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."