is not limited solely to larger manufacturers. Companies involved in implementing lean
techniques tended to view China as an opportunity (rather than a threat) at a much higher
rate than other manufacturers. Originality/value - The paper provides an examination of
manufacturers attempting to enter a relatively new market after years of regionally
focused sales to a mature customer base. [PUBLICATION ABSTRACT]

Full Text
(5617 words)
Copyright Emerald Group Publishing Limited 2009
Introduction
The decision to engage in export activity can be a difficult one for many manufacturers.
First and foremost, information on the viability of distant markets and new customers is
often difficult to obtain. For newer export markets, firms must often craft entirely distinct
strategies and generate innovative product lines in order to appeal to a faraway and
unfamiliar clientele. An inclusive, firm-level orientation toward export markets has been
demonstrated as critical for success with international customers ([1] Akyol and
Akehurst, 2003; [10] Ellis, 2007). A big part of the export strategy concerns the
acquisition of accurate market information on new business environments. This can
consequently provide significant obstacles for many manufacturers who are accustomed
to serving longtime buyers likely located in geographically proximate markets ([14]
Gertler, 2004; [17] Hassink, 2005). On balance, then, exporting introduces additional
complexity to most business processes, given the effort that is required. Despite these
challenges, encouraging and developing export activity is important, as exporters have
been shown to be a critical element of regional economic development. The criticality
stems from the innovative nature of their products. In the addition, the recent findings
demonstrate that outwardly focused firms, on average, provide higher average salaries
than producers serving largely internal markets ([24] Porter, 2003).
Canadian manufacturers are now faced with the challenge of expanding globally to
increase sales and in many cases, to survive. Most Canadian firms, of course, have
always been exporters to some extent. Most of these exports were destined, by and large,
for the USA. Given the relative decline of the US manufacturing base (i.e. decreasing
purchases of components from Canadian firms) and the rapid ascent of many Asian
economies, a geographical expansion of exporting activities would appear to be a
worthwhile and almost necessary goal for many manufacturers. China, in particular,
presents a unique set of market dynamics that can present difficulties for outside firms
([3] Child and Tse, 2002). In addition to examining recent manufacturer export
performance, this paper provides initial explorations on the case of Canadian firms
currently engaged in the Chinese market. Two questions are examined in these analyses.
First, what characterizes export-intensive firms in this market and how do they differ
from other firms? Second, what strategies are companies using to explore opportunities in
China? Evidence from a survey of manufacturers indicates that many firms view China as
an opportunity to expand beyond nearby, traditional export markets, echoing a trend by
firms located in most industrialized economies. A number of firms are already doing well
in this emerging market, despite many obstacles including less-than-complete access to
information.
Research context: exporting and market orientation
Moving products across international borders entails different laws, business

environments, and organizational cultures than firms whose market is largely domestic.
The challenges and resulting initiatives that are used by firms to export differ widely, in
most cases, from those used in domestic markets. The specific ages and types of product
lines of manufacturers often determine the choice to export. Tenets of the product life
cycle framework, originally developed by [18] Hirsch (1967) and [30] Vernon (1979),
come into play when describing exporting, both in terms of product selection and
manufacturing sites. Most often, manufacturers initially produce their goods in their
home country, satisfying domestic market needs. Given domestic competition and the
need to expand sales, firms may then look to access international markets in order to
increase overall market share. This is generally the first stage in the internationalization
process for most firms (see [7], [8] Dunning, 1988, 1995). Firms can often maintain
production in their home country, via technological ownership advantages if the domestic
market remains robust. Market dynamics, however, most often cause changes in the
geographies of manufacturing, as production moves to cheaper, offshore locations ([22]
MacLachlan, 1992). And, to complicate things further, changes in the world
manufacturing environment have often led to firms that produce abroad initially rather
than first manufacturing in the home market ([6] Dicken, 2007). Given the rapidly
changing geographies of global manufacturing and customer demands, producers are
almost compelled to consider exporting as a survival strategy.
Which firms are best positioned to export? A longstanding debate continues over what
leads to manufacturer-level export success, encompassing numerous firm-level variables.
Certainly company size can be one determinant, as conventional thinking has held that
larger firms have the resources to explore new markets and moreover, can weather any
risks if the market entry does not work. For the most part, however, the evidence is
equivocal on the size-export matter (e.g. [32] Wagner, 2001; [31] Verwaal and Donkers,
2002). Often, firm size will be an asset in some product niches, while not in others. The
empirical evidence, at least in advanced manufacturing industries (e.g. high-end
machinery), points to internationally successful firms having active research agendas and
newer product lines ([21] MacPherson, 2000; [19] Kalafsky and MacPherson, 2003).
The exporting decision is not necessarily easy, as research from Martin and Sunley
(2006), [15] Grabher (1993), and others have clearly demonstrated that companies often
become dependent on local markets and in too many cases, their product lines tend to
stagnate. To access foreign markets, then, manufacturers most likely must develop new
products and implement new strategies, which ties into the concerns regarding export
market orientation, but again, reliance on long time, proximate customers often becomes
a hindrance to the development of new export strategy. Such innovative strategies would
require intelligence on new markets and customers.
Beyond product strategies and firm-level characteristics discussed above, a number of

other issues come into play when considering a foray into a new export market, such as
previous international experience, access to information, and networks. Given the
complexity of exporting and how it differs from most ordinary domestic transactions,
accurate and timely information on new markets is virtually a requirement (Rose and
Shoham, 2002). Furthermore, a concerted commitment to opening and succeeding in
these new markets would appear to be a priority for potential exporters, rather than a
strategy of tentative international market exploration (see [11] Evangelista, 1994).
Overall, the degree to which a firm commits to an export market has been shown to have
a positive relationship with overall export success ([28] Slater and Narver, 2000; [2]
Cadogan et al. , 2002). Up-to-date information pertaining to individual customers and to
the overall market, therefore, is paramount to fostering innovation and it is hoped,
eventual success ([4] Cornish, 1997a). These firm-level strategic changes are difficult for
firms with little or no exporting experience. Overall, firms must be fully committed to an
export market in terms of their strategies.
Part of this commitment entails the collection of intelligence regarding the market and its
customers. Without a doubt, obtaining international market information remains a
challenge to manufacturers, given different the legal and economic environments and
language-based challenges ([27] Shaw, 1995). Research from [5] Cornish (1997b)
emphasized that while distance does not necessarily provide an impediment to serving
new markets, collecting information on potential new customers remains paramount.
Additional research points to the fact that in order to succeed in international markets, a
face-to-face presence is needed. However, [10] Ellis (2007, p. 382) demonstrated that
expanding into export markets can provide more difficulties for firms in terms of
distance, the amount of dependence on international markets, and the variety of markets
served. The importance of such contact only increases for advanced manufacturers, who
must accurately assess the needs of distant, high-end clients ([12], [13], [14] Gertler,
1993, 1995, 2004).
These challenges are magnified in relatively new trade environments such as China (see
[23] Peng, 2000). [3] Child and Tse (2002) clearly showed that the Chinese market
entrance provides a number of obstacles not generally seen elsewhere, even in other
emerging economies. First and foremost, there are distinct differences with regard to
business communication and even hierarchies within business organizations ([20] Knoss
and Beveridge, 2007). Perhaps one of the most important obstacles to doing business in
China includes the unique and changing relationships between governments and firms
([3] Child and Tse, 2002). Differing degrees of involvement exist between private firms
and government at various levels - these relationships are also in flux. Indeed, the
structures of firms themselves change rapidly in this dynamic economy. Moreover, the
difficulties of establishing social connections that are so critical to business provide
additional challenges for the new market entrant ([16] Gu et al. , 2008). Business and
social networks in China are complicated and in the case of this study, different from
what many North American firms are accustomed to. Given this rapidly changing market
and its relative inaccessibility to newcomers, accurate market information is imperative,
perhaps more so than in other countries ([33] Wolff, 2007). These business relationships,
cultural differences, and the overall difficulties in understanding this relatively new
market, should impel firms to look for local representation. Otherwise, an already
difficult decision to export will be further complicated.
Methodology
The first stage in this research entailed examining existing data sources on exporters
within the Canadian manufacturing sector. In order to examine salient issues for
manufacturers, the CME (Canadian Manufacturers and Exporters), a leading industry
trade group, conducts an annual postal survey of producers across Canada. The CME
2006 survey instrument included queries on all facets of manufacturer operations,
encompassing the performance, challenges, and strategies of these firms[1] . An entire
section was devoted to trade-related issues and many questions focused specifically on
the Chinese market. A total of 986 valid responses were received during the 2006 survey,
providing a response rate of just under 10 percent. Chi-square and difference of means
tests compared the sample of respondents against the manufacturer population across
metrics such as firm size and product line. These tests confirmed that the sample was
statistically representative of all Canadian manufacturers. A second stage of this research
consisted of exploratory conversations with Canadian embassy (Beijing) and consular
(Hong Kong) personnel in July, 2007 and March, 2008. These informal interviews were
used to address some of the difficulties that North American firms encounter when
attempting to enter the Chinese market.
The export intensity breakdown for the survey respondents is shown in Table I [Figure
omitted. See Article Image.]. This group of manufacturers is relatively export-intensive,
with almost half of the firms reporting that over a quarter of their sales were derived from
exports. The export intensities for the US market alone are also displayed in the last
column. Given the proximity and size of the next-door market, is there a relationship
between these metrics? Gamma tests indicate a coefficient of 0.855 ( p < 0.01) for the
association between total export intensity and US export intensity for the manufacturers
participating in the survey. At the outset and as expected, one sees a group of
manufacturers whose export activities are tied largely to the North American market.
Will this dependence present difficulties as firms are compelled to look elsewhere when
global markets change?
China: exporter challenges, performance, and market entry
Within the export section of the survey instrument, a question asked manufacturers to
select the international market that held the most current and future potential. This list
consisted of 16 regions or countries. Not surprisingly, the US was the largest current and
future market. Mexico and Western Europe edged-out China for the market with most
potential. Interestingly however, China, among all countries and regions, showed the
greatest positive difference between current and future export market opportunities. At
the outset, then, the China market demonstrated signs of potential for firms looking to
expand their markets.
Taken as a whole, however, the survey data indicated that only 13.1 percent of the
manufacturers are currently exporting to China. The next several analyses will examine
this particular set of 129 firms. For this group of manufacturers, China indeed has
emerged as the country that, except for the US, was felt to have the most potential. This
stands in contrast to the findings for the entire sample, as discussed above. The responses
from the China exporters yield some noteworthy findings. For starters, this group of firms
is far more export-intensive when compared with the entire group. As seen in Table II
[Figure omitted. See Article Image.], roughly half of the firms operating in China claim
that 75 percent or more of their sales come from international markets versus just over 20
percent for the entire manufacturer sample. The links between the overall export
activities of this group and US export intensity are also noteworthy. While the gamma
tests indicated a coefficient of 0.855 between US-destined and total export intensities for
the entire sample, the coefficient falls to 0.570 for the group of manufacturers exporting
to China. This group of producers, then, is far less dependent on the US market and
overall, more export intensive.
Descriptive statistics for the China exporter sample are provided in Table III [Figure
omitted. See Article Image.]. The firms are relatively small, with just over three-fifths
consisting of fewer than 250 employees, a commonly used measure for defining a small-
to-medium-sized enterprise (SME). The group of China exporters derived roughly 23
percent of sales from new products, versus only 15 percent for the entire sample of
manufacturers. The difference illustrates the importance of innovative products when
entering world markets. The last three statistics refer to competitive issues and strategies.
Roughly two-thirds of the respondents viewed the strong Canadian dollar as a critical
business impediment, set against 54.9 percent for the entire sample. The workforce issue
is a concern for manufacturers across most of Canada, given an aging population and
increasing employment demands from the extractive industries in the western part of the
country. Finally, 35.7 percent of firms planned to use Chinese market expansion as a
main competitive strategy, compared to with only 9.9 per cent for the entire number of
respondents. This final figure would suggest that the group of China exporters sees the
importance of the market in their business operations.
It should be noted that this sample of manufacturers already doing business in China is
also fairly new to the Chinese market (see Figure 1 [Figure omitted. See Article Image.]).
Roughly 80 percent of the firms have conducted business in China for less than a decade,
over half for fewer than four years. This indicates that these manufacturers, on balance,
are recent entrants into this promising market. It also worth noting that even for these
exporters, the percentage of sales that they derived from the China market is quite small.
In fact, more than four-fifths of the respondents received 25 percent or less of their total
sales from business with China. However, as seen in Figure 2 [Figure omitted. See
Article Image.], the current group of exporters was rather bullish on the China market,
with fully 60 percent of the respondents indicating that China holds "great" or "very
great" potential. The data, in sum, point to a group of firms that see viable, long-term
potential in the Chinese market.
Were the variables that could point to potential export success for manufacturers
applicable to the survey respondents already doing business in China? The export
intensity of this group of manufacturers was tested against several of the metrics
mentioned throughout the literature as catalysts of export activity: company size, research
expenditures, and new product intensity. The results from the gamma tests are illustrated
in Table IV [Figure omitted. See Article Image.]. Notably, there were no statistically
significant correlations between export intensity and any of the commonly held indicators
of an export-intensive manufacturer. In fact, the correlation coefficients are quite low for
each of these relationships. There are only two significant relationships among all of
these variables. First, there is a positive relationship between firm size and research
intensity. This stands to reason, as larger manufacturers can afford research activities and
indeed, many small firms have no formal research efforts. Next, there is a highly
significant relationship between the intensity of research expenditures and the percentage
of sales derived from new products. This relationship, at the least, suggests a link
between expenditures on research and the amount of sales coming from relatively newer
product lines, reinforcing earlier research from [21] MacPherson (2000). Attention
focused on new, advanced product lines could be a first step toward export markets for
some manufacturers.
To explore this issue further, the same variables were run against a measure of China-
only sales intensity. Again, there were no significant relationships with the exception of a
negative correlation ( p < 0.05) with firm size. That is, these preliminary tests suggest that
in the case of these exporters, smaller firms were deriving a higher percentage of sales
from the Chinese market. Still, the lack of a statistical relationship between general
export intensity and any of the generally accepted factors is interesting and thus begs the
question: what drives firm-level export success in China?
It is worth asking from where firms are getting their initial ideas for entering the Chinese
market. Do they follow the growing literature on export orientation and market
intelligence? Firms were asked to select the leading sources of ideas for their China-
based strategies. The results are shown in Figure 3 [Figure omitted. See Article Image.].
While none of the indicators was high, 'internal staff' was by far the most popular
selection among this group of exporters. Interestingly, this finding accords with work
from [13], [14] Gertler (1995, 2004), whose studies found that having staff on location
helped the success of international firms in distant markets, especially for advanced
manufacturers. The statistical findings also accorded with the interviews held with
embassy and consular officials regarding market entry strategies for China. These
conversations revealed that local staff or at the least, local representation (via sales or
marketing agents), is almost imperative for doing business in China due to myriad,
complex regulatory and economic environments that differ by region and industry niche,
not to mention the social-business networks discussed in [16] Gu et al. (2008). The
second-most important source of information was from global leaders in the industry,
which is common for firms entering new markets. No other sources of market ideas came
close to these top-two selections.
Another survey question asked manufacturers what steps they will take to expand their
China business within the next year. The top-three strategies are shown in Figure 4
[Figure omitted. See Article Image.] (no other responses exceeded even 10 percent). The
most basic step, "travel to China", was selected by almost a third of the firms. The next
two measures, "finding a business partner" and "hiring local staff or agents", accord with
what was discussed above. In sum, at least some form of face-to-face contact matters.
This again confirms the work of Gertler and Gu et al. , and, also supports the work of
[29] Trompenaars and Hampden-Turner (1998), who stressed the importance of face-to-
face contacts and long-term relationship development in Asian business markets. On the
other hand, the relatively low score for the use of local staff for market expansion is
problematic. Conversations with embassy-consular staff and trade groups in both Beijing
and Hong Kong revealed that too many firms are still attempting to basically "cold call"
Chinese firms and are neglecting to use local intermediaries. Many outside firms enter
into business deals that quickly turn sour. Anecdotal evidence suggested that many
Canadian firms have indeed been burned in this manner. A great number of firms have
not achieved any business success due to the vastness and complexity of the China
market. In essence, the market is so large that many new entrants do not know where to
start and often make uninformed choices.
Trade journals, management texts, and consultants have increasingly discussed the
importance of implementing lean manufacturing practices in order to eliminate
inefficiencies, lower costs, and increase output. Does a company's relative stage of lean
manufacturing implementation impact its view of the Chinese market? On a final note,
explorations on this question for all 986 respondents are shown in Table V [Figure
omitted. See Article Image.], which compares the firms' current lean stage against their
estimations of the Chinese market. Fully 41 percent percent of firms in the most
advanced stage of lean manufacturing see China as an opportunity versus under 23
percent for the firms in the earliest stage, planning. Chi-square tests indicate significant
relationships in these differences at a confidence level over 99 percent. While this
evidence is of course tentative, it does suggest that firms running relatively efficient
operations are also among those who view the Chinese market as an opportunity rather
than a threat.
Analysis and discussion
The relatively small percentage of Canadian firms currently exporting to China is not
surprising. It is a new market, largely unlike North America, in terms of the general
economic environment, customer demands, language, and perhaps most importantly, the
regulatory situation. At the same time, however, it is obvious that the market holds much
promise. The fact that over 60 percent of the respondents saw high potential in China and
that a large number see this market as central to their strategies attest to China's perceived
importance. This also confirms the view of [9] Ebel et al. (2007), among myriad others,
regarding the overwhelming importance of the China market and the significance of
forming a "China strategy". An examination of the CME survey data provided an
important first step in exploring the export behaviors, challenges, and entry strategies for
Canadian manufacturers in the Chinese market.
For the comparatively small sample of firms that now produce at least some of their
output for China, often-used predictors of export activity such as firm size and research
activity exhibit no significant statistical relationship with export intensity. The fact that
firm size shows no relationship with overall export intensity and a statistically significant,
negative correlation with China-only sales might provide a note of encouragement for
smaller firms looking to enter this huge market. Most firms in this sample doing business
in China appear to confirm the earlier conclusions by [3] Child and Tse (2002) regarding
the importance of local partners or at the very least, intermediaries, to minimize risk in
this complicated market.
Could the market in China be so new and/or different that firms are not constrained by
the typical rules that apply, such as firm size or depth of international experience? By and
large, the survey data indicated that most of these manufacturers are new to the China
market. While the respondent sample was too small to draw definitive conclusions, the
exports produced by these companies covered a wide range of activities, ranging from
machinery to forest products. What did emerge was the importance of face-to-face
contacts when entering the Chinese market. Again, this is what sets China apart from the
export markets to which many Canadian firms have been accustomed, including the US
and Western Europe. This substantiates the work of [14] Gertler (2004) and [10] Ellis
(2007) regarding the importance of obtaining market information. Moreover, the survey
results tie literature supporting to the importance of establishing a solid export market
orientation (e.g. [11] Evangelista, 1994; [28] Slater and Narver, 2000). The fact that
export intensity correlates with new product intensity confirms earlier findings from [15]
Grabher (1993) and [19] Kalafsky and MacPherson (2003) regarding the importance of
innovative product lines in order to expand sales geographically. The survey results
would also suggest that in order to succeed in China, firms should have newer product
lines.
The overwhelming body of research points to the importance of extended export

orientation as an indicator of success in specific international markets. But, the survey
data indicate that most Canadian firms are relatively new to the Chinese market. The
export experience of many Canadian firms has traditionally been tied to trade with the
US, two countries with very similar market and institutional environments. Granted, the
subsample of firms doing business with China exhibited correlation with US sales at a
much lower rate, but the coefficient was still relatively high. Not only are these
manufacturers jumping into a new and relatively unknown trade environment, their
previous export orientation has been geared largely toward its next-door neighbor.
Another increasing impediment is found in the strong Canadian dollar. This issue cannot
be ignored, especially when compared with the weakening US dollar. Essentially, the
dollar disparity is pricing many Canadian firms out of potential export markets. In many
ways, this provides yet another obstacle to firms looking to export.
Conclusion
This study contributes to the exiting literature in three ways. First and foremost, the data
provide evidence of the challenges that firms from mature economies face when
attempting to expand outside of traditional markets; in this case, exploring beyond the
large North American market out of necessity. Secondly, this study offers additional
support for the importance of information, particularly when entering a new market.
Finally, these analyses supply recent data on entering the Chinese market, a rapidly
changing trade environment. Most studies do not look at specific industries, but make
general observations about strategies for market entry. This case study focused on
Canadian manufacturers, many of whom are in mature industrial sectors and besides,
have been reliant on the large and quite mature North American market for these
products. This study aimed to provide empirical evidence on such manufacturers in their
attempts to enter a largely unknown and dynamic international market.
What factors lead to success for the export of manufactured goods to China? More
investigation is needed regarding the catalysts necessary for excelling in the Chinese
market. The aforementioned conversations with consular officials showed that a wide
range of firms were succeeding in China - no particular product niche seemed to excel in
the market. The next stage of this research will explore several aspects of exports,
product niches, market entry, and market intelligence. Further analysis will examine
which specific company-level strategies are working in China, beyond the more general
measures mentioned in this paper. This line of inquiry will add to research on the
importance of accurate market information, local representation, and face-to-face contact.
It would stand to reason that manufacturers with established networks of agents or
distributors in China would exhibit higher performance. The next stage will also compare
the export performance of British Columbia and Ontario-based firms against others. It is
expected that many firms located in these two provinces will utilize existing Chinese
business networks located in Vancouver and Toronto.
The statistical analysis and preliminary consular and embassy interviews indicated the
almost idiosyncratic nature of firms succeeding in the China market. These exploratory
findings point to the next stage of this research: detailed interviews with individual
exporters to find what can be done to assist such firms to enter this promising market.
This method is supported by research from [34] Yeung (1995), who suggested that
interviews are particularly crucial for research in international business, given often-
disparate economic environments and rapidly changing companies. It should also be
mentioned that [26] Schoenberger (1991) found that firm-level conversations were
essential to understanding the complex dynamics of firms. The interviews that will take
place during the next stage of this research must explore factors not found on the survey
instrument, such as the relative international experience of firm personnel and the success
of certain product lines. It appears that in-person contact matters for this group of
exporters, but qualitative research must also further analyze exactly what specific
networking and market intelligence strategies work in this market.
[Footnote]
1. The survey answers were largely categorical or Likert-style responses, which restricted
the types of statistical tests that could be run.
[Reference]
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dos and taboos", in Hofer, M. and Ebel, B. (Eds), Business Success in China, Springer,
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37 Nos 6/7, pp. 549-78.
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Publishing, Cincinnati, OH.
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geography", Professional Geographer, Vol. 43 No. 2, pp. 180-9.
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companies in the machine tool industry", Industrial Marketing Management, Vol. 24 No.
4, pp. 329-39.
28. Slater, S.F. and Narver, J.C. (2000), "The positive effect of a market orientation on
business profitability: a balanced replication", Journal of Business Research, Vol. 48 No.
1, pp. 69-73.
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Understanding Diversity in Global Business, McGraw-Hill, New York, NY.
30. Vernon, R. (1979), "The product cycle hypothesis in a new international

environment", Oxford Bulletin of Economics and Statistics, Vol. 41 No. 4, pp. 255-68.
31. Verwaal, E. and Donkers, B. (2002), "Firm size and export intensity: solving an
empirical puzzle", Journal of International Business Studies, Vol. 33 No. 3, pp. 603-13.
32. Wagner, J. (2001), "A note on the firm-size export relationship", Small Business
Economics, Vol. 17 No. 4, pp. 229-37.
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Hofer, M. and Ebel, B. (Eds), Business Success in China, Springer, Berlin, pp. 151-68.
34. Yeung, H.W.C. (1995), "Qualitative personal interviews in international business

research: some lessons from a study of Hong Kong transnational corporations",
International Business Review, Vol. 4 No. 3, pp. 313-39.
35. Martin, R. and Sunley, P. (2006), "Path dependence and regional economic
evolution", Journal of Economic Geography, Vol. 6 No. 4, pp. 395-437.
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establishing an empirical link", Journal of Business Research, Vol. 55 No. 3, pp. 217-25.
[Appendix]
About the author
Ronald V. Kalafsky is at the University of Tennessee, Knoxville, Tennessee, USA.
Ronald V. Kalafsky can be contacted at: Kalafsky@utk.edu
[Author Affiliation]
Ronald V. Kalafsky, University of Tennessee, Knoxville, Tennessee, USA
[Illustration]
Figure 1: Amount of time in the China market (percent of firms responding)
Figure 2: The potential of the Chinese market (percent of firms responding)

Figure 3: Sources of information for China market strategies (percent of firms
responding)
Figure 4: Market expansion strategies (percent of firms responding)
Table I: Export intensities for all firms in the sample (percent of firms)
Table II: Export intensities for the sample of China exporters (percent of firms)
Table III: Selected descriptive statistics for the China exporters (percent of firms)
Table IV: Relationships between export intensity and other firm-level measures (gamma
statistics)
Table V: Lean planning stage versus viewpoints of the China market (chi-square tests)
Indexing (document details)

Subjects: Exports, Marketing, Competitive intelligence, Studies, Manufacturers
Classification 1300 International trade & foreign investment, 7000 Marketing,
Codes 9130 Experimental/theoretical, 9190 United States, 9172 Canada,
9179 Asia & the Pacific
Locations: United States--US, Canada, China
Author(s): Ronald V. Kalafsky
Author Ronald V. Kalafsky, University of Tennessee, Knoxville, Tennessee,
Affiliation: USA
Document Feature
types:
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features:
Publication Journal of Small Business and Enterprise
title: Development. Bradford: 2009. Vol. 16, Iss. 1; pg. 47
Source type: Periodical
ISSN: 14626004
ProQuest 1882612471
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Document http://proquest.umi.com/pqdweb?
URL: did=1882612471&sid=7&Fmt=3&clientId=97393&RQT=309&VName
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OPINION: Export challenges

Anonymous. Businessline. Chennai: Apr 14, 2008.
Abstract (Summary)
The target for this year's exports is $200 billion - a 30 per cent rise over last year. That
was a pace of growth before the rupee grew 12 per cent against the dollar and when
inflation was under control. Now, with the rupee showing no signs of easing, inflation
rising in tandem with global price spikes, and the IMF predicting slower world trade,
chances are exporters will have to fight tooth and nail to retain market share. The policy
contains a few initiatives meant simply to enable exporters retain margins: extension of
the popular Duty Entitlement Pass book scheme, tax refunds and interest subsidies for
garment exporters. However, other than increasing the burn rate on the tax-payer's
money, these measures have limited value in enhancing product presence in periods of
intense competition.

Full Text
(431 words)
(Copyright 2008. Financial Times Information Limited - Asia Africa Intelligence Wire.
All Material Subject to Copyright .)
from BUSINESS LINE, April 14, 2008 Like other policy-makers, those in the Commerce
Ministry too are caught between a rock and a hard place when it comes to creating
enabling environments. On the one hand, global trade is heading down on pessimistic
economic cues from developed nations and the domestic economy is showing signs of
exhaustion, with the IMF joining those predicting lower than 8 per cent growth. On the
other, the general elections are a year away and, more than at any other time, the
government must now be seen reviving the economy - creating jobs - and reining in
inflation. In its annual statement, the Commerce Ministry exhibits an odd mix of bravado
and caution
The target for this year's exports is $200 billion - a 30 per cent rise over last year. That
was a pace of growth before the rupee grew 12 per cent against the dollar and when
inflation was under control. Now, with the rupee showing no signs of easing, inflation
rising in tandem with global price spikes, and the IMF predicting slower world trade,
chances are exporters will have to fight tooth and nail to retain market share. The policy
contains a few initiatives meant simply to enable exporters retain margins: extension of
the popular Duty Entitlement Pass book scheme, tax refunds and interest subsidies for
garment exporters. However, other than increasing the burn rate on the tax-payer's
money, these measures have limited value in enhancing product presence in periods of
intense competition. Yes, cutting transaction costs, reducing procedural delays, and
improving the infrastructure would help; certainly, employment must increase. But just
how exporters are to face the daunting challenges ahead in markets that have not yet
bottomed out is unclear. Most exporters may find relief in the concessions now extended
for longer periods; if the rupee does not strengthen further, profit margins may just
stabilise, though even that is unlikely if the orders diminish. A flexible and dynamic
approach to markets is what will enable exporters get over cyclical turns in currency
values. So far the IT industry has learnt this lesson and is able to weather price
dislocations by servicing client expectations. In the event, this may be a good time for
some strategic reflection on market realities; before scaling productivity levels,
merchandise exporters primarily need to orient production to market needs. As the
Minister of State for Commerce, Mr Jairam Ramesh, pointed out, India must export what
the world needs, not simply what it cares to produce. India produces cost-effective khadi;
but does the world want it? Copyright 2007 Business Line

Author(s): Anonymous
Document News
types:
Publication Businessline. Chennai: Apr 14, 2008.
title:
ProQuest 1461896671
document ID:
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Count
=PQD
atellites Circling China's Domain
Liza Casabona. WWD. New York: Jan 28, 2010. Vol. 199, Iss. 19; pg. 16
Abstract (Summary)
Asia remains the epicenter of apparel manufacturing, but within the region new
manufacturing sources are emerging to challenge China's dominance.
In a year that saw consumer demand plummet at a staggering rate, Vietnam, Bangladesh,
Cambodia and India held onto significant market shares and in some instances were able
to grab a larger piece of apparel exports.

Full Text
(1256 words)
COPYRIGHT 2010 FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED.
SATELLITES CIRCLING CHINA'S DOMAIN
Asia remains the epicenter of apparel manufacturing, but within the region new
manufacturing sources are emerging to challenge China's dominance.
In a year that saw consumer demand plummet at a staggering rate, Vietnam, Bangladesh,
Cambodia and India held onto significant market shares and in some instances were able
to grab a larger piece of apparel exports.
Among the top exporters to the U.S., only Vietnam maintained an upward trajectory
through the bulk of 2009, but industry sources pointed to Bangladesh, India and
Indonesia as important emerging producers of textiles and apparel. The countries are
well-positioned to begin growing once the global macroeconomic outlook stabilizes,
sourcing executives said.
The top emerging exporters to the European Union by value, according to the most recent
data available from Eurostat, were Bangladesh, Sri Lanka, China, India, Pakistan,
Indonesia, Cambodia and Vietnam. Japan's top emerging apparel sources, according to
Japan Customs data, included Haiti, Cambodia, Nicaragua, Honduras, Guatemala and
Bangladesh.
If you are looking at emerging suppliers, defined as places where there's growth& then
there's few and far between where there's any growth [in 2009], said Julia Hughes, senior
vice president of international trade for the U.S. Association of Importers of Textiles &
Apparel.
Cost, speed-to-market, experience and the availability of raw materials figure

prominently in sourcing decisions and the countries that did well in 2009 offered
companies opportunities their competitors did not, sources said.
The beneficiaries are countries that don't just offer a trade advantage, but offer a business
advantage, said Mark Jaeger, vice president and general counsel for Jockey International
Inc.
Another draw was countries that have an industry of scale, so you can have confidence
that [the orders] you put there can be absorbed and produced, Jaeger said.
Countries like Vietnam, Cambodia, Bangladesh and China are able to offer firms
complete finished goods solutions, Jaeger said.
According to the Commerce Department's Office of Textiles & Apparel, Vietnam's

textile and apparel exports to the U.S. increased 20 percent for the first 11 months of
2009 to 2 billion square meter equivalents, or $4.9 billion. Vietnam is the fifth largest
supplier of textiles and apparel to the U.S., but it is the second-largest source for apparel.
Exports to the EU from Vietnam rose 0.3 percent to 938.6 million euros, or $1.3 billion at
current exchange, according to EU data for 2009. The benefits of doing business in
Vietnam include access to inputs from China and the quality, needlework and skills that
apparel firms want, said Jeff Streader, senior vice president of global sourcing for Guess
Inc.
We feel the capacity to produce a quality product exists there, Streader said.
Vietnam's textile and apparel export revenue in 2009 is expected to reach $9.3 billion, 3
percent higher than the previous year, according to a source in the Vietnamese
government. Vietnam suffered smaller losses in market share during the recession
compared with its Asian competitors. The end of a controversial U.S. monitoring
program of Vietnamese apparel imports early last year helped stimulate further growth in
exports and production.
Bangladesh was also not immune to the impact of the global downturn, but after a sudden
intensification in the slowdown in export orders for apparel in the second half of 2009,
sales started to pick up in the new year.
As the recessionary situation is now improving in the main markets of the West, buyers
are busy with deals for improved shipments from Bangladesh, said Abdus Salam
Murshedy, president of the Bangladesh Garment Manufacturers & Exporters Association,
which represents more than 3,000 woven apparel factories.
Bangladeshi apparel manufacturers were able to eke out some market share gains. The
Apparel Exports Promotion Council of India said shipments of apparel from Bangladesh
surpassed those from India in the first nine months of 2009. Commerce Department data
show India still outstripped Bangladesh in textile and apparel imports to the U.S., while
Bangladesh saw a smaller decline in shipments.
Textile and apparel imports from Bangladesh to the U.S. dropped 3.2 percent compared
with a year earlier to 1.5 billion SME, or $3.2 billion, in the first 11 months of 2009.
Shipments of textiles and apparel from India fell 5 percent compared with a year earlier
to 2.5 billion SME, or $4.2 billion, during the same time period.
Indian garment manufacturers expect business to improve in 2010 after a bruising 2009,
but reform of the sector is as vital as a global economic recovery.
Plummeting demand in India's main apparel markets the U.S. and Europe resulted in
falling export sales. Hundreds of thousands of employees were laid off and scores of
factories closed. Already, 2010 looks brighter, thanks largely to rising demand in Europe,
manufacturers said.
Things are improving, no doubt, said Surendra Jain, chief executive officer of Delhi-
based Kuttu International, which exports to the U.S. and Europe.
But he said his company was constantly looking for ways to cut costs in its struggle to
remain price-competitive with rival countries like China and Bangladesh.
India's garment industry is largely constituted of small- to medium-size companies, like

Kuttu International, which employs a staff of 60. Labor laws in India remain restrictive,
and companies said they were looking to the government for support.
India has the raw materials to challenge China, he said. They have the know-how to
challenge China. They have the labor force to challenge China. They just need to operate
more consistently.
Despite successes in other regional countries, China is still the undisputed juggernaut of
apparel sourcing. However, the global financial crisis, coming on the heels of policy
measures that made producing textiles and apparel in China more expensive, proved even
the world's factory is not immune to serious economic woes.
Textile and apparel imports to the U.S. from China during the first 11 months of 2009 fell
1.4 percent to 19 billion SME, or $29.3 billion. Analysts and companies in China say this
will be another year of restructuring and rebuilding, but with the knowledge that
economic recovery is well under way, and the outlook is optimistic.
The textiles and apparel manufacturing industry was among the hardest hit through 2008
and 2009. By the time orders from the U.S. and Europe fell off at the end of 2008,
thousands of factories had already shut down across southern China's manufacturing zone
some bound for cheaper production markets, others driven entirely out of business.
The manufacturing industry is reemerging, however, leaner and potentially more

competitive. Even though the government does not have direct plans to spend economic
stimulus money on the industry, manufacturing orders have picked back up with the
general global recovery and increasing domestic consumption. In December, China's
exports rebounded from a 13-month trend of declines to increase 17.7 percent over the
same month in 2008.
Several economists said the upward trend in manufacturing is directly related to a U.S.
recovery, as it is the largest buyer of Chinese-made goods. And despite a series of high-
profile trade spats, the U.S. and China remain economically reliant on one another.
The U.S. and Chinese economies are just so interdependent, said He Weiwen, a trade
policy specialist in Beijing. We've just seen some initial signs of recovery [in the import-
export data] and that's a good sign. We have confidence that in 2010 both economies and
trade will continue to improve.
Credit: JAHIR AMED; COURTESY OF VIETNAM TEXTILE & APPAREL

ASSOCIATION; Kathleen McLaughlin; Jahir Ahmed; Mian Ridge; By Liza Casabona
With contributions from Kathleen McLaughlin, Jahir Ahmed and Mian Ridge
[Illustration]
Caption: An embroidery plant in Bangladesh.; The Turbo garment factory in Thailand.;
Vietnam's fashion exports are growing.

Subjects: Clothing industry, Location of industry, Competition
Classification 9179 Asia & the Pacific, 8620 Textile & apparel industries,
Codes 7000 Marketing
Locations: Asia
Author(s): Liza Casabona
Document News
types:
Section: 1
Publication WWD. New York: Jan 28, 2010. Vol. 199, Iss. 19; pg. 16
title:
ISSN: 01495380
ProQuest 1953068771
document ID:
Text Word 1256
Count
=PQD
just-style's review of the apparel industry in 2009: Management briefing: May

Anonymous. Just - Style. Bromsgrove: Dec 2009. pg. 9, 3 pgs
Abstract (Summary)
Some creative thinking inspired by the recession within the clothing and textile sector
was on show this month. On May 19, Marks & Spencer, the UK's biggest clothing
retailer, launched a new initiative to accelerate business reforms after posting a 37.5%
slump in annual profits. Meanwhile, UK luxury retailer Harvey Nichols on May 6 said it
would focus on consumers young enough to ignore the recession and tourists cashing in
on the weak pound. On May 11, Morocco's government followed suit with a new strategy
to boost exports -- including textiles. May also showed how the challenges posed by the
slump could challenge the biggest names. On May 28, French luxury fashion house
Christian Lacroix declared itself insolvent and a commercial court subsequently placed
the company in administration for six months.

Full Text
(507 words)
Copyright Aroq Limited Dec 2009
Some creative thinking inspired by the recession within the clothing and textile sector
was on show this month.
On 19 May, Marks & Spencer, the UK's biggest clothing retailer, launched a new
initiative to accelerate business reforms after posting a 37.5% slump in annual profits. Its
'202O - Doing the Right Thing' programme was designed to increase the pace of change
from design to delivery, drive international expansion in China, India, and Central and
Eastern Europe, and hasten the integration of its multi-channel operations.
Meanwhile, UK luxury retailer Harvey Nichols on 6 May said it would focus on

consumers young enough to ignore the recession and tourists cashing in on the weak
pound. Speaking at The World Retail Congress, in Barcelona, Spain, Harvey Nichols
CEO Joseph Wan unveiled a double-pronged strategy to adapt to lower spending in the
UK. "As a business we need to find new ways to find market share, " he said.
On 21 May, a new body was set up to represent the UK's fashion and textile industry and
help companies to trade more effectively both domestically and overseas. The UK
Fashion and Textile Association succeeded the UK Clothing Industry Association
(BCIA).
On 1 1 May, Morocco's government followed suit with a new strategy to boost exports -
including textiles. 'Maroc Export Plus' would promote Moroccan products worldwide and
boost productivity, including training for export industries, notably clothing.
May also showed how the challenges posed by the slump could challenge the biggest
names. On 28 May, French luxury fashion house Christian Lacroix declared itself
insolvent and a commercial court subsequently placed the company in administration for
six months. It had been "hit by the world financial crisis which is having a significant
impact on the luxury goods sector," said the company, with women's fashion sales, its
core segment, declining 35%.
"The current recession has brought great change to the apparel industry. To those who
can recognise and embrace this change, and who are in its forefront, it will bring
enormous opportunity. To those who are blind, obdurate, and in the rear, this change will
bring disaster.
"Nowhere is this change greater than on the supplier side, where the entire garment
industry is in a state of flux. For the past decade, the global garment export industry has
been changing rapidly and constantly. "
just-style editorial comment, 12 May 2009
[Author Affiliation]
About the author
International News Services' writer for this briefing is its editor Keith Nuthall.
International News Services is an 11-year-old international news agency, serving around
150 specialist publications, with more than 40 experienced writers based around the
world. Copy is edited centrally to a high standard, providing smaller titles with an
extensive feed of bespoke foreign news and features. It focuses especially on the
commercial impact of globalisation and the growth in power and authority of
international organisations. The agency's writers explain the regulations and laws flowing
from these often remote and usually complex institutions, such as the European Union,
the World Trade Organisation and United Nations agencies.
For more information, see www.internationalnewsservices.com

Subjects: Clothing industry, Recessions, Retail stores, Initiatives
Classification 9175 Western Europe, 8620 Textile & apparel industries,
Codes 8390 Retailing industry
Locations: United Kingdom--UK
Author Affiliation: About the author
International News Services' writer for this briefing is its editor
Keith Nuthall.
International News Services is an 11-year-old international news
agency, serving around 150 specialist publications, with more than
40 experienced writers based around the world. Copy is edited
centrally to a high standard, providing smaller titles with an
extensive feed of bespoke foreign news and features. It focuses
especially on the commercial impact of globalisation and the
growth in power and authority of international organisations. The
agency's writers explain the regulations and laws flowing from
these often remote and usually complex institutions, such as the
European Union, the World Trade Organisation and United Nations
agencies.
For more information, see www.internationalnewsservices.com
Corporate/Instituti International News Services
onal author:
Document types: Feature, Industry Report
Publication title: Just - Style. Bromsgrove: Dec 2009. pg. 9, 3 pgs
Special issue: just-style's review of the apparel industry in 2009:
ProQuest 1936622191
document ID:
Text Word Count 507
Document URL: http://proquest.umi.com/pqdweb?
did=1936622191&sid=8&Fmt=3&clientId=97393&RQT=309&VN
ame=PQD
he clothing industry and the economic crisis - a just-style review: Management
briefing: Recession brings chance for suppliers to change
Anonymous. Just - Style. Bromsgrove: Sep 2009. pg. 20, 6 pgs
Abstract (Summary)
Most garment suppliers are quick to blame their declining exports on the recession. In a
competitive industry, market share is a better tool to determine success than sales volume
because management is interested in how well their company does in comparison to
others. In a global industry, where your competitor may be located on the other side of
the world, market share is almost always the best guide in indicating success or failure.
This is just common sense. Nevertheless, there is always the exception to this seeming
logic. Until Friday July 10 -- the day the US Office of Textiles and Apparel issued the
May 2009 data -- the industry did not know that it had crossed the final line into the
unknown. The world is now faced with a new challenge -- the great recession, a time
where every garment exporting country is a loser. The dominant few will have created
the strategies for the future at the very time when others could only hope for the best.

Full Text
(1549 words)
Copyright Aroq Limited Sep 2009
11 August 2009 | Source: just-style.com
Most garment suppliers are quick to blame their declining exports on the recession. But
what if the problem is not the recession but rather a major longterm shift in the market?
For the dominant few, the current downturn brings an opportunity to create new strategies
for the future, writes David Birnbaum.
In a competitive industry, market share is a better tool to determine success than sales
volume because management is interested in how well their company does in comparison
to others.
The question is always: Are we doing better or worse than our competitors?
Sales go up and sales go down. The market goes up and the market goes down. But often
the two trends do not go in tandem.
If your sales rise in a falling market, you are definitely doing well - customers are shifting
business from your competitors to you.
But if your sales rise in a rising market, your seeming success may be illusory.
You may think you are doing well since your sales are going up, when in fact your
customer is actually shifting business away from you to your competitor and your real
market share is falling.
In a global industry, where your competitor may be located on the other side of the world,
market share is almost always the best guide in indicating success or failure. This is just
common sense.
Nevertheless, there is always the exception to this seeming logic.
What happens when the market turns so bad that everybody's business goes down, a time
when everybody is a loser? Granted this almost never happens, but theoretically it could.
Venturing into the unknown
We all know that business sucks. However until Friday 10 July - the day OTEXA (the US
Office of Textiles and Apparel) issued the May 2009 data - we did not know that we had
crossed the final line into the unknown.
Looking at the data for the first five months from January to May 2009, Bangladesh still
looked good with export volume increases of close to 10%. Vietnam looked okay with
increases of 7%. In terms of market share, Bangladesh, Vietnam, Indonesia, Greater
China, India and Sri Lanka all showed positive growth.
However, the data for the month of May told a very different story. US imports for May
dropped 15.7%, completely changing the market.
In May 2009, every major garment supplier showed declining exports. In terms of market
share, Bangladesh, Vietnam, Indonesia, and Greater China still looked good - but you
can't take market share to the bank. In terms of sales volume there were no winners, at
least among the big suppliers.
Welcome to the Twilight Zone where even the biggest winners are losers, and where
factories with rising market share can still go broke because of lack of business.
Welcome to the world of May 2009. What happened? Why did this happen? What does
this mean for the future?
Blaming the recession
The common wisdom - the straw grasped by most suppliers and particularly their
governments - is the recession.
Everything is due to the collapse of the market. T-shirts are not selling in Des Moines,
Iowa because greedy bankers in New York played fast and loose with our economy.
Their answer is: "Hold on until the recession ends and let's employ the strategy of short-
term fixes like tax rebates and outright subsidies. Eventually, the market will return to
normal and the survivors - at least those who survive will go back to business as usual."
Certainly the bankers and their crooked ilk have many things to answer for, but the end of
the never-ending T-shirt market may not be one of the many.
What happens if the recession lasts for another year or even two? What happens if, as
some economists are now predicting, the end of the recession does not bring rising
employment? What happens if the recession ends but the consumer does not return to that
mass frenzy of T-shirt consumption that we have grown accustomed to?
What happens if the problem is not the recession but rather a major long-term shift in the
market?
Most importantly, what if the problem has always been there and we did not see it until
the recession brought it out into the open?
Ever-present industry
Ours is a very strange industry. It is not just global, it is ubiquitous. If there are 192
countries worldwide, there are 192 garment exporting industries.
At any given time, a very few national industries dominate the industry. At some point,
their dominance usually ends and their importance as a supplier fades away.
For example, there was a time when the Philippines and Thailand rivalled China as
dominant garment industries.
There was a time, less than 10 years ago, when Mexico supplied the US with more
garments than China. These erstwhile winners have all but disappeared, lost in an ever
more complex market.
But there are a few countries whose industries have been able to maintain their dominant
position for decades - Hong Kong, Korea, Taiwan and most recently China.
Surprisingly three of the four do not rank high on the US government list of major
garment suppliers. Hong Kong is 16th, Taiwan 22nd and Korea 27th (just behind Haiti).
True, none of the three export much in the way of garments, but their companies are still
the industry leaders.
If you have any doubts, consider this: Hong Kong-based Li & Fung is the world's second-
largest garment supplier after China.
In the past 12 months, Li & Fung sales were larger than total garment exports from all of
South Asia - Bangladesh, India, Pakistan and Sri Lanka combined.
Furthermore, Li & Fung may be the largest company in Hong Kong but there are others
in their league.
Korea and Taiwan are home to the vast majority of the world's 50 largest garment
exporters. Throw in China and you have the greatest agglomeration of garment exporters
in the world.
So while Bangladesh, Vietnam and Indonesia certainly look good today, we should wait a
few decades before rushing to place them in the same category as Hong Kong, Korea,
Taiwan or China.
Secrets of success
There are good reasons why these four have consistently succeeded while the 188 others
have not.
It is all about change and the relationship between each national industry and change.
The fact is that the only constant thing in our industry is that our industry changes and
our changes are not incremental.
Our industry does not move, rather it lurches from one crisis to another. To most garment
exporting countries crisis implies victimisation. To the dominant four, crisis brings
opportunity.
What happens when the US imposes its highest tariffs on garment imports?
To most exporters, high tariffs can be overcome only by lower wages. To the smart
operators, the solution to higher tariffs is to move from cheap commodities to higher
value-added fashion goods.
What happens when the US imposes non-tariff restrictions?
To most exporters, the solution to quota restrictions is smaller exports. To the smart
operators, the solution to quota restrictions is the trans-national factory with branches
manufacturing wherever there are is no quota.
In this sense the global garment industry dominated by the four Asian dragons has been
the direct result of the US's 45-year struggle to limit garment imports.
Their success would never have occurred had the US and EU not restricted trade.
The world is now faced with a new challenge - the great recession, a time where every
garment exporting country is a loser.
To most garment exporting countries, the current recession is just one more proof that
they are victims - impotent to move against powers beyond their control. Their solution is
to wait out the current downturn, to subsidise their factories and to hope for the best.
For the dominant few, the current recession brings opportunity.
While others wring their hands, hoping for the best (or at least to avoid the worst), their
solution is to effect the changes which in normal times would never have been possible.
Their solution is to move from product maker to service supplier, not just to compete
against other low-cost garment exporters, but rather to reduce costs by transferring the
work currently being carried out in the high labour cost importers countries to the low-
cost supplier countries.
Why bother replacing some sewer in Bangladesh who is paid US$0.30 an hour when you
can replace some executive in New York who is paid $125,000 per annum?
When the recession finally ends and the dust clears, there will be a new industry with a
new paradigm based on service.
And that industry will be dominated by those who look at crisis not as periods of
victimisation but rather as unique opportunities to move forward.
The dominant few will have created the strategies for the future at the very time when
others could only hope for the best. In that new industry, 188 victims will be left further
behind and be less competitive than ever.
David Birnbaum is the author of The Birnbaum Report, a monthly newsletter for garment
industry professionals. Each issue analyses in-depth US garment imports of four major
products from 21 countries, as well as ancillary data such as currency fluctuations, China
quota premiums and clearance rates.

Subjects: International, Recessions, Suppliers, Market shares, Competition,
Clothing industry
Classification 8303 Wholesale industry, 9180 International, 7000 Marketing,
Codes 8620 Textile & apparel industries
Document Feature, Industry Report
types:
Document Illustrations, Tables
features:
Publication Just - Style. Bromsgrove: Sep 2009. pg. 20, 6 pgs
title:
Special issue: The clothing industry and the economic crisis - a
ProQuest 1915220051
document ID:
Text Word 1549
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=PQD
The strong fundamentals of the Jordanian economy help mitigating the impact of
the current crisis
Anonymous. Al Bawaba. London: Feb 1, 2009.
Abstract (Summary)
In its latest brief on economic and financial developments in Jordan, National Bank of
Kuwait (NBK) noted the Jordanian economy has undergone remarkable results in recent
years and has begun to reap the fruit of structural adjustments and steady progress with
reforms. The economy has grown by more than 12% per annum over the last four years,
which resulted in a 10% annual improvement in per capita income over the same period.
Real growth averaged 7.8% despite external challenges which have taken their toll on the
economy in recent years. The prospects for the Jordanian economy look promising,
though will not be insulated from the negative effects of the global financial crisis and
recession. Economic growth, exports, and tourism are expected to suffer slowdowns, as
should workers remittances though to a lesser degree. Furthermore, Jordan still needs
additional measures to address major issues where efforts so far have met with limited
success. Unemployment, poverty, and the considerable vulnerability of the economy to
external factors remain key challenges. Political stability and security are the backbone of
the Jordanian economy, as is the government's commitment to reform. The creation of a
market-oriented economy, privatization drive, WTO membership, enhanced
transparency, investment in education and, most importantly, Jordan's firm stance on
reform, have all contributed to the transformation of the country's economy over the past
20 years. Confidence, as evidenced by the number of domestic and foreign investors
engaged in huge projects, has been well leveraged and Jordan can be seen as something
of an example in the area of privatization.Jordan has, however, been adversely affected
by the rise in oil prices between 2002 and mid-2008 as reflected in the government
budget and current account. The rise in the oil imports bill has caused a significant
deterioration in the current account, causing it to shift from a surplus of 5.7% of GDP in
2002 to a deficit of 18% in 2007, which is estimated to widen further in 2008. On the
positive side, receipts from tourism and workers remittances climbed considerably,
benefiting from the regional abundance of liquidity. The budget deficit also increased
from 3.2% in 2002 to 5.2% in 2007 in light of the expansionary fiscal policy and oil
subsidies introduced by the government. The estimated deficit for 2008 is expected to
exceed the original budget forecast of 5.6% of GDP as a result of the substantial increase
in government salaries in early 2008. However, the projected budget deficit of 4.6% of
GDP for 2009 may force the government to rein in spending and adopt a more
conservative approach.NBK mentioned that the extraordinary performance of exports in
recent years has been the result of a free trade agreement with the US that was signed in
2000. Since 2003 the US has become a major destination for Jordanian exports absorbing
28% of total exports in 2007. Apparel is the main export. However, with the ongoing
liberalization of trade, and especially in the light of the WTO agreement on textiles and
clothing that have led to an increasing number of countries forming free trade areas with
the US, as well as the weakness in the US economy, it is likely that the domestic textile
industry could face a rough ride. This is already evident in the drop in Jordanian exports
to the US by 17% during the first half of 2008.

Full Text
(1675 words)
((C) 2009 All rights reserved. Albawaba.com)
In its latest brief on economic and financial developments in Jordan, National Bank of
Kuwait (NBK) noted the Jordanian economy has undergone remarkable results in recent
years and has begun to reap the fruit of structural adjustments and steady progress with
reforms. The economy has grown by more than 12% per annum over the last four years,
which resulted in a 10% annual improvement in per capita income over the same period.
Real growth averaged 7.8% despite external challenges which have taken their toll on the
economy in recent years. The prospects for the Jordanian economy look promising,
though will not be insulated from the negative effects of the global financial crisis and
recession. Economic growth, exports, and tourism are expected to suffer slowdowns, as
should workers remittances though to a lesser degree. Furthermore, Jordan still needs
additional measures to address major issues where efforts so far have met with limited
success. Unemployment, poverty, and the considerable vulnerability of the economy to
external factors remain key challenges. Political stability and security are the backbone of
the Jordanian economy, as is the government's commitment to reform. The creation of a
market-oriented economy, privatization drive, WTO membership, enhanced
transparency, investment in education and, most importantly, Jordan's firm stance on
reform, have all contributed to the transformation of the country's economy over the past
20 years. Confidence, as evidenced by the number of domestic and foreign investors
engaged in huge projects, has been well leveraged and Jordan can be seen as something
of an example in the area of privatization.Jordan has, however, been adversely affected
by the rise in oil prices between 2002 and mid-2008 as reflected in the government
budget and current account. The rise in the oil imports bill has caused a significant
deterioration in the current account, causing it to shift from a surplus of 5.7% of GDP in
2002 to a deficit of 18% in 2007, which is estimated to widen further in 2008. On the
positive side, receipts from tourism and workers remittances climbed considerably,
benefiting from the regional abundance of liquidity. The budget deficit also increased
from 3.2% in 2002 to 5.2% in 2007 in light of the expansionary fiscal policy and oil
subsidies introduced by the government. The estimated deficit for 2008 is expected to
exceed the original budget forecast of 5.6% of GDP as a result of the substantial increase
in government salaries in early 2008. However, the projected budget deficit of 4.6% of
GDP for 2009 may force the government to rein in spending and adopt a more
conservative approach.NBK mentioned that the extraordinary performance of exports in
recent years has been the result of a free trade agreement with the US that was signed in
2000. Since 2003 the US has become a major destination for Jordanian exports absorbing
28% of total exports in 2007. Apparel is the main export. However, with the ongoing
liberalization of trade, and especially in the light of the WTO agreement on textiles and
clothing that have led to an increasing number of countries forming free trade areas with
the US, as well as the weakness in the US economy, it is likely that the domestic textile
industry could face a rough ride. This is already evident in the drop in Jordanian exports
to the US by 17% during the first half of 2008. Jordan has been a beneficiary of the boom
in the Gulf Cooperation Council (GCC) countries, which has resulted in abundant
liquidity and unprecedented levels of private capital inflows. The GCC economic boom
has had another positive influence on Jordan, namely the rise in remittances that reached
17% of GDP, given that an estimated 350 thousand Jordanians are believed to work there.
Tourism has also been a beneficiary. Unfortunately, the global scene does not bode well
for continued growth in this area.Over the last two years, NBK noted that oil prices have
been the second major contributor to the surge in inflationary pressures. Inflation, as
measured by the change in the consumer price index, is expected to climb to a record
12% in 2008. This increase is the result of the lifting of fuel and petroleum product
subsidies last February, which amplified the impact of higher oil and food prices. Greater
relief, however, is expected from the recent sharp drop in oil, food, and other commodity
prices. Other contributors to rising inflation in recent years have been growing domestic
demand, expansionary fiscal and monetary policies, as well as the acute depreciation of
the Jordanian dinar against major non-dollar currencies.Jordan is poor in natural
resources, and is essentially a service oriented economy that is highly competitive
regionally in the areas of skilled labor, information technology, health, education, and
tourism. However, the recent slump in the world economy is likely to dampen the outlook
slightly in the near term. According to NBK, the monetary policy of the CBJ moves in
line with that of the US Federal Reserve because of the strict peg of the domestic
currency to the US dollar. The CBJ cut the re-discount rate and the overnight deposit rate
by 0.75 percentage points over the two years ending September 2008 to 6.75% and
4.50%, respectively, and cut the interest rate on repurchase agreements by 2 percentage
points to 6.50%. Rates were cut again in November by another 50 basis points. The
anticipated reduction in the rate of inflation in the last quarter of 2008 and 2009 led the
CBJ in November to cut the obligatory required reserves by one percentage point and
ease constraints imposed on credit growth.While the banking sector in Jordan is
considered sound and well supervised, confidence in banks was recently enhanced by the
government's recent move to fully guarantee bank deposits until the end of 2009. Bank
profits are expected to remain at comfortable levels this year, but have been negatively
affected by the severe losses in the stock market in recent months. The price index of
Amman stock Exchange lost 31% of its value since the start of October 2008 through
December 26. However, the Jordanian economy still faces a number of challenges. The
persistent double-digit unemployment rate tops the list of problems. Even with the
remarkable economic growth, unemployment remained at 13% in 2007 and during the
first nine months of 2008, a reflection of a mismatch in the labor market. Foreign workers
outnumber unemployed Jordanians. NBK noted that Jordan has implemented several
measures to alleviate its unemployment and poverty problems. However, one school of
thought maintains that the unemployment problem would be far worse had a significant
portion of the labor force not chosen to emigrate (estimated to be 25% of the labor force).
There may be some truth in the argument but with large numbers of skilled laborers
leaving to work abroad, it is undoubtedly having a negative impact on the long-term
development of the country. Jordan suffers badly from a brain drain according to the
World Competitiveness report. Jordan may wish to take its lead from some South Asian
countries which provided significant incentives for its wealthy and skilled migrants to
return home and participate in the development of their countries resulting in further job
creation.Another major concern is that the Jordanian economy is very susceptible to
external shocks, though it has enjoyed a higher level of resilience in recent years. In the
last few years, Jordan has become more dependent on external private inflows to finance
its current account deficit, in contrast to its dependence on foreign grants and loans in
earlier years. In March 2008, Jordan concluded an agreement to buyback $2.4 billion of
its debt owed to the Paris Club at an estimated 11% discount rate, using funds from the
proceeds of privatization and through partial assistance from other GCC countries. This
agreement is anticipated to reduce the ratio of foreign debt to GDP by a quarter to 36%.
Debt service obligations are expected to decline accordingly by around $240 million
annually.OutlookAccording to NBK, the established and strong record of reforms and
liberalization is expected to lessen the impact of the global financial crisis on the
Jordanian economy relative to other countries in the region. The economy is expected to
continue recording satisfactory growth rates in the medium term, ranging between 4%
and 5%. Domestic demand will be the main driver of this growth, and will partially
compensate for the reduction in exports especially to advanced countries as a result of the
global recession. However, there are some risks surrounding the outlook. The global
recession may turn out to be more severe than originally envisaged, especially in the US,
the main destination for Jordanian exports. In addition to bringing down economic
growth, such a scenario would rule out any improvement in the unemployment rate,
keeping it around its current level of 13%, if not worse. The current account deficit is
expected to shrink from an estimated 20% of GDP in 2008 to 12% in 2009. The sharp fall
in oil and food prices that started in the third quarter of this year should lower the import
bill in 2009 more than offsetting the slowdown in exports. This should also help
moderate inflationary pressures from an estimated 12% in 2008 to around 6% in 2009.
However, some major components of the current account are expected to be negatively
affected; mainly tourism, workers' remittances, and transport. Private capital flows, from
Gulf countries in particular, may see a setback if investors start repatriating funds in
response to the tight credit conditions at home, intensifying pressures on the financing of
the current account deficit, as well as the country's foreign reserves. The budget deficit is
also expected to decline in 2009 and over the medium term, benefiting from the reduction
in external debt service in the light of early debt buyback that took place early this year,
the full liberalization of oil prices in the domestic market, the anticipated reduction in
food subsidies, as well as other revenue-enhancing measures. The estimated deficit
should drop to 4.6% as projected in the 2009 preliminary budget.
2009 Mena Report (www.menareport.com)
Credit: By Al-Bawaba Reporters

Document News
types:
Publication Al Bawaba. London: Feb 1, 2009.
title:
ProQuest 1636378471
document ID:
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OPINION: Looming trouble
Anonymous. Businessline. Chennai: Nov 4, 2008.
Abstract (Summary)
That the textile industry is India's largest employer after agriculture, providing a
livelihood to 35 million, implies that even a moderate drop in exports can have serious
socio-economic consequences. Fluctuating export demand is not the industry's only
problem. The unorganised sector in textiles and apparel, which accounts for three-
quarters of the workforce, is too fragile and inefficient to cope with sudden downturns.
This situation can be remedied by promoting the organised vis-a-vis the unorganised
sector. Scale economies will raise labour productivity, leaving producers with more
resources to cope with shocks. Tax and credit incentives to modernise have started to
show results in textiles, resulting in an investment of Rs 1.05 lakh crore since 2004.
Restructuring and modernisation can cause job losses in the short run, even as it finally
leads to higher employment and productivity. The challenge is to sustain investment and
growth in the sector, while minimising the pain of transition.

Full Text
(447 words)
(Copyright 2008. Financial Times Information Limited - Asia Africa Intelligence Wire.
All Material Subject to Copyright .)
from BUSINESS LINE, November 04, 2008 Recession in the West is set to hit the Indian
textile industry hard. The Apparel Exports Promotion Council expects a 10 per cent drop
in orders due to the slowdown. When factories idle, lakhs of workers may find their
wages pared, thousands may lose their jobs. So severe is the global erosion of consumer
confidence that even a weak rupee is of no help. This has impacted textiles, garments and
yarn output. Textiles account for about 11 per cent of India's exports and 4 per cent of
Gross Domestic Product. Half of India's textiles and apparel output is exported to the US
and Europe. Therefore, the sector is more vulnerable to changes in exchange rate and
OECD-led shocks than most others.
That the textile industry is India's largest employer after agriculture, providing a
livelihood to 35 million, implies that even a moderate drop in exports can have serious
socio-economic consequences. Fluctuating export demand is not the industry's only
problem. The unorganised sector in textiles and apparel, which accounts for three-
quarters of the workforce, is too fragile and inefficient to cope with sudden downturns.
This situation can be remedied by promoting the organised vis-a-vis the unorganised
sector. Scale economies will raise labour productivity, leaving producers with more
resources to cope with shocks. Tax and credit incentives to modernise have started to
show results in textiles, resulting in an investment of Rs 1.05 lakh crore since 2004.
Restructuring and modernisation can cause job losses in the short run, even as it finally
leads to higher employment and productivity. The challenge is to sustain investment and
growth in the sector, while minimising the pain of transition. Given the number of people
involved, this is no easy task. Yet, there is no alternative; workers will lose out, anyway,
if the industry continues to remain fragmented.
Capital can move to productive uses only if workers have the means to cope with
unemployment. The Board for Industrial and Financial Reconstruction has not been
effective in dealing with labour disputes arising out of closure of textile units, as
litigation often drags for years on end. One of the reasons is the absence of a clear-cut
legal and policy framework to deal with closures and unemployment. The fact that
unorganised sector workers have virtually no social security cover to fall back on makes
matters worse, for both labour and capital. The scope of the Textile Workers'
Rehabilitation Fund Scheme (TWRFS) should be enlarged to apply to a larger number of
textile workers. This is a bare minimum, in the absence of social security.
http://www.thehindubusinessline.com/2008/07/24/stories/2008072451492 100.htm
Copyright 2008 Business Line

Document News
types:
Publication Businessline. Chennai: Nov 4, 2008.
title:
ProQuest 1588923191
document ID:
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NextMart Announces Plans to Adopt New Business Direction of Financial Advisory
& Direct Investment
Anonymous. PR Newswire. New York: May 22, 2008.
Abstract (Summary)
The Company's plans to change its main business is a result of ongoing challenges with
its core OEM apparel operations, including (a) A drop in export apparel sales due to
international market conditions; (b) A continually appreciating Chinese yuan, which
makes Chinese exports more expensive to foreign buyers; and (c) An inability to raise
additional financing under the current share price level in order to expand the Company's
domestic direct sales operations.

Full Text
(1130 words)
Copyright PR Newswire Association LLC May 22, 2008
BEIJING, May 22 /Xinhua-PRNewswire-FirstCall/ -- NextMart, Inc. (OTC Bulletin

Board: NXMR), currently a China-based direct sales and apparel OEM company, today
announced that it plans to change its main business to the area of financial advisory and
direct investment in Mainland China.
The Company's plans to change its main business is a result of ongoing challenges with
its core OEM apparel operations, including (a) A drop in export apparel sales due to
international market conditions; (b) A continually appreciating Chinese yuan, which
makes Chinese exports more expensive to foreign buyers; and (c) An inability to raise
additional financing under the current share price level in order to expand the Company's
domestic direct sales operations.
By adopting a new business in financial advisory and direct investment, NextMart's

management believes that the Company can reduce its need for working capital, incentive
key management and position itself to profit from the next wave of domestic and global
financial transactions involving Chinese companies.
About NextMart's New Business
NextMart's new business will consist of financial advisory services and direct investment
activities. For its financial advisory services, the Company intends to become a niche
financial advisor for the privatization of Chinese state-owned enterprises ("SOEs"). The
Company plans to develop and provide a suite of strategic advisory services for corporate
restructuring, business strategy, valuation and financing to Chinese companies wishing to
privatize their businesses and expand their operations globally.
For its direct investment services, NextMart intends to focus on China's high growth
TMT area, particularly the payment sector. The Company already has a base in the
payment sector where it previously developed a land-line telephone-based payment
platform called "NextPay."
NextMart plans to receive strong support for its business transition from Sun Media
Investment Holdings ("Sun Media"), the Company's leading shareholder. It also plans to
receive support from Sun Media's sister investment firm, Redrock Capital Group.
Redrock Capital Group is a set of venture investment and financial advisory firms spun
off from Sun Media in 2007. The firm boasts a network of global investment partners
including Softbank China Venture Capital (SCVC). Its investment banking division,
Morgen Evan Redrock, is a member of M&A International Inc.
( http://www.mergers.net ), the world's largest alliance of privately-owned M&A
investment banking firms. M&A International has 41 members in 39 countries. In 2007,
its members closed over 370 transactions worth US$21 billion.
NextMart has already received a tentative commitment from Sun Media/Redrock Capital
Groups to provide NextMart with two advisory projects that will help jump start the
Company's new financial advisory and investment consulting business. The details of
these two projects are still being finalized. However, NextMart expects to receive cash
and equity-based compensation in the client companies in exchange for its services. For
equity compensation received, NextMart plans to implement a share dividend plan that
will distribute part of its equity shares in the client companies to NextMart shareholders.
Such a dividend plan would be entirely subject to NextMart's obtainment of all necessary
approvals from its board of directors, its shareholders and the relevant listing
authorities/regulatory bodies.
Plans for NextMart's Existing Business
In addition to changing its business direction, NextMart plans to spin off its existing
apparel OEM business and certain marketing/direct sales assets in an attempt to enhance
shareholder value in the short to medium term.
The Company has signed a binding MOU with China Brands Direct, Ltd and Golden
Stone Investments, Ltd, two other China-based direct sales companies, to create
"Shanghai Fashion City Management Co., Ltd" ("SFC" or the "merged enterprise"), a
large-scale home shopping/direct sales company for fashion products in China. Among
NextMart's contribution to the merged enterprise, according to the signed MOU, will be
its existing apparel OEM business and certain direct sales/marketing assets.
Although no formal valuations of the merged enterprise have been conducted yet,
NextMart management expects that the total value of its contribution to be greater than
US$15 million. Such a valuation would be significantly higher than the total market value
of NextMart, Inc., which was approximately US$6.88 million on May 22, 2008 (based on
a closing share price of US$0.08).
The Company and its business partners will attempt to list the merged enterprise on an
international stock exchange in the next twelve months. The parties are in discussions
with advisors and bankers of international stock exchanges in China (HK), Germany and
the United Kingdom.
Assuming the merged enterprise achieves a successful public listing, NextMart plans to
implement a share dividend plan-similar to the one described above to distribute all or
part of its ownership in the merged enterprise to NextMart shareholders. Such a dividend
plan would be subject to the approvals listed above, as well as the terms of the
shareholders' agreement by which NextMart and its partners establish the merged
enterprise, and the terms and conditions of all future agreements with investors of the
merged enterprise.
Mr. Ren Huiliang, CEO of NextMart commented, "We believe that our planned new
business direction in financial advisory and direct investment will reposition NextMart
for steady long-term growth, under the strong support of the Sun Media/Redrock Capital
Groups. We remain committed to our shareholders' cause and appreciate their support
throughout this transition."
NextMart reminds investors that its plans to spin off of the Company's existing apparel
OEM business and to adopt a new business in financial advisory/direct investment will be
subject to certain asset valuations, fairness opinions, and various approvals including, but
not limited to, shareholder approval, debt holder approval, auditor approval, and other
regulatory approval.
As a result of NextMart's recent business developments, the Company will no longer be

able meet its previously-disclosed earnings guidance of US$4-6 million for the fiscal year
ending September 30, 2008. However, management intends to work hard towards
achieving equal, if not higher, profits through its new business in financial advisory and
investment consulting for the first 12-month period of operations following the
completion of restructuring.
This press release includes statements that may constitute 'forward- looking' statements,
usually containing the word 'believe,' 'estimate,' 'project,' 'expect,' 'plan,' 'anticipate' or
similar expressions. Forward- looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from the forward-looking
statements. Factors that would cause or contribute to such differences include, but are not
limited to, continued acceptance of NextMart's product and services in the marketplace,
competitive factors and changes in regulatory environments. These and other risks
relating to NextMart's business are set forth in NextMart's Annual Report on Form 10-
KSB for the period ended September 30, 2007 filed with the Securities and Exchange
Commission on December 31, 2007, and other reports filed from time to time with the
Securities and Exchange Commission. By making these forward-looking statements,
NextMart disclaims any obligation to update these statements for revisions or changes
after the date of this release.
SOURCE NextMart, Inc.
Credit: NextMart, Inc.

Subjects: Acquisitions & mergers, Working capital, Marketing, Market value,
Investment banking, Home shopping, Expansion, Corporate planning
Document News
types:
Dateline: BEIJING
Publication PR Newswire. New York: May 22, 2008.
title:
Source type: Wire Feed
ProQuest 1483075431
document ID:
Text Word 1130
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=PQD
ndian Textiles & Clothing (2006) Profiles Top 21 Major Players Containing Details
about the Company, Products, and Recent Strategies Describing the Management
Business Wire. New York: Dec 5, 2006.
Abstract (Summary)
Contribution of the textile sector to Indian economy is reflected in terms of industrial
production, employment generation and foreign exchange earnings. It contributes about
4% to the GDP, 14% to industrial production, and 16% to India's country's export
earnings. Thus the textile industry plays an important role and is one of the key growth
engines of the economy.
Readers will develop and understanding of growth drivers of Indian Textile & Clothing
Industry along with issues & Challenges, regulatory Issues. It profiles Top 21 Major
players containing details about the company, Products, Recent Strategies describing the
management. This report is a valuable resource for use for developing company strategies
and useful for expansion of business in this rapidly growing industry.
-- Institutes offering textile engineering and courses in Textile & Apparel (NIFT & NID)

Full Text
(384 words)
Copyright Business Wire 2006
Research and Markets
Laura Wood, Senior Manager
press@researchandmarkets.com
Fax: +353 1 4100 980
Logo: http://www.researchandmarkets.com
Research and Markets (http://www.researchandmarkets.com/reports/c46469) has

announced the addition of Indian Textiles & Clothing (2006) to their offering.
Contribution of the textile sector to Indian economy is reflected in terms of industrial

production, employment generation and foreign exchange earnings. It contributes about
4% to the GDP, 14% to industrial production, and 16% to India's country's export
earnings. Thus the textile industry plays an important role and is one of the key growth
engines of the economy.
This Industry Insight answers the following key questions:
-- What are the major sectors and trends in Indian textile & Clothing Industry?
-- What is the Men's and women's apparel contribution to the total apparel market in
India?
-- Global & Indian Scenario of Textile Industry?
-- What are the Growth Trends, Segments, Consumer Behavior, Branding and Apparel
Retailing?
-- What are the export opportunities, present scenario in International Trade and WTO
developments for?
Readers will develop and understanding of growth drivers of Indian Textile & Clothing
Industry along with issues & Challenges, regulatory Issues. It profiles Top 21 Major
players containing details about the company, Products, Recent Strategies describing the
management. This report is a valuable resource for use for developing company strategies
and useful for expansion of business in this rapidly growing industry.
This report is beneficial for
-- Retailers like Wal-Mart
-- Multi National textile companies outsourcing from india
-- All major players in india across the value chain
-- Regulators
-- Indian associations
-- Traders/Distributors
-- Suppliers and intermediaries
-- Export houses
-- Institutes offering textile engineering and courses in Textile & Apparel (NIFT & NID)
Content Outline:
1. Executive Summary
2. Highlights
3. Industry Overview
4. Clothing and Apparel
5. International Trade
6. Growth Drivers
7. Issues and Challenges
8. Regulatory Issues
9. Major Players
10. Outlook
Companies Mentioned:
Madura Garments (Indian Rayon)
Arvind Mills Ltd
Raymond Ltd
Alok Industries Ltd
Welspun India Ltd
Bombay Dyeing
Abhishek Industries Ltd.
Sangam India Ltd
Provogue India Ltd
Wills Lifestyle (ITC)
Gokaldas Exports Ltd
Indo Rama Synthetics (India) Ltd
Vardhman Textiles Ltd
Bombay Rayon Fashions Ltd
S Kumars Nationwide Ltd
Suryalakshmi Cotton Mills Ltd
Century Enka Ltd
Krishna Knitwear Technology Ltd
RSWM Ltd
SRF Ltd
GHCL Ltd
For more information visit http://www.researchandmarkets.com/reports/c46469

Document Release
types:
Dateline: DUBLIN, Ireland
Publication Business Wire. New York: Dec 5, 2006.
title:
Source type: Wire Feed
ProQuest 1174493531
document ID:
Text Word 384
Count
=PQD
CENTRAL AMERICA/CARIBBEAN: Apparel faces challenges

Oxford Analytica Daily Brief Service. Jul 19, 2005. pg. 1
Abstract (Summary)
Outlook for the apparel sector in Central America and the Dominican Republic.
The apparel sector has contributed to the expansion of manufacturing exports and
employment in Central America and the Dominican Republic since the beginning of the
1990s. However, the entry of China to the WTO, and elimination of quotas in the apparel
sector, may reduce its impact in the near future.

Full Text
(1213 words)
Copyright Oxford Analytica Ltd. 2005. No publication or distribution is permitted
without the express consent of Oxford Analytica.
SUBJECT: Outlook for the apparel sector in Central America and the Dominican
Republic.
SIGNIFICANCE: The apparel sector has contributed to the expansion of manufacturing

exports and employment in Central America and the Dominican Republic since the
beginning of the 1990s. However, the entry of China to the WTO, and elimination of
quotas in the apparel sector, may reduce its impact in the near future.
ANALYSIS: Until the 1980s the apparel sector in Central America and the Dominican
Republic was small and primarily concentrated in domestic and regional markets. For
example, in Costa Rica, textiles and apparel only accounted for 10.3% of total
manufacturing production in 1970 and 7.8% in 1980. Exports to third countries were
negligible. Apparel production was relatively inefficient and depended on high levels of
protection.
Since the 1980s in Costa Rica and the Dominican Republic, and early 1990s in the rest of
Central America, apparel production for export increased substantially:
Between 1990 and 2003 exports of man-made fibre products from Central America to the
United States increased from 798 million dollars to 7.1 billion dollars.
In 2003, textiles and apparel represented 55% of total exports from Central America and
the Dominican Republic to the United States.
Apparel is a major source of employment in the region. For example, in the Dominican
Republic, there were over 119,000 people working in apparel production in free trade
zones in 2003 ( see CENTRAL AMERICA/CARIBBEAN: Trade zone pros and cons -
March 24, 2005 ). In Central America, the textile and apparel sectors have created over
380,000 jobs.
In Central America there are over 960 firms that produce textile and apparel products,
mostly located in free trade zones.
Apparel production in Central America and the Dominican Republic in the 1980s
benefited from provision 807 in the US trade regime, which established that all apparel
assembled from US-made and cut textiles only had to pay duties for the value added
generated outside the United States. The expansion of apparel exports also benefited from
incentives established in the 1980s under the Caribbean Basin Initiative:
In 2000 the US-Caribbean Basin Trade Partnership Act expanded preferential treatment
to apparel products that used inputs cut in the Caribbean Basin.
It also allowed for duty-free import of a limited amount of apparel made with fabric
produced in the Caribbean Basin.
Apparel production for export has been particularly important in Honduras, the
Dominican Republic and -- more recently -- El Salvador and Guatemala. In Costa Rica,
apparel production and exports have decreased since the mid-1990s as the country has
succeeded in attracting foreign direct investment from Intel and other large multinational
corporations. Nonetheless, it remains the third largest export sector after fresh primary
products and electronics.
Chinese threat Despite significant success during the 1990s, the apparel sector in
Central America and the Dominican Republic has been losing market share in the United
States in recent years. This has been particularly acute in Costa Rica and the Dominican
Republic. In the Dominican Republic market share declined from 3.8% to 1.6% between
1997 and 2004. One of the main reasons for this is increasing competition from China
and other Asian producers like Bangladesh, which are expanding their share of imports to
the United States. China's share of US apparel imports increased from 7.9% in 2000 to
13.8% in 2004 with a particularly large expansion in sectors that no longer have quotas,
such as babies' garments and brassieres.
China's success in textile and apparel relative to Central America is the result of a lower
cost structure:
China pays lower wages. In 2002, hourly labour costs, including benefits, were between
0.70 and 0.90 dollars in China, compared to 2.7 dollars in Costa Rica, 1.7 dollars in the
Dominican Republic, 1.6 dollars in El Salvador, 1.5 dollars in Guatemala and Honduras
and 1.00 dollars in Nicaragua.
China benefits from higher productivity. According to some estimates from US apparel
firms, Chinese firms are up to 50% more productive than their counterparts in the
Caribbean Basin.
China has also benefited from an integrated textile sector that uses cheap domestic yarn
and other inputs. For example, the cost of fabric for the production of a pair of men's
jeans -- the single most expensive item -- is 2.2 dollars in China, compared to 3.2 dollars
in Nicaragua (which has to import inputs from the United States).
The threat from China has increased in 2005 with the elimination of textile quotas from
January 1. In the first four months of 2005, Chinese exports of apparel to the United
States increased in value by 79.4% -- 105.4% in quantity -- compared to the first four
months of 2004.
CAFTA response All governments in Central America and the Caribbean have
supported the creation of the Central American Free Trade Agreement (CAFTA) with the
United States as a way to deal with Chinese competition ( see CENTRAL AMERICA:
Pressure mounts for CAFTA approval - January 21, 2005 ). Governments and producers
believe that CAFTA will help apparel exports from the region in several ways:
CAFTA will make permanent duty-free access for apparel from the region, thus reducing
the uncertainty of a unilateral system of preferences.
It will simplify the export regime, which is relatively cumbersome under the Caribbean
Basin Trade Partnership Act.
The United States will not be able to impose safeguard quotas on apparel exports from
Central America. It has already imposed some on Chinese apparel in 2005.
CAFTA will allow for an expansion in the duty-free use of yarn and other inputs from
Mexico and Canada, thus encouraging the integration of apparel production in the region.
However, CAFTA may be an insufficient response to competition from China and other
East Asian countries for several reasons:
Most apparel exports from Central America and the Caribbean already enter the United
States duty-free. In 2003 over 80% of apparel exports (measured in square metres
equivalent) from the Dominican Republic, Costa Rica, Honduras and El Salvador entered
the United States through a preferential programme.
CAFTA maintains restrictive rules of origin. In most cases duty free access to the United
States will only apply to apparel products made with yarn produced in the region.
Therefore, Central American countries generally will not benefit from cheap textile
inputs produced in China and other East Asian countries.
Given the lack of a tradition of textile production, and high electricity costs in Central
America and the Dominican Republic, it is unlikely that US firms will reallocate the
production of cloth, yarn and other textiles to these countries.
Outlook CAFTA´s approval in the Costa Rican National Assembly and US Congress is
still uncertain ( see CENTRAL AMERICA: Internal politics delays CAFTA - May 12,
2005 ). Even if CAFTA is finally passed, it may be insufficient to secure long-term
growth of apparel production in Central America and the Dominican Republic. The
region may need to concentrate production in specific niches such as seasonal apparel
products that require quick turnaround.
CONCLUSION: Apparel production has contributed to the expansion of manufacturing

exports and employment in Central America and the Caribbean during the past two
decades. Export competitiveness has been based primarily on low wages and preferential
access to the US market. However, the inability to develop long term capabilities,
including design and marketing, has left the sector in a precarious position to confront
competition from China and other East Asian producers.

Subjects: Forecasts, Clothing industry
Classification 8620 Textile & apparel industries, 9173 Latin America
Codes
Locations: Central America
Document News
types:
Publication Oxford Analytica Daily Brief Service. Jul 19, 2005. pg. 1
title:
Source type: Report
ProQuest 1688006901
document ID:
Text Word 1213
Count
=PQD

The Export Challenge

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