New trends, new consumers forecast for Shanghai show

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 Cologne, 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.

A number 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 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-sourced 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 th