Теги: exports
Three tips for Ukrainian apparel producers from Canada

Canadian consumers spent CAD 36 billion on clothing in 2018. It is estimated that by 2023, the total apparel sales will reach CAD 43 billion. On average, a Canadian consumer spends CAD 974 a year on clothing.

Apparel imports in Canada have grown from $10.1 to 12.5 billion CAD over the last four years. The largest supplier of clothing to Canada is China. It accounts for more than a third of total clothing imports – CAD 4.8 billion.

Thanks to the Canada-Ukraine Free Trade Agreement (CUFTA) and the abolition of import duties, Ukrainian clothing has 18% preferences on the Canadian market compared to imports from such powerful global players as China. All this creates attractive conditions for encouraging Ukrainian clothing manufacturers to export to Canada right now.

Maria Guzman, TFO Canada Apparel Consultant, CUTIS Canadian Expert explains the specifics of the Canadian apparel market and provides three tips for Ukrainian apparel producers to succeed in Canada.

The CUTIS team at Apparel Textile Sourcing Canada, Toronto 2019

 

  1. Find your niche

There are 3 important factors for an apparel company that wanted to export its products – price, minimum quantities, and quality.

For Ukrainian apparel companies, price and minimum quantities are challenges which hard to overcome.

First, Ukrainian companies are too big or too small for the Canadian market. Even though some people think that Canada a big market, it’s not. In Canada, you just can’t find so many buyers, as in the US. The quantity Canadian buyers want to purchase is considerably small in comparison with large US buyers.

Second, Ukrainian companies just can’t compete with such countries as China, Vietnam, or Bangladesh in prices. So, they shouldn’t market their products comparing to China. What Ukrainian companies should do in that context? To find their niche.

Some Canadian companies, for example, Laura, don’t want to have all their product mix just from China or Bangladesh. They want to diversify their assortment with other countries. They know that Ukrainian production has very good quality and a good reputation from the past. Approximately 20 years ago many Canadian buyers cooperated with Ukrainian companies. Nowadays this business connection is rather small. However, I think that Canada-Ukraine free trade agreement is a good reason to “press the reset button” in business relations between two countries.

Exports to Canada is like a marathon, not a short-distance run. Ukrainian companies need to be ready to compete with the whole world.

  1. Understand the Canadian consumer mentality

I do advise foreign companies to start their business journey in Canada from market familiarization – companies need to know how a typical Canadian clothing store looks like. They need to come to Canada and look around. What is a prototype for a typical Canadian man and woman? They need to emerge into the market and learn local mentality.

Culture is a very key issue. Ukrainian companies need to adapt their collection. Clothing from Ukraine is very classic or too open/wild/sexy. Canadian consumers are looking for something in between.

Besides, it would be nice to mention during a meeting with a Canadian buyer – yes, I visited your store, I know how you present products, I believe that my product fits your store because of this, this and this, I know your target audience, etc.

A Canadian buyer may have 120 emails a day from companies looking for an appointment. It’s crucial to persuade that exactly your product is a perfect choice.

  1. Be ready for export activities

The North American apparel market is very trendy. Buyers are not looking for quality unless they are looking for certain brands. Regular buyers are looking for so call fast-fashion products. Every few months is a new collection. It used to be 4 seasons for buying clothing. Not anymore. Now there are 12 seasons.

To succeed in Canada, Ukrainian producer needs to find the right buyer, to knock to the right door. It’s a challenging goal.

If you find the right buyer, try not to lose your chance – get marketing material ready, make a price list in US dollars, update your website, etc.

A website should be in English with appropriate pictures – the Canadian market is extremely sensitive to gender issues. Good homework is the keystone to success in finding a partner in Canada.

Author: Maria Guzman, TFO Canada Apparel Consultant, CUTIS Canadian Expert

Source: epravda.com.ua

Ukrainian apparel producers in Canada: Five steps to success

Olga Shtepa, coordinator of the CUTIS project, explained the specifics of the Canadian apparel market and provided five practical tips for Ukrainian apparel manufacturers to become successful exporters to Canada

Canada is a northern country. Due to its mostly cold climate, it is a powerful player in the field of warm clothing and home to such well-known brands as Canada Goose, Mackage, Sentaler, Rudsak or Moose Knuckles. Canadian consumers spent $36 billion CAD on clothing in 2018. Apparel imports in Canada have grown from $10.1 to 12.5 billion CAD over the last four years.

This is definitely good news for Ukrainian companies because thanks to the Canada-Ukraine Free Trade Agreement (CUFTA) and the abolition of import duties, Ukrainian clothing has 18% preferences on the Canadian market compared to imports from such powerful global players as China. All this creates attractive conditions for encouraging Ukrainian clothing manufacturers to export to Canada right now.

Each manufacturer, of course, has its own path and understanding, but based on the experience of the Project, we suggest reflecting on the following basic steps to enter the Canadian market.

The first step is to have an English language website. A simple but user-friendly site that presents the manufacturer’s products and basic company information in good English is the only opportunity to make a positive first impression on international partners. Therefore, if you enter international markets or are interested in attracting foreign buyers you have to consider developing a website, though not an extensive, but at least a business card website.

Clear photos, fabric composition with descriptions of care options, existing sizes and prices are a small list of information you need online.

Price is the main and decisive tool in any market. Therefore, the second and very important step is the detailed and calculated price for your own products for export. It is quite difficult for an enterprise that does not yet have export experience. A detailed analysis of competitors’ retail prices for similar products in a potential retailer’s chain may be useful. You also need to have a clear understanding of further logistics and additional costs associated with shipping products to a buyer overseas (transportation, insurance, brokerage services, importer fee, etc.). Also, depending on who the Canadian buyer is – a big retailer or a small boutique – the retail price of the end consumer must be divided by 3 or 6 to get the approximate manufacturer’s price. Ukrainian manufacturers usually operate in US dollars or euros, so keep in mind the conversion rate of the Canadian dollar. It is also not necessary to include value-added tax into the export price calculations.

I recall a story told by a friend of mine who recently moved to Canada and found his first job. Responsible work in the office, a managerial position, a large company, so he preferred the classic tie suit. His Canadian colleagues were very surprised and kept asking him all day about the cause of such a solemn style. There were lots of options offered – from baptism to funeral, so the next day he was forced to change his “look” to a more democratic one.

It is also not customary to emphasize one’s high position in society or financial status by accessories such as precious watches, jewelry or expensive attire. Wealth is irrelevant, and the determining factor is the person and his or her success. Clothes should be, first and foremost, comfortable and neat, but also affordable. Therefore, Canadians usually buy a lot of clothes to be able to wear something new every day without spending a lot of time washing and ironing.

Canada is a multinational country that is made up of many groups, mostly ethnic, and all have different styles. Indeed, it is quite a common situation when people wear down jackets in combination with flip flops in winter, or shorts with fur winter boots.

In major cities, Toronto and Montreal, the entire transportation system and social infrastructure are designed to stay indoors for months: underground passage with shops and restaurants, direct exit from buildings to underground transportation stops significantly reduce the demand for heavy and warm winter clothing. Understanding these features and forgetting the stereotypes is the third step for a Ukrainian apparel exporter to Canada.

Step four is to get rid of misconceptions about your own products. Our manufacturers believe that it is enough to offer high-quality products made in Ukraine using state-of-art technologies with the equipment of well-known world brands out of natural fabrics in accordance with the latest European trends in fashion and it will be all immediately bought. This scheme may work in Europe, Asia or the Middle East.

The Canadian market is completely different. Canadian buyers have appreciated the quality of Ukrainian products during the CUTIS project trade mission. Ukrainian products compare favorably with competitors as they look modern and follow the latest fashion trends. According to an expert on the Canadian clothing market, Ukrainians can make even stockings look attractive.

In Canada, however, they prefer practical clothes that can be washed in a machine without further ironing – clothes made from fabrics with polyester, viscose and elastane. This saves time considerably. Clothes should be light, comfortable, sensible, inexpensive and, last but not least, attractive. It is not common here to consider purchasing a coat as a family investment. Canadians would rather buy a few less expensive wardrobe items than one thing they will wear for ten years to then preserve for posterity. For many Ukrainian manufacturers, especially those who have experience exporting and selling in international markets, this situation is an unpleasant surprise. Even the free trade agreement between Ukraine and Canada that provides for customs-free import of clothing made in Ukraine does not save the situation. After all, Ukrainian manufacturers have to compete with companies from India, Pakistan, China, whose products, though taxed, are still cheaper than Ukrainian.

Step Five: prepare for the presentation of your products to a potential buyer. It would seem nothing complicated. However, this is a very important step in finding orders in the Canadian market. Large Canadian buyers are “spoiled” and accustomed to queues of potential suppliers in their waiting rooms. For example, during the CUTIS trade mission, one of the well-known buyers said that they received an average of 180 emails a day with commercial offers from around the world. So you can imagine what an unusual offer and what quality that should be to get their attention! Businesses negotiating with Canadians should be well informed and aware of the smallest details of their offers. Awareness and honesty are highly valued. Canadians do not accept evasion from answers. Our favorite phrase “how much will you give?” works great in Odessa but is perceived as unprofessionalism in Canada. Parrying a question puts an end to any further communication. Even exchange of business cards has certain specifics, which many do not even know.

There is a logical question: since everything is so difficult, is it worth doing? What is so attractive about the Canadian market and why should Ukrainian manufacturers go there?

The Canadian market means, first and foremost, stability. Having got a new supplier, a Canadian buyer is inclined to cooperate on a long-term basis – for ten, twenty or thirty years, and this is by far not the most impressive duration.

The purchasing power of Canadians is much higher than that of Ukrainians or Poles. In 2018, for instance, Canadian consumers spent CAD 8,650 on goods and services (FMCG). Ukrainians, by comparison, spent only about CAD 4,000. Payments under the agreement with a Canadian buyer will be in freely convertible currency. In addition, Canada is the closest neighbor to the most economically developed country – the United States, and it is much easier to cross the southern border than to try making contacts in the US from Ukraine.

As part of its activities, the Project has produced a lot of practical and theoretical information that will be of use to any manufacturer planning to export to Canada. The most up to date are industry-specific manuals that bring together all knowledge base on the exports of footwear, clothing, furniture, goods and ICT services. If you need a “live” consultation you can contact the Canada-Ukraine Chamber of Commerce, which provides practical advice and consults on exports to Canada for over 25 years.

Ukrainian manufacturers have already achieved considerable success in making the products that meet high international standards, so now there is a little left to do: to offer it professionally to Canadian consumers.

Do you know what our main advantage is compared with Chinese, Indonesians and others? The ability to learn very quickly regardless of the internal or external circumstances. This is our main competitive advantage and the key to success.

Author: Olga Shtepa, coordinator of the CUTIS project 

Source: NV.UA

How Ukrainian IT companies succeed in Canada

Ukraine has a high quality and high capacity ICT sector specifically in software development fields, for example, artificial intelligence, robotic process automation, cybersecurity, high-level math-based technologies, etc. It’s exactly what the rest of the world needs to know.

Frankly speaking nowadays Ukraine doesn’t do a lot of trade with Canada in ICT. Considering the fact that Canada has a huge Ukrainian diaspora (more than 1 million people), the amount of business Ukraine does with Canadian partners is relatively small.

What are the main reasons and what Ukrainian companies can do to be successful in Canada?

Even though Canada is close to the USA geographically, but methods of doing business can be considerably different from the US market. Canada is much more relationship-based. Of course, Canadian business has experience in outsourcing ICT services from other countries, but significantly less than the United States.

Canadian companies are typically a bit more sensitive to risk.

That is one of the key challenges for Ukrainian companies in finding a partner in the Canadian market. It is a strong perception among Canadian small and medium enterprises that it’s not very secure to transfer data or provide access to corporate data to Ukrainian companies. For many Canadian clients, it is common as part of a business contract with a downstream client that their data can’t cross the Canadian border or certain international borders.

In this context, Ukrainian companies have a certain job to do – to convince the Canadian business community that it’s a safe business environment. I am sure that it’s an achievable goal over time, because cybersecurity is one of the Ukrainian’s strongest ICT sub-sectors.

Ukrainian companies should be ready to invest time, money and human resources in exploring the Canadian market. They need to avoid expectations that they take a flight, visit a trade show and immediately sign a million-dollar contract with the Canadian partner. Business doesn’t work like this in Canada.

Ukrainian companies of all sizes need to do their homework, need to prepare a detailed export plan, market research, and they need to identify who is a perfect customer for them in the Canadian market.

An export plan should be based on cost, quality, customer services, and other competitive advantages – not simply “lowest price” – there are other supply markets for ICT services that will always be cheaper.

Not all Ukrainian companies realize that Canada is the second-largest landmass in the world. More than 90% of our population live no further than 100 km from the US border. The country stretches more than five thousand km from east to west. Therefore, you are not doing business in “Canada”, you are doing business, for example, in the Greater Toronto area or Halifax or Vancouver. It’s important to do your research to discover where your perfect potential customer is located.

We have technology clusters which are well-known all over the world. Such clusters are concentrated in Halifax, Montreal, Ottawa, Toronto and Kitchener-Waterloo in the east, as well as in Calgary and Vancouver in the west. The Toronto-Waterloo Corridor is the second-largest IT cluster in North America (after California).

The Canadian market is rather competitive. Ukrainian companies need to be ready to compete not only with Canadian companies but also with main international outsourcing supply countries such as India, Philippines, and emerging South American markets such as Columbia.

Some Ukrainian ICT companies try to use the following strategy in negotiation with Canadians – tell me what you need, we can do all. It’s a common mistake. The only way to succeed in entering the Canadian market is to be focused and explore what it is that you are really good at – your company’s core value.

And last, but not the least: Price. Price is a factor, but there are other more significant factors in the decision-making process. Those are the quality, the expertise, the level of communication and responsiveness, and also the past experience and testimonials.

Reputation is a crucial factor.

Cost is a factor, but it doesn’t need to be 30% cost-savings. 5-10% cost-savings is enough, but it should combine with other value-added attributes. A competitive combination of these factors is what is going to win business.

From an interview with Theo Ward, CUTIS Canadian Expert, TFO Canada Trade Information Systems Specialist and Associate Consultant

Source: NV.UA

Exports of organic products to Canada: what has changed over the past year

The demand for organic products is increasing worldwide. Canada is no exception. It is precisely this conclusion that can be made after reading the World of Organic Agriculture 2019 Report, which was recently published by the leading organizations FIBL and IFOAM.

Global trends

Thus, according to the 2017 results, sales of organic food and beverages reached a record high of 90 billion euros. Since 2000, this figure has grown 5.5 times, and compared with the year 2016 – by 8%.

North America and Europe remain leaders in the consumption of organic products – they account for 90% of total global sales. The United States occupies the first place with the rest of the world considerably lagging behind; about half of the world organic produce market is in the United States. Germany and France follow.

Canada with 3 billion euros of its organic market volume is no more within the world’s top five organic markets. Now it ranks sixth in the global ranking.

Australia, Argentina and China have become leaders with the largest areas of organic farming.

Sales of organic products in supermarket chains in 2017

Specifics of the Canadian organic market

Major Canadian organic producers are located mainly in the provinces of Ontario, Quebec and British Columbia. The reason is simple. It is these regions that are characterized by the bigger size of the market (population density) and its maturity, that is, willingness to pay more for organics.

Understanding the prospects of the organic market, Canadian government officials are taking steps to support it. For example, the province of Quebec set a goal to double the area of land under organic farming by 2025 compared to 2015.

Canada produces organic products mostly in such segments as dairy, ready-made food and bakery products. Of course, a lot of organic maple syrup is produced.

Food and drinks account for 93.5% of Canada’s organic market. Due to the strong consumer demand, the Canadian organic market is growing faster than the average food industry. In the period of 2012-2017, the sector’s average annual growth rate was 8.4%.

According to statistics, two thirds of Canadians bought organic products weekly in 2017. In 2016, only 56% of them did.

Millennials are fans of organic goods. More than 83% of people born in 1981-1999 buy organic products every week.

Canada imports a lot of organic goods, which is a great opportunity for Ukrainian companies. In particular, Canada imported organic goods for 637 million Canadian dollars in 2016.

At the moment, Ukraine primarily exports organic raw materials to Canada, although it would be more profitable to export processed products. The best prospects on the Canadian market are for such groups of goods as dried and frozen vegetables, vegetable oils, juices and drinks, jams, pastilles, honey, and the like.

According to the Open Register of the Organic Standard Certification Company nine Ukrainian producers have successfully passed certification under Canadian COR organic standards as of May 2019.

Some Ukrainian organic producers already have successful cases selling their own products to this market. For example, PE “Agroecology”, one of the largest Ukrainian organic producers (more information can be found from the video https://youtu.be/zsVQUao58Dc).

If your company is also interested in obtaining a Canadian organic standard, please, be informed that the CUTIS Project co-finances such certification (for more information, follow the link https://cutisproject.org/news/new-opportunities-from-cutis-project/).

Changes in Canadian legislation

On January 15, 2019, the Safe Food for Canadians Regulations (SFFC) entered into force, which in fact prescribe a policy for the production and sale of foodstuffs. This is a new document that combines food sector regulations.

The issues of producing, importing and exporting organic products are regulated by Section 13 of the SFFC. Thereunder, any food products, seeds or animal feed claimed as organic are subject to control by the Canada Food Inspection Agency (CFIA) regulatory authority.

However, CFIA does not control the flow of organic cannabis, cosmetics, food for pets and biologically active additives. The mention of cannabis in this list is an attempt to clarify the situation with its legalization in Canada since the fall of 2018.

Starting from January 15, 2021 organic products from the organic aquaculture sector will be subject to the SFFC provisions as well.

Regulatory changes in the field of organic production will come into force not immediately but gradually over the next 12-30 months (by January 2020 – July 2021). Obviously, this is due to the smooth transition of Canada’s organic sector to the new regulatory regime.

Attention of Ukrainian exporters of organic products to Canada: production of organic products eligible for sale in Canada is governed by the following Canadian organic standards (CAN/CGSB 32.310 – Organic Production Systems – General Principles and Management Standards; CAN/CGSB 32.311 – Organic Production Systems – Permitted Substances Lists). It is important to keep in mind, however, that there are plans to revise them in 2020.

In addition, organic products will be separated within the Automated Import Reference System (AIRS). What is this system? This is a resource for obtaining information on the terms of import of certain categories of agricultural products into Canada. By entering the product category name, you will receive detailed information about the terms of import. In 2019, organic fresh fruits and vegetables will be the first categories to apply this approach. This will make life easier for importers to Canada: they will have access to detailed regulatory instructions for certain categories of organic products.

This is to remind that the Canada-Ukraine Trade and Investment Support Project (CUTIS Project) is a 5-year (2016-2021) initiative of the Canadian government aimed at increasing exports from Ukraine to Canada and investments from Canada to Ukraine. The Project is funded by the Canadian Government through Global Affairs Canada. The Project is being implemented by the Conference Board of Canada in cooperation with the Canada-Ukraine Chamber of Commerce.

Zoya Pavlenko, Environmental Expert, Canada-Ukraine Trade and Investment Support Project (CUTIS)

Source: Agroportal.ua