Go east, future catalog merchants

Jun 01, 1998 9:30 PM  By

As a catalog merchant during the 1980s, I was constantly educated, romanced, and amazed by the color and creativity of the artistry from major European markets such as Milan, Paris, and London. But new markets for goods are beginning to open up in the Far East. As we move ahead into the next century, these nations will provide merchants with more new designs, improved quality, and lower costs.

Back in the ’80s, most products imported from the Far East were either goods indigenous to the cultures or inexpensive trinkets. Catalog buyers seeking high-end gifts and home products relied on Europe. For instance, the Paris shows provided unusual jewelry, dolls, and Limoges porcelain, while the Macef Fair in Milan offered fine handpainted Italian ceramics.

But the perception of goods from the Orient started changing more than 10 years ago, as importers began shifting their sights to the Far East. The Four Tigers-Hong Kong, Singapore, Taiwan, and South Korea-were so named for their fast economic growth, spurred by exports. Much of the growth came from inexpensive labor and mass production, though many manufacturers sacrificed a certain amount of creativity and style for speed and savings.

Eastern manufacturers produced products ranging from metalware and Christmas accessories to glass and porcelains in larger numbers at lower costs. These suppliers quickly overran the market and became the key home furnishings source for major retailers, which were trying to cater to the demands of increasingly price-sensitive consumers during the recession. Almost before anyone knew what had happened, the lower-cost and mass-produced goods became the norm, while the lovely handcrafted items from Europe in high demand only five years earlier were now exclusives, available at much higher prices.

Yet despite the increased number of Eastern suppliers that have cropped up in recent years, many Asian countries are still economically and politically unstable. In Thailand, for instance, three-quarters of the labor force still work in agriculture. To truly compete, the government needs to offer incentives to persuade workers to leave the fields. At the same time, Hong Kong, with its dearth of space and cost-prohibitive economy, has become merely a service center for the rest of China. And South Korea, plagued by political problems, has stalled after a strong start as a merchandise supplier.

The Cubs and the Dragon Other merchandise sources are emerging in the East, though, nations we call the Tiger Cubs. Malaysia, for one, has become the main exporter of pewter. Made of tin-one of the three commodities for which the Malay Peninsula was invaded by nearby Japan during World War II-pewter is a mainstay in home decor. Malaysia is also a large exporter of wooden products, such as salad bowls and furniture.

Indonesia, the youngest of the Cubs, provides such items as dinnerware, baskets, furniture, and flatware, among other products for the home. Taiwan, no longer able to produce goods as cost-efficiently on its own, has made Indonesia home to several production companies that manufacture products and materials such as resin, wood, and textiles. And from Thailand, imports include dinnerware, furniture, wood accessories, and textiles.

The Philippines spent many years as an underproducer, but it is now exporting a substantial supply of Christmas ornaments, mostly due to the low labor costs and the high Catholic population, which creates a natural empathy for this category. The Philippines also produces wrought-iron and teak items. Though still struggling, mostly with the lack of necessary shipping supplies, the country is reaching for a higher share of the marketplace.

In China, the largest of the Far East nations, Deng Xiaoping’s return to power in 1978 initiated reforms that set the wheels in motion for today’s booming economy. This is a sharp contrast to the artistically suffocating reign of Mao Zedong, during which artists and craftsmen were “reeducated” to become “more useful” members of the Communist society.

Only after reforms could China, the Sleeping Dragon, awaken. Now it is a powerhouse of manufacturing, quickly surpassing the output of all other Asian nations, including the Four Tigers. By 2015, China’s gross domestic product will surpass that of the U.S. And even more remarkable than its conquest of manufacturing is China’s return to artistic quality.

Looking ahead to the next millennium, we can’t ignore China’s power as a merchandise exporter. The country has enjoyed a yearly 10% growth in manufacturing for more than 10 years, with a return to excellence in design and skills, and a newfound ability to listen to the voice of the world market and meet the demand for goods.

Primary home merchandise now sourced in China includes rugs, textiles, furniture, dinnerware, Christmas ornaments and accessories, lamps, porcelains, candles, silk flowers, toleware (painted metal accessories), and glass. If it can stay on top of the trends of the marketplace, China is poised to grow into the mature leader of the import-export industry.

Up-and-coming India Many buyers have fallen in love with India’s rugs and textiles, but political unrest from a Socialist regime slowed exporting throughout the late ’80s. Only recently has India regained its position, primarily thanks to more sophisticated production techniques and less ethnicity in styles and patterns. Moreover, the sheer size of India’s population (890 million people), its now-democratic government supporting free market capitalism, the increasing use of the English language, the burgeoning computer industry, and its natural resources have transformed India into a manufacturing force.

Today India is exporting more than ever, although despite vast improvements, it is still battling many of the same production consistency problems as 20 years ago.

But the merchandise selection and quality may outweigh some of the production headaches. Products imported from India, such as aluminum alloy serving ware, silverplate tea and coffee sets, and other tabletop items, are better than ever, probably because suppliers now have more manufacturing and exporting experience.

In fact, the majority of beaded items we’ve seen recently in many home decor catalogs are imported from India. So are many of the candlesticks showing up in stores and catalogs. And despite the increase in hard goods, textiles have been and will continue to be a major import from India. Look at the covers of recent catalogs from upscale Neiman Marcus and you’ll see photographs of fantastic high-end bedding. While much of the product is designed in the U.S., most of the high-ticket domestic goods are manufactured much more affordably in India.

European influence Even as catalog buyers scramble to find the next great source for unique products and lower manufacturing costs, it’s safe to say that Europe will always be a major force in exporting trends and crafts, and in supplying high-end, exclusive home goods. The best of many categories, such as linens and crystal, can still be found only in Europe, and some consumers-particularly now, with the strong economy-will continue to demand authentic European products and designs. So even though Europe can never compete economically as a merchandise source compared to Asia, it will continue to have the upper hand creatively.

But it’s good news for the catalog industry that some countries, China and India in particular, have now turned their attention to improving the quality of the goods they produce yet are still keeping costs reasonable. Product trends come and go, but high-quality, unique goods available at a fair price will always be in fashion.