Saturday, October 24, 2009

Canton Fair Part 1


I'm spending 5 weeks in Guangzhou working on Shoes of Prey and it so happens that the Canton Fair is running while I'm here. The Canton Fair is the largest trade fair in the world. Over 3 sessions, each lasting 5 days, 55,000 vendors/factories showcase just about any product you can imagine from toothpaste, to shoes, homewares, fridges, cars and heavy machinery. If you can think of a product it's most likely here, and the vendors want to sell it in bulk to you. The picture above shows about 30 of the 20,000 vendors who were set up at the fair for session 1 - the place is huge.

We're focused on Shoes of Prey for the moment and it's off to a great start, but ideally we want to hedge our bets and try another online retail business, so the Canton Fair is a great place to get ideas. 2 products struck me at session 1 as having potential:

1. Wine Cabinets/Fridges

There were about 20 vendors who were selling wine cabinets at the fair. Everything from a single bottle cooler up to a 200 bottle monster fridge. I've always wondered why wine cabinets are so expensive compared with fridges, and I'm still not entirely sure why, but it seems retailers are making pretty good margins from them. A 155 bottle cabinet can be bought for US$410, and similar fridges seem to retail online for around AUD$2500. Obviously shipping from China would be a fairly massive expense and would add roughly 50% to the cost price, then you have warehousing and all your costs in Australia, but I'd guess there would still be a pretty solid margin here.

Marketing would be a challenge. Retailing wine fridges doesn't have the word of mouth appeal of custom made women's shoes. Doing a couple of searches for 'wine cabinets' and 'wine fridges' on Google shows there are a lot of online retailers already in the space and I can't think of any interesting way to differentiate from them. Still, it's an interesting one.

2. Bathroom Fittings
I've not renovated or built a house so I'd want to do a whole lot more research on this. But from my limited knowledge, taps, mixers and shower fittings etc. are all very expensive. There were a ton of these products at the Canton Fair, and they were all very cheap. Around US$10 for a nice looking set of chrome taps. And not much more for a nice looking shower fitting and taps.

My limited understanding of the market is that it's dominated by a few small players - Reece and Caroma. Their websites are very interesting, they make no mention of price, they just encourage you to design your dream bathroom.

One thing I'm not clear on is the buying process for these products. I'm guessing the builder has a lot of influence on what you buy and that people don't necessarily look to the web to buy these products. And if Reece and Caroma have the builders all tied up this market might be difficult to crack.

I'd love to hear you thoughts on these two products/markets. I'm headed to Session 2 of the fair tomorrow so I'll post about what I find there.

3 comments:

  1. u have two options with the fittings - target the builder or u can target the consumer. I dont see why u cant do both. Have 1 price for consumer (e.g. purcahse 1) and a bulk price for builders (e.g. buy 10). It'd be similar to like going to bunnings and buying the stuff. and I agree the prices are ridiculous for taps and fitting products.

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  2. Hey Michael, if you are looking at a permanent supplier in Guangzhou, my friend works for Macvad (see macvad.com for details). He goes to China regularly to source suppliers etc for various product lines. I'm sure he would be able to give you some pointers.

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  3. Thanks guys,

    Inspiredworlds - ah yes, of course, Bunnings retail bathroom fittings so there's clearly a retail market for these products. I'll go and check out their range when I'm back in Sydney. :)

    Liam - I'd love to have a chat to your mate. Do you mind sending me his contact details?

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