Clothes in UkraineClothes in Ukraine

Group #3Group #3::

Lesya IvanovaLesya Ivanova Anna Kotaleychuk Anna KotaleychukLudmyla KushnirLudmyla Kushnir

Alina Mamkayeva Alina Mamkayeva Anastasia Novikova Anastasia Novikova

Olena Puzina Olena Puzina

Clothes and shoos in Clothes and shoos in UkraineUkraine

Total value of the market Total value of the market

= app. 50 bil.grn ($6,5 bil)= app. 50 bil.grn ($6,5 bil)

500mil. Grn ($65mil) – legally 500mil. Grn ($65mil) – legally importedimported

90% - black or grey market90% - black or grey market

Textile marketTextile market

UkrainianproductionImport

3%

97%

ImportImport

LegalI lligal

10%

90%

Ukrainian textile prodactionUkrainian textile prodaction

02468

101214161820

1991 2010

Budget receipts

0

100

200

300

400

500

600

700

800

1991 2010

Peopleengaged(thousand)

Sewing ProductionSewing ProductionLegal Export (2007, USD)Legal Export (2007, USD)

40 40 % - % -

GermanyGermany 9 % - France9 % - France

7 % - Italy 7 % - Italy 7 % - Poland7 % - Poland

5 % -5 % -NetherlandsNetherlands

5 % - Hungary5 % - Hungary

Legal Import (2007, Legal Import (2007, USD)USD)

47 % - China47 % - China

9 % - Turkey9 % - Turkey

8 % - Italy8 % - Italy

6 % - Russia6 % - Russia

4 % - 4 % - ByelorussiaByelorussia

3 % - Vietnam3 % - Vietnam

KnittingKnitting Production Production Legal Export (2007, USD)Legal Export (2007, USD)

23 % - 23 % - DenmarkDenmark 17 % - 17 % - GermanyGermany 13 13 % -% - LithuaniaLithuania

1212 % - % - HungaryHungary 8 % - Russia8 % - Russia

7 % - Italy7 % - Italy 6 % - Poland6 % - Poland 6 % - France6 % - France

Legal Import (2007, Legal Import (2007, USD)USD)

45 % - China45 % - China

10 % - 10 % - ByelorussiaByelorussia

9 % - Turkey9 % - Turkey

7 % - Italy7 % - Italy

5 % - Hungary5 % - Hungary

4 % - Poland4 % - Poland

6000 enterprises are located 6000 enterprises are located that produce ready-made that produce ready-made clothes and fur in Ukraine clothes and fur in Ukraine

Knitting Factory Knitting Factory “Kyjanka” “Kyjanka” (since 1960)(since 1960)Kyiv, Vasyl’kivska st. 30Kyiv, Vasyl’kivska st. 30

Place an order – from 50 thingsPlace an order – from 50 things

““Yunist’”Yunist’”(In 1934 “DETODEZDA” was opened and in (In 1934 “DETODEZDA” was opened and in

1976 it was reorganized and renamed in 1976 it was reorganized and renamed in “Yunist’”)“Yunist’”)

Privately owned enterprise Privately owned enterprise "The "The garment factory EURO-garment factory EURO-

STYLE"STYLE" (since 2005)(since 2005)PoltavaPoltava

TheyThey sew collections for German firms: "Franken sew collections for German firms: "Franken Walder E. Held GmbH & Co.KG", "Frank Henke Walder E. Held GmbH & Co.KG", "Frank Henke

Mode GMBH", Philgo, B/a/s/l/e/r, etc. Mode GMBH", Philgo, B/a/s/l/e/r, etc. The enterprise is equipped with the new sewing The enterprise is equipped with the new sewing

equipment, system SAPR (system of the equipment, system SAPR (system of the automated designing). Staff consists of automated designing). Staff consists of 100 100 peoplepeople, 80 from which are seamstresses. , 80 from which are seamstresses.

Capacities of the garment factory allow to make Capacities of the garment factory allow to make 4000 garments4000 garments (skirts, trousers, blouses, (skirts, trousers, blouses,

jackets) per month or jackets) per month or 10000 pieces of knitted 10000 pieces of knitted clothcloth. .

““EURO-STYLE"EURO-STYLE"

Ukrainian fashion-clothesUkrainian fashion-clothes

There is no developed fashion clothes There is no developed fashion clothes market in Ukraine.market in Ukraine.

There are many talented fashion There are many talented fashion designers in Ukraine, but they need a lot designers in Ukraine, but they need a lot of money to be promoted on the world of money to be promoted on the world fashion market and to be sold the same fashion market and to be sold the same prices as world-famous designers.prices as world-famous designers.

Some of them, however, are famous in Some of them, however, are famous in Europe and the USA: Lilia Poustovit and Europe and the USA: Lilia Poustovit and Michael Voronin.Michael Voronin.

Lillia PustovitLillia Pustovit

According to the According to the schedule of the world schedule of the world fashion industry, Lilia fashion industry, Lilia demonstrates collections demonstrates collections for POUSTOVIT brand at for POUSTOVIT brand at Ukrainian Fashion Week Ukrainian Fashion Week and Russian Fashion and Russian Fashion Week twice a year. In Week twice a year. In parallel the designer parallel the designer develops a separate line develops a separate line for the concept ATELIER for the concept ATELIER 1 (POUSTOVIT FOR 1 (POUSTOVIT FOR ATELIER 1) that is sold in ATELIER 1) that is sold in the most famous the most famous concept-stores in the concept-stores in the world: Dover Street world: Dover Street Market (London and Market (London and Tokyo), Le Form Tokyo), Le Form (Moscow), 10 Corso (Moscow), 10 Corso Como (Seoul) and Como (Seoul) and L’Eclaireur (Paris).L’Eclaireur (Paris).

Stores: 4 in Kyiv, 1 in Odessa, 7 in Moscow, 1 in San Alermo, California; 2 in New York; 1 in New Jersey, USA = 16 stores worldwide

Except for Ukraine and Russia, Poustovit is sold in Switzerland, Great Britain, Japan, Italy, Korea.

Clothes cost: from 800 UAH ($ 100) for scarf to 7000 UAH ($ 900) for evening dress, kit “shorts+top” 1500 UAH ($ 190).

Best women clothes designer in Ukraine (Best Fashion Awards)

Michael VoroninMichael Voronin

МихаїлМихаїл ВОРОНВОРОНIIНН ® is a popular trade mark in  ® is a popular trade mark in Ukraine. Due to the high quality and wide range of Ukraine. Due to the high quality and wide range of goods it has perfectly recommended itself on goods it has perfectly recommended itself on Ukrainian, European, Asian and American markets. Ukrainian, European, Asian and American markets. The The unique price policyunique price policy developed specially for developed specially for Ukrainian customers enables to sell suits according Ukrainian customers enables to sell suits according to the scheme: to the scheme:  price in dollars abroad = the price in dollars abroad = the same price in Ukraine  in hryvnas.same price in Ukraine  in hryvnas.

Stores: Ukraine, Russia, Uzbekistan, Japan, Stores: Ukraine, Russia, Uzbekistan, Japan, Australia, Italy, Austria, France, Germany, Great Australia, Italy, Austria, France, Germany, Great Britain, Spain, USA, CanadaBritain, Spain, USA, Canada

4 trademarks: Voronin Exclusive, Michael Voronin, 4 trademarks: Voronin Exclusive, Michael Voronin, VORONIN Sport, Mackentosh.VORONIN Sport, Mackentosh.

Costs: costumes in stores: around $ 300-500; to Costs: costumes in stores: around $ 300-500; to have costume made: $ 600-700; individual orders have costume made: $ 600-700; individual orders made of expensive fabrics: $ 5000-7000.made of expensive fabrics: $ 5000-7000.

Brand clothes for middle Brand clothes for middle classclass

Colin’sColin’s Oggi Oggi SelaSela Tally Weijl Tally Weijl Peacocks Peacocks Esprit Esprit PimkiePimkie

OggiOggi

- The Italian word "oggi" means "today".- The Italian word "oggi" means "today". - The trademark was established in - The trademark was established in St. Petersburg in St. Petersburg in

1999. 1999. - - FFast-fashionast-fashion strategy – to update the collection every strategy – to update the collection every

month. They make big month. They make big continuous continuous salessales..

- Lines: - Lines: OGGI Ultra OGGI Ultra – for young girls from 16 to 24; – for young girls from 16 to 24; OGGI OGGI Collection Collection – for women from 25 to 40.– for women from 25 to 40.

- Stores: 14 stores in Kyiv, 5 in Dnipropetrovsk, 3 in - Stores: 14 stores in Kyiv, 5 in Dnipropetrovsk, 3 in Odessa, 2 in Lviv, 2 in Charkiv, 1 in Sevastopol; also in Odessa, 2 in Lviv, 2 in Charkiv, 1 in Sevastopol; also in Symferopol, Lugansk, Poltava, Kryvyj Rig etc. Symferopol, Lugansk, Poltava, Kryvyj Rig etc.

The stores are located in every mall.The stores are located in every mall.

Clothes cost: from 100 UAH ($ 12,5) for blouse to 800 Clothes cost: from 100 UAH ($ 12,5) for blouse to 800 UAH ($ 100) for coat.UAH ($ 100) for coat.

Colin’sColin’s

SELASELA

Wholesale and retailWholesale and retail Low cost clothesLow cost clothes Vendors of different Vendors of different nationalities (nationalities (chinese, chinese, moldavian, azerbaijanian moldavian, azerbaijanian people)people) Legal and Legal and spontaneuos marketsspontaneuos markets

CLOTHING MARKETS IN UKRAINECLOTHING MARKETS IN UKRAINE

The main actorsThe main actors

Odessa market Odessa market ««7-th kilometer7-th kilometer»» Kharkiv market Kharkiv market ««BarabashovoBarabashovo»» Khmelnitsky marketKhmelnitsky market

Working day’n’night and each serving hundreds Working day’n’night and each serving hundreds of thousands people per day of thousands people per day

ORIGIN OF THE CLOTHESORIGIN OF THE CLOTHES

ChinaChina TurkeyTurkey RussiaRussia Small-scale industry in UkraineSmall-scale industry in Ukraine

Second hand textileSecond hand textile Up to 5-6% of textile marketUp to 5-6% of textile market

Total value of the market Total value of the market = app. = app. 270 270 mil EU (3bil. Grn or $375 mln)mil EU (3bil. Grn or $375 mln)

90 000 tonns/ year – inported90 000 tonns/ year – inported = 2 kg/ person= 2 kg/ person

300 000 people 300 000 people

2009: 123 200 000 grn taxes ($15 400 2009: 123 200 000 grn taxes ($15 400 000)000)

The consumersThe consumers

Bought at least once

Never bought

43%

57%

Out of these 57% :Out of these 57% :

Used to buy in past

Are regularly buying now

39%

18 %

Revenue dependence Revenue dependence

36

37

38

39

40

41

42

43

44

45

less then1000grn1000-2000grn

The highest ratesThe highest rates

36

38

40

42

44

46

48

Western regions

Easternreagions

The attitudeThe attitude

Positive (tolerate)

Negative (do not tolerate)

Neutral

22 %

18%

60%

2010 Tax Code2010 Tax Code

60%

PRO CONTRA

?

What obstacles does textile What obstacles does textile industry face in Ukraine:industry face in Ukraine:

1. High taxes: 1. High taxes:

15% tax on income,15% tax on income,32% to pension fund,32% to pension fund,5% to Social Fund, 20% VAT5% to Social Fund, 20% VATFor example:For example: on 1 hryvna of income from .75 to .85 go on on 1 hryvna of income from .75 to .85 go on

taxes.taxes.

2. Lack of materials2. Lack of materials

3. Presence of Chinese and Turkish clothes on clothing 3. Presence of Chinese and Turkish clothes on clothing markets. markets.

For example:For example: average price for second-hand 90 cents per kg, average price for second-hand 90 cents per kg, sells for 100-200 hryvnas, 20-25 times more expensive.sells for 100-200 hryvnas, 20-25 times more expensive.

4. Low purchasing power of consumer. Ukrainian Clothes are 4. Low purchasing power of consumer. Ukrainian Clothes are expensive, it is well known in Europe but almost never expensive, it is well known in Europe but almost never bought in Ukraine because of prices.bought in Ukraine because of prices.