China International Hardware Show set to kick off in Shanghai
The China International Hardware Show will get underway on Sept. 17, kicking off at a time when many American home channel retailers and manufacturers are stepping up their plans to add foreign-sourced goods to remain competitive.
Exhibitor attendance has grown steadily in the show’s past six years, according to organizers, rising from 700 exhibitors in 2002, to 1,420 in 2005; and to 1,821 last year. This year’s show is slated to include around 2,000 exhibitors. Buyers from Home Depot, Kingfisher, Ace Hardware, LG Sourcing and a host of others are expected at the three-day event, which takes place in the major sourcing hub of Shanghai.
Steve Skells, an Ace Hardware buyer for the co-op’s international markets, will attend the show, with an eye on building distribution capabilities to the co-op’s international branches.
“The China International Hardware Show is an opportunity for Ace to develop programs that will be stocked in our Shanghai warehouse to distribute to our international retailers,” he explained. “We work with the attending factories to develop assortments in Ace label or other control branded packaging.”
House-branded products are one area of expansion at a number of home channel companies. Orgill’s global sourcing department, for example, has grown from around 1,000 skus in 2001 to 7,000 at the buying group’s most recent market.
Jim Wilson, Orgill’s vp-worldwide sourcing, said the program has grown based on customer demand for value-priced products across categories.
“Our customers understand the opportunity for them to be more competitive and make better margins,” he said.
But aside from cost issues and house-branding, foreign-sourced goods have played additional roles at home channel retailers in recent years. Robert Hull Jr., executive vp and CFO for Lowe’s, recently said that a greater assortment of foreign-sourced goods was a major factor in helping the retailer fight back inflation in the past year.
“It’s kind of a mixed bag, when you think about inflation as relates to our product,” he said, addressing investors at the company’s second-quarter earnings call. “You’ve got some price increases, you’ve got a greater mix of foreign-sourced goods, and that has a net deflationary impact.”
This year’s China International Hardware Show, a joint effort between Koln, Germany-based trade show organizer Koelnmesse and the China National Hardware Association, will be held at the New International Expo Centre in Shanghai’s Pudong business district.
Anumber of learning sessions are planned for the show, with a special focus on international import/export issues and procurement policy. Session topics include:
• How buyers can best choose international suppliers and techniques for export trade, with representatives from Hangzhou, China-based Alibaba, a business-to-business trading service.
• An overview of B&Q’s procurement policy for interested vendors, including the retailer’s standards and process for buying goods for its Chinese, Taiwanese and British stores.
• Lessons in “how to deal with unfair legal situations in export trade,” with trade lawyer Qiao Yu.
• Worldwide trends and demand for kitchen and bath products, with an international panel of experts on the topic.
• Alfred Zhou of GfK Market Consulting will speak on “The Evolution of China’s Power Tool Market.”
The Chinese consumer
While most buyers, especially those from the United States, will be interested in expanding or changing their assortments of foreign-source goods, others will be keep a close eye on the emerging DIY consumer market in China.
Currently, the home improvement market in China is hard to pin down — estimates are wide, ranging from a consumer market of $15 billion to $40 billion, with growth rates predicted from 10 percent to 20 percent, according to the China National Hardware Association and show organizers.
According to China’s national customs data, the value of all machinery products imported into China – a category of products that includes all tools and hardware – grew 16.5 percent year-over-year to $404.27 billion in 2007.
Several American and European retailers have entered the Chinese DIY market in recent years. In addition to its greater attention to adding China-made goods to its product assortment in the United States, Orgill turned an eye to the Chinese consumer as far back as 2000, when it began selling goods through British retailer B&Q, which has one of the largest big-box DIY presences in China. Home Depot’s relatively small number of locations in China — just 12 stores that opened in 2006 — still saw double-digit comparable-store sales growth, compared with a drop of 7.9 percent in overall comp-store sales at the retailer in its most recent quarter.
But the Chinese consumer market still involves a lot of stops and starts. Home Depot has been tentative about its expansion plans there, while B&Q is in the process of reworking its store network in the country. B&Q, in fact, said it plans to close five stores and downsize three of its 62 stores in the country. Second-city and smaller markets in China have proved particularly tough, the retailer has said. In summarizing its current state of business in China, B&Q parent Kingfisher noted in its most recent financial statement, “China remains an important market opportunity for Kingfisher, and we have built a leading position. E We have concluded that after several years of rapid growth, B&Q China now needs a period of consolidation to strengthen the business,” the statement reads.
But whether continuing to test the Chinese consumer market or finding sourced goods for back home, the buyers and exhibitors from more than 80 countries that will be at the show represent a marketplace reaching far deeper than merely in China and the United States. Exhibitors from all of Asia, as well as from Africa, Europe, South America and North America are expected to attend. A handful of United States-based manufacturers will be on hand at the show as exhibitors, including hand tool and electric tool manufacturer D-Cut Products; hand tools maker Malco Products; consumer product testing giant OnSpex and building products and decorative hardware company Wellsco International.
The show, to be held in Shanghai’s New International Expo Center in the city’s Pudong business district, will run from Sept. 17 to 19.
PhibroWood names new president
Phibro Animal Health announced that industry veteran Dave Fowlie has been named president of PhibroWood, the company’s wood preservative subsidiary.
Fowlie, with more than 20 years experience in marketing and sales of wood preservatives, was promoted from his position of executive vp-PhibroWood. Prior to that, he worked for Viance and its predecessor, CSI, finishing his time there as vp-business development.
Fowlie will report to Dwight Glover, PhibroWood’s president, industrial and building products — part of Phibro’s performance products business.
“I am very excited to be taking on this new role with PhibroWood,” Fowlie said. “The company’s technology, together with the commitment of our employees and aggressive ambitions of our leadership, puts PhibroWood in a strong position for growth.”
IKEA to open new DC in Tacoma, store in Denver
IKEA is set to open a new distribution center in Tacoma, Wash., next week, which eventually will serve the retailer’s big-box stores in the northwestern United States.
The 834,000-square-foot DC will open on Sept. 17, with a special grand opening celebration. Washington Governor Chris Gregoire will attend the event, which will include a “traditional Swedish log-sawing” and a flag raising ceremony.
Goods moving through the Port of Tacoma will be distributed through the center to stores in Draper, Utah; Renton, Wash.; and Portland, Ore.
The distribution center is set to employ around 125 people, according to the company. Eventually, the store will expand to 1 million square feet.
In related news, the Swedish home decor and furnishings giant IKEA said it plans a new store in Centennial, Colo., a suburb of Denver.
This would be IKEA’s first store in Colorado, expanding the retailer’s presence in the Rocky Mountain region, according to a statement from IKEA.