At a recent meeting in Shenzhen, Xia Baolong, director of the Hong Kong and Macao Work Office of the Communist Party of China Central Committee, put forward the “six needs” and “three beliefs” to the Hong Kong business community. This not only is a guideline for the Hong Kong Special Administrative Region but also reflects the central government’s care for the city. The textile and garment industry always “speaks with action”, strives to promote Hong Kong’s economic development, and tells the story of the country and HKSAR well to audiences around the world.

In this regard, following the signing of a memorandum of understanding by the China National Textile and Apparel Council (CNTAC), the ASEAN Federation of Textile Industries (AFTEX), the Textile Council of Hong Kong and the Hong Kong General Chamber of Textiles in March 2024, a Hong Kong delegation was organized to visit Singapore in November in support of the Asia Pacific Textile and Apparel Supply Chain Expo and Summit, organized by AFTEX and CNTAC, in which I was a keynote speaker. The event gathered 150 textile and apparel supply-chain enterprises from 18 countries and regions, including 88 Chinese and 62 overseas exhibitors, and attracted more than 1,000 textile and apparel buyers, resellers, importers and exporters, and cross-border e-commerce merchants from all over the world.

Emergence of Asian brands

The key message I delivered in my speech was that it is my firm belief that Asian brands are set to emerge, which represents a crucial opportunity for Chinese brands and the Asian supply chain.

China and the Association of Southeast Asian Nations (ASEAN) is the world’s garment factory. We operate the entire manufacturing portion of the supply chain, from yarn and fabrics to garments, and account for around 50 percent of the world’s apparel exports. However, in the whole supply chain, development and branding have the highest value. Branding, in particular, is highly profitable, with the initial markup as much as five times of the production price, and also has the biggest say of all links in the supply chain.

The opportunity is knocking loud and clear on Asia’s door. Mainland brands should use Hong Kong to go to ASEAN; and ASEAN brands should use Hong Kong to go to the Chinese mainland. I have full confidence in the vision of “Asian brands for Asia, Asian supply chain for Asia” and ultimately, “Asia Brands for the World”

But currently, the world’s apparel market, including that of Asia, is dominated by European and American brands, with only a handful of Asian brands having penetrated the international market. The good news is that Asia’s middle class, which likes and can afford brand products, is rising. In particular, the number of ASEAN’s middle-class households is forecast to increase to 137 million by 2030. Asian brands, with better understanding of the local market, culture and Asian size specifications and requirements, as well as increasing sophistication, are bound to grow. In future, it will be a three-way division of the world market by European, American and Asian brands. The only question is which Asian brands can step forward to capture the opportunity. In this regard, I have long advocated that mainland brands can become the winners using Hong Kong as its springboard to going out to capture the ASEAN market.

I also urge the Hong Kong and ASEAN textile and garment industries to shift their focus from our traditional market, i.e., Europe and US, to Asia. Amid the volatile global geopolitical situation, the Asian market will be our new blue ocean. We have the complete supply chain in Asia, we can produce for Asian brands, and can utilize Hong Kong’s advantage of being a superconnector to develop the Asian market together with the brands.

Not only that, but many Chinese brands are very eager to expand beyond their local market, and as far as I know, many ASEAN brands are also interested in entering the mainland market. Hong Kong companies have rich business networks and operational experience on both the mainland and in ASEAN, and can serve as the connecting point in capturing the new market opportunities with a win-win for all three parties.

Cross-border e-commerce importance

It should also be noted that Asian integration will speed up, as there will eventually be zero tariffs applied to more than 90 percent of goods traded within the Regional Comprehensive Economic Partnership (RCEP) region. With changes in consumer purchasing habits, especially since the outbreak of the COVID-19 pandemic, and rising cross-border e-commerce, it will be easier for Chinese and ASEAN brands to go beyond their own markets and put themselves onto the Asian stage. According to Statista, the e-commerce fashion market in Asia could be worth $350 billion in 2024 and is expected to exceed $500 billion by 2029. Hence, cooperation with e-commerce platforms is essential for branding success.

In fact, a number of Asian cross-border e-commerce platforms such as Shein, Alibaba, and Temu are rapidly opening up overseas markets with digital means. For example, Shein — which focuses on fast fashion and whose brands are designed to fit the body shapes of Asians, made of materials suited to Asian climates, and with attractive pricing — has been popular among consumers, and has already surpassed European brands in terms of market share. Cooperation with cross-border e-commerce platforms will be the trend for Asian brands in the new era.

Meanwhile, the HKSAR government’s 2024 Policy Address proposed to develop Hong Kong into a logistics and distribution center for cross-border e-commerce, which will help Asian brands to develop cross-border e-commerce business. This will strengthen Hong Kong’s role as a superconnector. Indeed, according to a survey conducted by the Hong Kong Trade Development Council, about 90 percent of Japanese companies visiting Hong Kong plan to develop RCEP businesses through Hong Kong, and consider the city, with its strong international connections, as the preferred platform for RCEP development.

The opportunity is knocking loud and clear on Asia’s door. Mainland brands should use Hong Kong to go to ASEAN; and ASEAN brands should use Hong Kong to go to the Chinese mainland. I have full confidence in the vision of “Asian brands for Asia, Asian supply chain for Asia” and ultimately, “Asia Brands for the World”.

The author is a member of the 14th CPPCC National Committee, honorary chairman of the Textile Council of Hong Kong, and permanent honorary chairman of the Hong Kong General Chamber of Textiles.

The views do not necessarily reflect those of China Daily.