Manufacturers in China build brands as the path to success

“These overseas buyers will keep driving a hard bargain. But I am not going to slash prices because I want to maintain the quality of our products. The only way out for us is to build our own brand,” she told AFP.

Liu said she was planning to open their first shoe shops in Guangzhou in the next two years. In the long run, she hopes that half of her products will be sold in the domestic market.

“Even Louis Vuitton is expanding its businesses in China -- it would be really stupid for us Chinese manufacturers to ignore our home market,” she said.

The Chinese authorities said in October that third-quarter economic growth had accelerated to 8.9 percent -- the fastest pace in a year -- on a flood of government stimulus cash and bank lending.

Global consulting firm Bain & Company has forecast that sales of luxury goods in China will rise 12 percent this year, bucking the downward trend seen in Japan, the U.S. and other major markets hit hard by the financial crisis.

Mo Pak-hung, associate professor of economics at Hong Kong Baptist University, said the switch to brand-building and providing for the domestic market would become the trend for Chinese manufacturers.

“The switch to brand business is inevitable -- China needs to carve a new niche as other manufacturing hubs in Southeast Asia are catching up fast,” he said.

But Mo cautioned that a lack of intellectual property protection would be a major stumbling block, saying “In China, it is just too easy to copy other people's designs and stick your own label on the products.”

David Xu, a Zhejiang-based apparel products exporter attending the Canton Fair, echoed Mo's concern.

“Establishing my own brand will definitely be my long-term objective,” he said.

“But to do so now would be risky. If I sell my designer clothes in China today, I can almost guarantee that I will find counterfeited copies in the market tomorrow.”

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