Window into US$ 200 billion American apparel market

The world’s largest apparel trade show in Las Vegas, could open a window into the US$ 200 billion American apparel market. Organisers of the Magic apparel exhibition say it is the shortest route for the Sri Lankan garment industry to access the US.

“Magic is the world’s largest apparel and accessory trade show. Over half, around 70%, of the business generated through the Magic show is in the US. So Magic is the entry point into North American apparel markets. European buyers also attend the show,” said Hiran Jayasinghe, exclusive representative for Magic in Sri Lanka.

The Magic show is organised by Magic International of the US, one of the world's largest organisers of trade shows for the apparel industry. The trade event is held every year in February and August connecting buyers and sellers of men's, women's and children's apparel and accessories from countries all over the world. The exhibition is made up of 80% apparel manufacturers and 20% accessory manufactures.

The show will open its doors this year again from August 27-30.

Annual business generated through the Magic show its organizers said was bigger than the total Sri Lankan garment exports of US$ 3 billion to world markets per year. Due to the sheer size of the event with over 100,000 people attending, Magic is said to generate billions of dollars worth of orders during the four days of the show itself. However, the bulk of business materializes later, through contacts established at the show.

“Total retail apparel purchases for a year in the US, including domestic purchases and imports, are around US$ 200 billion. Out of this, around US$ 180 billion worth of purchases are from orders placed at the Magic show or through contacts established at the show. Around US$ 61 billion worth of direct purchase orders are placed during the four days of the Magic show itself. So this is a huge trade event that generates large amounts of business immediately and later,” said Jayasinghe.

The high level of immediate business generated during the show organizers was due to the seniority of persons attending the show.

“The attendees at the Magic show are top corporate representatives with decision making authority. As much as 52% of the people coming to the show are presidents and vice presidents of companies. So they can not only see what is available but can also immediately take a decision to place orders. Overall, as much as 92% of attendees leave purchase orders at the show,” said Jayasinghe.

The Magic show representative says Sri Lankan companies could make use of the show to directly access the US apparel market.

“For Sri Lankan garment and accessory manufacturers and even buying offices this is an opportunity to establish direct contact with top-end business people that have decision making power,” said Jayasinghe who added that “thousands of apparel retailers come to the show to source what they need. Retailers from single store boutique outlets to mass market retailers to domestic and international chains, all visit the Magic show.”

The trade show is spread over 4 million square feet of exhibition space, hosting around 5,000 stalls, where suppliers of clothing and accessories display their products.

Entry point for SMEs
Given the large number of different types of buyers coming to the Magic show, the show representative says it is an ideal opportunity for small and medium scale garment manufacturers in Sri Lanka to establish good business contacts in the US.

“At the moment it is mostly the larger garment companies in Sri Lanka that attend the show. But this is an opportunity for small and medium garment manufacturers to also establish direct contact with buyers. They can then directly access the US market instead of going through third parties,” said Jayasinghe.

“There are different types of buyers looking for different types of products. So there is scope for companies that are not large producers. For instance, 112,000 buyers came to the Magic show in February this year. Around half of them were from small boutiques.

They were looking for high quality items in small quantities. So our small and medium companies have a chance of catering to this segment,” explained Jayasinghe. The trade show also organises other types of programmes to facilitate business networking in the US.

“Even before the show, companies can inform buyers about themselves by registering and sending us their details. This information, including the booth number, its circulated among a data base of buyers. Other events, like cocktails, a President’s Club and matchmaking facilities, are also available to help companies make contact with potential buyers,” said Jayasinghe.

At the moment the US is Sri Lanka’s largest destination for ready-made garment exports but the US market share is threatened by lower cost exports from other Asian countries like China, Vietnam and India. Given the increasing competition in US apparel markets these countries are also looking for new contacts.

“All the Asian countries have increased the number of booths at the Magic show over the past few years,” said Jayasinghe. Chinese manufacturers for instance, have already bought around 500 stalls at the August 2007 show and India has bought around 150 stalls.