Copying: Development strategy in garment business

Copying: Development strategy in garment business

Text and photos by Benito Lopulalan

DENPASAR (JP): Garment copying is big business in Asia these
days. Hong Kong and South Korean industrialists started the trend
in the 1970s and ever since profits have been impressive; so much
so that garment companies in several other Asian countries have
had to reevaluate their design and production strategies. This
became even more necessary with the arrival of Vietnam and China,
themselves masters of the art of duplication with cheap labor.

Almost all garment manufacturers in Bali are now copying
items. This can be easily seen in Kuta, Sanur, Ubud or any other
market. Similar items are sold in street stalls and boutiques.
Any hot item is grabbed by the copiers.

The sample items can come from tourists, Jakartans or from
expatriates. Many companies are backed by expatriates whose
nationality often hampers their business. They are able to invest
here because the regulations favor foreign investment.

"This is a common practice all over the world because it's the
usual way for foreigners to do business," said one American woman
in the garment business in Bali.

Of the copying itself, she admitted that she has "copied many
Parisian designs and sales have been high, both in Nusa Dua and
abroad. Much better, in fact, than self-designed garments from
Bali, which rarely do well on the international market."

For many producers, expatriate investors -- legally or
illegally -- are a reliable sources of income. Some consumers
believe that the copies are made with better quality of the
materials used.

"Often tourists choose better raw materials, such as thread,
than we would have chosen," said Gusti Made Karya, a manufacturer
in Gianyar who agreed that copied garments sell better.

Darodjat Husnan, head of the Bali office of the Ministry of
Trade, emphasized that the situation is the result of difficult
access to the international market.

"The assumption is that the buyers are right as they have
access to the consumers' demand," he said, then added that many
producers don't have a clue about how to enter the international
market.

Kembar Kerepun, Bali chairman of the Association of Indonesian
Textile Companies, is confident that there will not be any major
problems "as long as the garment companies can copy and produce
garments which are of higher standard than the original ones."

Potential crisis

There are indications, however, of a potential crisis in
Bali's garment industry. Although the province's garment exports
have increased three percent compared to last year's figures,
volume has decreased 13.7 percent.

Smaller companies are following buyers' orders to copy
garments, creating competition which has resulted in cut prices
and some companies going bankrupt.

"I have been able to finance my son's university studies
because of my small garment manufacturer," said Pande Mangut, a
small producer in Beng, Gianyar. Recently she was compelled to
sack some of her workers because of the decline in the business.

Not only international designs are duplicated. Local designers
have also complained about the local copiers.

"Copying can be tantamount to suicide in this business," said
Handoyo, a designer in Denpasar. "Although it's one strategy for
developing the clothing industry, we shouldn't have to rely
exclusively on copying to increase profits."

The designer, who has opened a boutique with prominent
designer Arthur Harland, then added, "When we do depend on it,
buyers fight to get the lowest price possible by going to
different producers and claiming they have just been given a
lower quote by competitors."

When than happens, product quality is then sacrificed to
enable manufacturers to compete, said Handoyo.

There is another reason for the poor quality of garments.
Nicolaas Arthoer from an Amsterdam-based broker company blames
the problem on the standard of Indonesia's raw materials,
especially compared to China. He speculated that the poor quality
was the result of a manufacturing monopoly of raw materials.

"Even Vietnamese products sometimes have better raw materials
than Indonesian ones," he said.

Kembar Kerepun is not convinced.

"Comments like that are usual," he explains. "Claiming raw
materials are inadequate is just a brokers' strategy to get
prices lowered."

He insists that Indonesian raw material producers have already
been accepted in the international market and many of them have
international licenses.

Despite these licenses, several designers say it is still
difficult to obtain a regular and reliable supply of quality
fabric and dyes.

"The fabric is sometimes poorly weaved and the color quality
of the dyes has not been standardized," said Handoyo. He believes
that the garment industry, either self-designed or copying, will
tumble if good materials continue to be scarce.

"It is impossible for garment manufacturers to produce a
garment for sale overseas if they have to make do with shoddy
materials," he argued.

"Recently, many high standard producers have been selling at
higher prices. They still sell more," he continued.

Manufacturers cash in on Bali's reputation -- or image -- for
craftsmanship and creativity. The reputation is also very useful
for other regions. In Lumajang, East Java, three villages with
more than 1,000 workers have become the source of garments sold
in Bali.

Husnan asserts that to ensure Bali fortifies its position,
producers must be prepared tightened patent laws.

"Obtaining a patent is still too complicated for many
producers and designers," he acknowledged. He gave JAK-PAK as an
example. Initially it was a Balinese brand. "Then it was produced
in America, registered under America's patent law," he said.
"Ever since, Balinese exports with the American trademark have
been illegal."

Husnan suggests that producers consider hot international
styles rather than copy them.

Copying, however, is entrenched in the Indonesian garment
business. Last month Kerepun warned managers and owners of
handicraft and garment exporting businesses of the possibility of
other producers stealing their lucrative ideas at exhibitions.

Having said that, he added, "You should obviously keep an eye
out for new and interesting designs to copy yourselves."