JIAMIN YAN
DA YOUNG LEE
& HONGKONG
INTRODUCTION The Alexander Wang and Hong Kong project focuses on the importing activity between the company and the country. By exploring the overall situation of the region, we determine the importing products as well as whole importing process.
CONTENTS PART I: THE CASE STUDY IMPORTER
1
PART II: THE IMPORTED PRODUCTS
3
PART III: EIGHT STEPS OF IMPORT BUYING PLAN
5
STEP I Country Profile
7
STEP II Country Analysis
11
STEP III Country’s Business Etiquette
13
STEP IV Importing Trade Agreements, Laws, and Policies
17
STEP V Classifying the Import
18
STRP VI Cost Sheets
19
STEP VII Shipping Route
21
STEP VIII: Finalize the entry process of the imported item
23
2007 launch of first woman’s wear collection
2008 Launch of woman T by Alexander
2009 Footline for T by Alexander Wang women’s
Footline for T by Alexander Wang women’s
2011 First flagship store opened in SoHo, New York Launch of men’s ready to wear
2013 The first crowd- sourced bag was created by collaborating with Samsung Electronics
2014 Collaborating collection with Swedish based fashion retailer H&M Denim X AW
PART I
2010
THE CASE STUDY IMPORTER
T
he New York based brand was launched by Chinese American designer Alexander Wang, after his two years study in Parsons. It began with a woman’s knitwear collection in 2007 and first time be presented to public on New York catwalk in Fall 2007. After designer won the CFDA Fashion Fund in 2008 with $20,000 award. The business had been expended with a new launch handbag line. The launch of both woman and man T by Alexander wang was followed a year later. After 2008, which can be seemed as company’s turning point. Through an energetic show during Fashion Week, public saw Wang’s ability to merge rock grunge, casually downtown style with eighties. In order to fund Art Start, a New York based charity that uses arts to help youth and creative talents. Alexander Wang collaborated with Samsung Electronics in 2013 and produce the world’s first crowd- sourced bag which is a drawstring backpack made of lambskin. In 2014, Wang launch the official denim line at New York store and U.S online site after a few days the release of five controversial Denim X Alexander Wang’s campaign images. Wide range of products have been provided by the brand which includes women's and men’s ready to wear, denim, handbags, shoes, jewelry , eyewear and accessories.
2
PART II THE IMPORTED PRODUCTS
Alexander Wang official website: www.alexanderwang.com/ Their products are divided by Ready to Wear, T by Alexander Wang and accessory lines. Alexander Wang has a denim section which is made in the USA with different styles and colors. Overall, their products are simple and have clean edges at the end of the items with monotone colors. According to the shipments report in Panjiva, most garments are made in the USA, but accessories, especially leather goods, are exported. Among many products, the top product of Alexander Wang Inc. is also “leather” that appears in 222 shipments that are to go to foreign destination port, and the second product is “handbag” that includes around 134 shipping items. Most arrival ports are in New York, New Jersey, and Los Angeles. Plus, Hong Kong is the best departure port at 315 of 371 shipments (figure. 1).
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PART III EIGHT STEPS OF IMPORTING BUYING PLAN In order to develop the plan to import merchandise from HongKong, we divided it into eight steps of buying activity. Firstly we explored the selected region by the overview of the region, the SWOT analysis and the business etiquette we need to pay attention to. Secondly, we studied the trade agreement between the U.S and Hong Kong and HTS for our selected products. Thirdly, we got connected with the manufacturer and determined the cost sheet as well as our shipping route. Finally we prepared all the imported documents for the import activities.
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Social / Cultural
territory for at least 50 years.and eco-
The culture of Hong Kong has a merge
nomics, and continue to attend interna-
of the foundation from China and in-
tional activities as a dependent territory
fluence from British colonialism, as In
for at least 50 years.
1842, Hong Kong was given as a colony
STEP I CoUNTRY PROFILE
Traits of the country
to Great Britain from China for over
Economic
150 years as the result of losing the first
After returning to China in 1970, Hong
Opium War. The island is mainly filled
Kong is granted a special administrative
with Cantonese, and few British, Indi-
region of PRC which means it is allowed
ans and Jews. Cantonese culture is the
to have its own currency. The low taxa-
mainstream on land, thus most Chinese
tion in the city, nearly free port trade and
traditions have been kept and meanwhile
well-developed international financial
people adopt Western lifestyle.
market are directly linked to its position
of world's leading international financial
Political
centre.
Hong Kong as a special administrative region status has been guaranteed the
Geographic
implementation of the policy of the “ one
The area is totaled in 2754 square km
country, two system�. Which means the
which is smaller than Rhode Island in the
executive power is owned by the gov-
U.S. It consists of three main territories:
ernment. By having autonomy, they are
Hong Kong Island, Kowloon Peninsula,
allowed to retain their own legislature,
and the New Territories. Hong Kong is
and economics, and continue to attend
located in Eastern Asia, bordering the
internation al activities as a dependent
South China Sea and Mainland China 8
Labor
minerals in the onshore area
The number of total laborers was
Unexpectedly, Hong Kong has numer-
3.88 million in 2014; men were 51.3
ous mineral areas. First, metalliferous
percent and female were 48.7 percent
minerals usually can be divided into
of them. This is represented by 61.1
four factors; tin-tungsten-molybde-
percent of the total population and the
num, copper-lead-zinc, iron mineral-
age was 15 and over.
ization, and placer deposits of tin and gold which are largely concentrated on
STEP I CoUNTRY PROFILE
Contributing facts
According to the Hong Kong Govern-
this diversity of minerals with faulting
ment, the labor standards are not only
activity. Non-metalliferous minerals
enhancing employees’ rights and ben-
are commercially exploited with kaolin
efits, but also keeping up their safety
clay, feldspar, quartz, beryl, and graph-
and health through labor registration.
ite.
The labor force refers to a person who
- Quarried rock and building stone
has been at work for pay or profit in
Granite and volcanic rocks have been
7 days on a non-institutional level or
quarried in each local area as road base
who can get a job attachment.
metarials, such as metal, riprap, and armour stone and asphalt for many
Inputs
years. Now, the granite is located at
There are three main categories of
Lam Tei, Shek O and Anderson Road.
inputs of Hong Kong;
- Additional inputs
- Metalliferous minerals and
Offshore sand deposits, forest, and
non-metalliferous in dustrial
wildlife
Products
Transportation
There are about 15,000 products from 13,100
Hong Kong is a 1,105 square kilometers’
suppliers of different product lines.
land area and has more than seven million
Fashion: fashion & accessories, bags & foot-
population. It is also one of the good places
wear, fabrics & materials, health & beauty,
to come for trips and shopping, over 12.5
jewelry, watch & parts
million passengers. So the public transport
Electronics & Telecom: audio & video, elec-
are established well for them, including
tronic security, personal electronics & games,
railways, trams, buses, minibuses, taxis and
telecom products
ferries.
General merchandise: electrical, giftware, home furnishing/décor, Housewares, pre-
Business Climate
miums/novelties, recreation/sporting goods,
Hong Kong has a “wide open” business
seasonal items/crafts, stationery/office, toys
climate with a free market, but under the
& games
government involvement. The business is
Computers & Electronics: networking, PCs
similar with a style of the United States,
& peripherals, electronics components tele-
like having to be competitive, quick, and
communication products
honest. The main goal is making money.
Hardware & Machinery: automotive, ma-
Hong Kong is an ideal place to do business
chinery, industrial supplies, home center/
among Asian countries, because of the
DIY
institutional framework, location and flex-
Electronic Components: active & passive
ible working environment. These factors
components, electromechanical & intercon-
are making a high potential growth rate in
nect, manufacturing supplies & subsystems,
business.
production/test equipment & services
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Effects of quota removal The removal of quotas in textile and clothing streamlines business and brings better results in the process of world manufacturing for consumers as per the World Trade Organization’s schedule. According to the Hong Kong Development Council research paper from 2015, It makes importers and retailers offer the best products. In addition, this system leads to a reduction in resource locations for quota elimination from over 30 to around 10, and it helps importers lower administrative costs when ordering to a large number of resources. Consumers also can gain greater benefits from quota removal premiums and lower prices.
ALEXANDER WANG Holdings Limited and its subsidiaries are dedicated to conducting their operations throughout the world on principles of ethical business practice and recognition of the dignity of workers. We expect our business partners to respect and adhere to the same standards in the operation of their business, and we will utilize these criteria to evaluate our relationships with customers and suppliers. This Code of Conduct is available on the Supply Chain Disclosure page of our website at www.alexanderwang.com and may be updated from time to time. WAGES/BENEFITS/WORKING HOURS. Our business partners must comply with all laws regulating local wages, work hours and benefits. Wage and benefit policies must be consistent with prevailing national standards, and also be acceptable under a broader international understanding as to the
STEP I I CoUNTRY ANALYSIS Alexander Wang Holdings Limited and Subsidiaries Code of conduct for business partnersA (As of July 17, 2014)
basic needs of workers and their families. We will not work with companies whose wage structure violates local law or prevailing industry practice. CHILD LABOR. Our business partners must not use child labor, defined as school-age children. Our business partners will not employ workers under the age of 15. This provision extends to all partner facilities. HEALTH & SAFETY. Our business partners must ensure that their workers are provided a safe and healthy work environment, and are not subject to unsanitary or hazardous conditions. ENVIRONMENT. Our business partners must embrace a fundamental concern for environmental protection and conduct their operations consistent with both local and internationally recognized environmental practices. ETHICAL STANDARDS. We intend to conduct all our business in a manner consistent with the highest ethical standards, and we will seek and utilize partners who will do likewise, as this contributes directly to our corporate reputation and the collective success of our organization and selected business partners. GIFT GIVING. Our business partners are prohibited from giving to our employees or agents, or receiving from our employees or agents, gifts in excess of US$100.00 and no gifts may be given or received in cash or its equivalent. Furnishing or receiving meals, refreshments and entertainment in conjunction with business discussions is permitted.
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S
trength:
- Hong Kong as an English-speaking region, is easier to communicate ideas while doing business - Link of Hong Kong dollar to US dollar at the fixed rate of HK $7.8 to US$ 1.00 since 1983 which will be no exchange risk - Benefit from the Free Trade Policy, there are neither barriers on trade nor tariff on importing or exporting products. And required licenses for import and export activity is kept minimum. - With the world’s largest gathering of financial institutions, timely payments and documents processing is secured. -One hour drive to the Pearl River Delta, which is one of the world’s largest garments producers. Short flight to other low cost manufacturing countries such as Vietnam, Thailand, India. Easy for sourcing
W
eakness:
- Higher labour costs compared to mainland China - Limited land and space thus the cost for land and rental is high
O
pportunities:
- Re- export: The local entrepreneurs invests in other countries around the region to diversify the manufacturing base as well as to shift focus to cheaper and more productive labour opportunities in mainland China. - Support from governments through various programmes which includes incubator programmes, loan guarantees and funds for marketing - In order to encourage foreign investment, all subsidiaries of US companies don’t need to file any financial documents to the Hong Kong government
T
hreats:
- New Minimum Wage since May 1st, 2015 HK$30 to HK$32.5 - Growing competition in manufacturing and service sector from mainland China
STEP III CoUNTRY'S BUSINESS ETIQUETTE
1. Type of Culture
well as overseas. This is because; it is influenced by western cultures
Hong Kong is a sophisticated fusion of East and West culture. It is
and combined with Chinese cuisine.
keeping baptism of western culture as well as many Chinese traditions. This leads to the diversity of culture and people who are
2. Masculine or Feminine
open-minded.
Masculinity: Hong Kong is a society that refers to competition, achievement and success as the winner and the best in a field. So
- Language: Hong Kong usually uses Chinese and English as official
Hong Kong has a high score in masculine since organizational life
languages. The Cantonese, which is one of the Chinese languag-
at school. On the other hand, a feminine society is caring for others
es commonly, used in the territory and Mandarin (Putonghua),
and quality of life in which women do not stand out much from the
Shanghainese, and Chiu-Chouw can be heard as well. English is
crowd and succeed.
used in the business and service industries, such as hotels, and by employees. Most young people can understand and speak English
3. Negotiation Styles and Strategies
as shop and service personnel. In the major hotels, some employ-
Negotiation is a slow pace and detailed. Be prepared to make
ees have knowledge of other languages, such as French, German,
efficient decisions with senior people who are experts in technical
Japanese and Mandarin.
and commercial functions. In business, it is important to offer price and appeal at the top of the company. And do not press high your
- Food: Hong Kong has various foods that can be boasted locally as
tactics, because business deals should compromise well.
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4. Type of Communication
up and smile, looking at the people. And then, you could shake
Hong Kong prefers to get to know each other enough for com-
hands with a friendly greeting.
fortable working even in the first meeting. Through it is generally sophisticated and cosmopolitan, the Hong Kong Chinese can let
There are several rules of introduction to others:
that you know by being friendly regardless of any countries, visit-
a. The junior should be introduced to the senior first.
ing there. They want to get long-term business relationships and
b. The male should be introduced to the female first.
will never say no in public. But if the atmosphere is not good, you
c. The inferior should be introduced to the superior first.
should try to modify your request or contract. Plus, silence is one
d. The host should be introduced to the guest first.
of the forms of communication in lots of Asia. Do not jump into the conversation when they keep silent for a minute.
C. Greetings When people meet and leave, they shake hands with each other
5. Social and Cultural Elements
whomever men, women, and children are. But Hong Kong hand-
A. Appropriate Business Attire
shakes will be less firm than the Western. This is polite greeting by
People need to be style-conscious and dress well like Hong Kong
lower-ranking persons coming first to higher persons.
residents. It is important to be modest and clean of business attire that looks more toward Asian style than British or American
D. Presentation of Business Cards
- Men: lightweight Western suits and ties with a good watch
After the introductions, you can exchange your business cards and
- Women: conservative dress and evening pants
it is better to have one side of your business card in English and the other side in Chinese. When you exchange the card, you use both
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B. Introductions
hands, and the typeface that is maintained in pristine condition faces
In introduction, showing high respect to business people is really
the recipient. And you should include your job title on your business
important. If it were your turn to be introduced, you would stand
card to make sure of where you fit in your company’s hierarchy.
E. First Name or Title
Notices: Don’t give anything in sets of fours. It is a very unlucky
When you invite your host or colleagues, you should use their fami-
number that means “death” in Asian culture.
ly names first and address them with Mr., Mrs., Miss or appropriate titles.
H. Gift-Giving Giving a gift is a tradition in Hong Kong to communicate respect
F. Gestures
and appreciation. When you are at the first meeting, it is better to
Hong Kong Chinese are uncomfortable with body contact, so do not
prepare a small gift, such as high-quality cognac, brandy, or pens.
suddenly hug or kiss them. You do not wink at them. it is a rude ges-
Try to bring a gift from your hometown or state, because Hong Kong
ture. When you beckon someone, you can make a scratching motion
has every conceivable product. Be careful when you give flowers; you
with your fingers, but never point with an index finger. This gesture is
need to consider the flowers’ colors and meanings.
only relevant to training animals. I. Time G. Colors, Numbers, and Their Meanings
Making appointments 1 or 2 months ago in advance is necessary and
Hong Kong’s lucky colors are yellow, red, and green.
you should try to avoid scheduling meetings during Chinese New
- Yellow: royalty and power of the throne
Year, because during the holiday, most businesses close for a week.
- Red: happiness, beauty, success, and good fortune as the Chinese
You should arrive at a meeting place exactly on time or early.
national color - Green: money
J. Joke-Telling Westerners’ joke can relieve tension, but it is not acceptable in
Lucky numbers are 6, 8, and 9.
business. Sexual joke-telling is also only acceptable during informal
- 6: successful in the venture of business
situations, and in the case of cross-cultural humor, people who do
- 8: prosperity, wealth, success or social status
not know much about other countries’ cultures usually cannot un-
- 9: permanence
derstand, so just avoid it.
14 16
6. Business Entertaining
to pick up with chopsticks such as postprandial fruit.
A. Proper Use of Utensils
C. Alcoholic Beverages
- Alway wait for the elder to pick up the chopsticks first
A toast is expected to be made whether you are a guest or host. If
- Never use chopsticks to point
others stand when making a toast, you should stand too. While
- Sticking the chopsticks in the rice bowl and making them stand
you are toasting, English can be understood by most Hongkong-
straight up is considered to bring bad luck
ese , however the use of a little Cantonese will be appreciated. say
- Usually people hold the rice bowl up to the mouth and use chop-
"Yum boui" for “ Cheers� and "Yum sing" if you are challenging
sticks to push rice into the mouth
someone to drink the entire glass.
B. Table Manners
D. Appropriate Conversation Subjects
Table manners are exquisite for the seating arrangement. The hon-
The appropriate topic includes family, food, hobbies as well as
ored guest is the center seat facing the door and the host will usu-
travel. You may want to prepare for the indirect response in case
ally sit directly across from the honored guest and back to the door.
people ask you personal questions such as income, age or marital
If you are offered the seat of honor say something to display your
status.
unworthiness to be the honored guest instead of accepting it imme-
17
diately which will be considered arrogant.
E. Topics to Avoid
Insteading of using a napkin throughout the meal, a hot towel is
The relationship between mainland China and Hong Kong island
usually provided both before and after the meal. The towel is appro-
is a very sensitive topic to talk about since some Hongkongese may
priate to use for both your hands and face.
react intensely with the further control of Chinese government.
It is acceptable to use a toothpick between courses to dislodge the
Bringing up other negative topics, such as failure or death, is offen-
food in between your teeth as well as pick up the food that is hard
sive.
STEP IV Importing Trade Agreements, Laws, and Policies
Part 1: Trade Agreements Specific to the Country in their dealings with the United States. - When arranging re-export of strategic commodities that are already authorized by the US license of export to Hong Kong for local consumption, traders should ensure whether the license is really applicable or not, and they should make certain of the authorization that is related with the US authorities. - By the US authorities for exporting to Hong Kong, an end-user and an importer should ensure proper authorization for the U.S. and obtain it before transferring the goods to any other parties. When approving a license for the import or export of goods, the Department will consider the US export control regulations and the US license, especially by governing the use, resale, transfer or disposal of the goods in appropriate licensing conditions. After the importer ensure the conditions, the US and Hong Kong licenses are properly conveyed to the end-user.
Part 2: Laws of the United States That Affect the Importation of the products - Arrival of Goods Imported goods may not enter to the other countries until the shipment has arrived at the port which the goods can enter and deliver by the customs’ authority. This should be accomplished by appropriate documents, and before the merchandise arrives, customs entry paper should be presented. - Entry of Goods Here are the following documents are required for a customs entry: · A bill of lading, a bill of airway or other ways to make right entry · A commercial invoice which shows the value and merchandise description by the seller · Packing lists which are determined and admitted in the merchandise · Estimated entry duty and processing fee that the importer should pays according to the tariff classification - Foreign Assets Control The Office of Foreign Assets Control (FAC) generally regulates and administers whether importation of merchandise is licensed or is unlicensed, except regulations of Cuban, Iranian, Iraqi, or North Korean. The above areas which are commercial entities owned or controlled by their governments may not import goods into the United States.
The Harmonized Tariff Schedule (HTS) The Harmonized Tariff Schedule of the United States (2016) reports on apparel and clothing accessories’ materials. Chapter 42 under subheading 4202 is about materials for carrying clothing, such as materials of cotton and silk, containing 85% or more. Chapter 42 Heading 4202 Subheading 4202.12 Tariff Item 4202.12.80
STEP V Classifying the Import
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STRP VI Cost Sheets
22
STEP VII Shipping Route Part 1: Ocean Freight A. Type of box used: Cotton dress: 7-ply carton, which measured 14x14x10, will be used as inner boxes. Every single garment will be pre-packed with polybag and each inner box will contain 12 pieces. 2 inner boxes will fit inside one outer box, which measures 14x14x24. Silk Slip: 7-ply carton, which measured 12x12x4, will be used as inner boxes. Every single garment will be pre-packed with polybag and each inner box will contain 12 pieces. 3 inner boxes will fit inside one outer box, which measures 13x13x23 B. Number of Case Packs (boxes) For cotton dresses, there will be 417 inner boxes that go into 209 outer boxes. For silk slip, there will be 173 inner boxes that go into 58 outer boxes. C. Type of container: 20’ standard container will be used to carry all these merchandises D. Space needed in container: The total volume of all these boxes will be 28.31 cubic meter which takes 85% of the container E. Cost to ship the merchandise The shipment from Hong Kong to New York cost $1345.50 in total.
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Part 2: Two Timelines A. Shipping Production and packaging: 10 days Shipment from manufacturer to port by truck: 1 day B. Customs: From Hong Kong port to Alexander Wang New York Store: 33 days
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STEP VIII: Finalize the entry process of the imported item
Importer’s Documents • Power of Attorney • Entry Summary • GSP Form • Detail Sheet Freight Carrier’s Documents • Ocean Bill of Lading • Insurance Certificate • Arrival Notice • Intermodal Bill of Lading Manufacturers Documents • Packing List • Commercial Invoice • Pro Forma Invoice Banking Documentijm • Letter of Credit
Importer’s Documents Power of Attorney
26
Importer’s Documents Entry Summary
27
Importer’s Documents GSP Form
28
DETAIL SHEET COMPANY NAME: Alexander Wang ADDRESS: 386 Broad Way, New York, NY 10013
STYLE #: 400414S16
Description: classic overlap dress with pocket
FABRIC CONTENT: 100% Rayon
Measures: 43” (109cm) long
Importer’s Documents
CLASSIFICATION: Women’s wear
SEASON: Spring 2016
COLORWAY: military green
DETAIL Classic T by Alexander Wang draped, sleeveless muscle tee dress with overlay and front patch pocket. Semisheer, lightweight garment in an ultra-fine fabric
Detail Sheet
DATE CREATED: 03/01/2015
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DATE MODIFIED:
DATE RELEASED:
DETAIL SHEET COMPANY NAME: Alexander Wang ADDRESS: 386 Broad Way, New York, NY 10013
STYLE #: 403427S16
Description: silk georgette & CDC slip dress
FABRIC CONTENT: 100% silk georgette + 100% silk CDC combo
Measures: 67” (170cm) long
Importer’s Documents Detail Sheet
CLASSIFICATION: Women’s wear
SEASON: Spring 2016
COLORWAY: black
DETAIL Silk georgette camisole dress with a sweetheart neckline in contrasts silk crepe de chine. Center front and center back flat felt seaming and baby hem detail
DATE CREATED: 03/01/2015
DATE MODIFIED:
DATE RELEASED:
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Freight Carrier’s Documents Ocean Bill of Lading
31
Freight Carrier’s Documents Insurance Certificate
32
Freight Carrier’s Documents Arrival Notice
33
Freight Carrier’s Documents Intermodal Bill of Lading
34
Manufacturers Documents Packing List
35
Manufacturers Documents Commercial Invoice
36
Manufacturers Documents Pro Forma Invoice
37
Banking Documentijm Letter of Credit
38
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(figure. 1)
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