Danish company gives Chinese fur manufacturers the tools to move beyond the domestic market: Since his first visit to China in 1992, Torben Nielsen has been witnessing the incredible growth of fur trade in China.
“If you go 20 years back, fur manufacturing was Europe and the United States. But today, my guess is that over 85 percent of all the fur coats in the world are produced in China,” he says.
As the managing director of Kopenhagen Fur, the world’s largest fur company, Nielsen says his company attaches great importance to the Chinese market, especially for its manufacturing capabilities. The top priority for Kopenhagen Fur in the Chinese market, says Nielsen, is to help Chinese fur companies gain a foothold in the European market.
“I think they should at least try their luck in the export market, especially in the European market, and compete with international companies,” he says.
Nielsen says China’s fur industry has already established a strong presence in the global market, but the more common case is that companies in Europe and the US come to China to import from Chinese companies, and not China’s domestic firms actually going out to Europe and other regions.
“When you buy a fur coat, it is not only because it’s cold outside. It is because you want it to be a fashion statement. If it’s not fashionable, you don’t want to buy it. In the long run, we feel that the Chinese companies must establish themselves in Europe so that they can understand better the nature of fashion,” Nielsen says.
“To me, fashion is a big mystery, because we cannot understand it by simply taking some lectures. The fur coat industry is part of the fashion industry, and it is necessary to do the utmost.”
But Nielsen says the biggest problem for Chinese companies is that the domestic market is easy to deal with. As a result, most Chinese companies are not willing to spread their wings overseas, he says.
Nielsen says Kopenhagen Fur plans to establish a new company in China to provide consultancy services for Chinese fur manufacturers and encourage them to go abroad.
“We believe that what the Chinese market needs now is knowledge. Our strategy now is called knowledge share,” he says.
Kopenhagen Fur has been cooperating with Chinese fur manufacturers for more than a decade, and now, the company feels it is time to reach out to individual companies rather than in groups.
For instance, in Haining city of east China’s Zhejiang province, a leather and fur products center, there are more than 3,000 fur stores and 400 manufacturers.
In recent years, Kopenhagen Fur has been teaching the shopkeepers and manufacturers about design, fashion and marketing.
In November, the company’s Chief Auctioneer Per Knudsen gave lectures on the fur auction market and fashion trends to fur manufacturers in Haining.
“It is easy to reach them in groups. But there are 400 of them, and it is impossible to reach out to each individual company on our own. That is why we are planning the consultancy,” Nielsen says.
He says Kopenhagen Fur will be one of the shareholders of this new company, which will focus on providing updated knowledge on everything about fur to Chinese companies.
The company is also setting up a European center for Chinese companies which are willing to go abroad.
Nielsen says they are also planning an inspiration center for fur products in Copenhagen along with the Danish fashion industry.
“A lot of European small- and- medium-sized companies in the fur industry will settle down in the center and hopefully some Chinese companies will come to this center to establish contacts with European companies. It could be their stepping stone to the European market,” he says.
Nielsen admits that there are several European companies with huge designs for the Chinese market, but the market competition is so tough in China that they also need partners.
“So why not bring them together,” Nielsen says.
As early as 2008, Kopenhagen Fur had started to help Chinese fur companies to reach the other side of the continent. Haining Leather Market was one of the lucky and brave companies.
“We assisted Haining Leather to stage a fashion show in Copenhagen. We helped them find the venue and also invited European media for the event. It was a big success,” Nielsen says.
Ren Youfa, president of Haining Leather Market, says the Copenhagen debut helped the company gain confidence in Europe, and since then, it has been striving to make rapid strides.
Kopenhagen Fur has been by its side and watching the achievements of Haining being China’s leather and fur production and distribution center from the very beginning.
In 2009, the company presented a statue designed by Danish artist Anders Gjerding Geertsen to celebrate the 15th anniversary of the market.
Nielsen says he is never afraid of Chinese companies being so successful that can overpass the influence of his company.
“This industry needs competition, and Chinese companies’ success is also ours, because we are the ones who share knowledge with them,” he says.
Although Kopenhagen Fur has achieved a lot through sharing fur knowledge with Chinese companies and helping them to go abroad, the company still sticks to its main business in the Chinese market.
Like China’s fur manufacturing market, the consumption market has also been developing rapidly in the past 10 years.
Steven Hurwitz, chairman of the International Fur Trade Federation, says with the improvement of living standards in China, fur coats are longer perceived as a luxury item available only to the rich and famous.
“The future of the Chinese fur market is bright,” he said in a recent interview with the International Business Daily, a Beijing-based newspaper.
According to a rough calculation by Kopenhagen Fur, 850,000 mink coats are sold in China every year at an average price of 20,000 yuan ($3,170, 2,415 euros). Retail sales are around 17 billion yuan a year.
“Twenty years ago, we looked crazy in the beginning to show interest in the Chinese market because nobody could afford to buy a fur coat. But when China’s economy started to grow, the fur trade also kept growing,” Nielsen says.
“Today, I should say, we are confident of the Chinese market. It is by far the most important market in the world,” he says.
The growth rate of fur coat purchases in East and western China has been considerably significant in recent years.
“People used to believe fur coats are needed only in North China. But nowadays, we see more and more consumers from eastern and western China, especially from West China, where economic growth is rapid and winters are pretty cold,” Nielsen says.
Though Nielsen is confident about the Chinese market, he also feels that Chinese consumers are more demanding than consumers in any other region.
“Chinese consumers are fully aware of the quality of the products. That is very interesting, because one may assume that Chinese consumers want the cheapest products, but the fact is they are always looking for the best quality,” he says.
Nielsen agrees that China’s huge population gives him the confidence that market prospects for the fur industry will continue to grow rapidly for another 10 years.
“With 1.3 billion people, I see no reason why this market is not promising,” he says.