Morgan eyes China, HK

       Morgan De Toi (Thailand) will export its lingerie to China and Hong Kong next year and import a new French brand to tap the mass market in Thailand.
       The company produces and distributes lingerie and leather bags, and imports women's clothing for sale in Thailand.
       It was set up by Morgan, a French apparel-maker, and Saha Group, Thailand's largest and most diverse textile and garment manufacturer.
       China is expected to become the largest market for lingerie, Morgan director Marin Leelanuwatana said yesterday.
       The domestic market generates 70 per cent of Morgan's lingerie sales and exports 30 per cent, but if the company succeeds in the China market, that ratio will be reversed, she said.
       Lingerie contributes 60 per cent of the company's total sales, follow by women's apparel at 20 per cent and leather bags at 20 per cent.
       Morgan now expects its sales to increase 11 per cent to Bt170 million this year. It had targeted sales growth at 15 per cent but the economic crisis has throttled its exports.
       "Exports witnessed a drop of 20 per cent this year, especially to Taiwan and South Korea, because both countries rely on the US economy. Even if the global economy recovers, the export situation will not improve like the domestic market, which started to pick up in the third quarter. That helps the company to see some sales growth," she said.
       The company forecasts no progress in the export situation next year, so it will have to depend on the domestic market.
       Morgan's projection of sales growth of 15 per cent next year does not include China because the company has to wait and see the results of its attempt at market penetration there.
       The company will also start selling leather bags in the Asian market after achieving its sales goals in Thailand.
       "We have adjusted the price structure for bags to match our competitors. Our price was higher than theirs but when we reduced prices by 10 per cent, sales shot up 54 per cent, from 10-per-cent growth in previous years," she said.
       The company will launch Cache Cache, a French apparel brand from its parent Morgan that is produced in China, for the mass market in Thailand.
       The latest brand is priced lower than local brands, as in the company's experience, consumers are more cautious with their spending and will purchase those products that represent value for their money.
       The company is also considering cutting women's apparel prices by 20 per cent after the Asean Free Trade Agreement (Afta) ends duties on imports and exports among Asean countries. The company now pays 30 per cent on imports of women's clothing.
       However, Afta will also open the market to many Asean lingerie brands. Morgan has to quickly build brand awareness for its products especially lingerie because consumers are less familiar with Morgan's lingerie than its women's apparel.