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Understand the risks before tackling China

Paul Alger, Director of international business development, UK Fashion & Textile Association.

Over the past 18 months, much has changed in China. However, what hasn’t are the frequent conversations the industry is having about this rapidly expanding economy. There are great opportunities to be had but understanding the challenges of this massive market is key.

Foremost is the issue of trademark squatting, which is rife in China at every level of industry. Nowadays any UK company, large or small, exhibiting at an international trade show, promoting itself on a website or approaching China in any way, needs to register its trademark, designs and any relevant patents.

Lots of smaller companies, especially designers, put off doing this because of the cost but this exposes them to huge risks, especially in China, which is a ‘first to file’ country when it comes to trademarks.

This almost always leads to huge potential problems and costs later. My advice is bite the bullet and do it now. If you do not own the rights to your name in China, someone else potentially owns your business there.

The other big issue is that there are still comparatively few real multi-brand stores in China. Chinese consumers are accustomed to buying at single-brand standalone shops or luxury department stores. High-end designers can work through Lane Crawford, Joyce and IT Group but there are fewer options in the mid-market.

This is changing very slowly. Hong Kong trade show The Hub has signed an agreement to work with young fashion fair Chic Young Blood to promote the development of multi-brands in China, suggesting there is an appetite for the model.

In the meantime China is still uncharted territory - research, IP protection and a cautious approach are advisable.

Money up front is essential in most cases. Things in China have a habit of moving fast, and the British businesses have to be ready for it.

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