Ocean Sky International Limited - Ocean Sky International Ltd ...

COMPETITION AND COMPETITIVE STRENGTHS
COMPETITION
As an export-oriented enterprise, our overall competition environment and our market competition are
subject largely to global developments. We identify the following three developments as the main factors
that would affect the competition in our business:
Increasing Demand for Manufacturers with Global Capability
As a growing trend, US and EU apparel retail companies are concentrating on developing marketable
brand names internationally in order to increase their business. In order to reach out to customers in
various countries worldwide in short lead time, these apparel retail companies are outsourcing to
manufacturers who are not just cost competitive but also have a wide spread of operation capability near
to their markets. These apparel retail companies are likely to look for manufacturers with global operation
capability and the size and flexibility to respond to their specific requirements within short notices.
We expect that more apparel manufacturers would globalise their operations. Operating in nine
countries, our Group is well positioned in this regard and would continue to explore new avenues to
further expand and strengthen our global operations to meet future challenges.
Increasing Demand for Reliable and Responsible Manufacturers
Apparel retail companies are more cautious nowadays in the selection of manufacturers. The apparel
business is subject to fast changes in fashion trends and keen competition in the retailing market.
Besides cost competitiveness, short lead time and timely delivery have become the most crucial factors
to apparel retail companies when selecting manufacturers. Also, with the global market becoming more
and more transparent, they would like to make sure that the manufacturers who undertake their jobs
must comply with stipulated social, labour, health and environmental standards.
The US and EU apparel retail companies are more likely to appoint manufacturers who have proven
track records as reliable and responsible enterprises. In this regard, we envisage that our competition will
be from manufacturers with equally established track records.
Impacts of Trade Liberalisation
Our Directors are of the opinion that the abolition of the textile and apparel quota system in 2005, via
agreements entered into under the auspices of the World Trade Organisation, would generally result in
increased competition. Manufacturers, including ourselves, can take advantage of the liberalisation to set
up more apparel manufacturing operations without being restricted by quotas on export. Hence, we may
face new players who may be established players in other markets to compete in our existing markets.
Trade liberalisation would also bring about new opportunities for venturing into new businesses related to
the industry, such as trading and retailing of apparels, in the once protected markets such as the PRC.
We envisage that the industry would become more integrated in the future. Companies with bigger
resources and larger network are more likely to be able to take full advantage of this industry integration.
The apparel business is one of the world’s largest and most globalised businesses. Opportunities for
growth and for integration are abundant. To the best of our knowledge, some of our main competitors are
Sing Lun Holdings Limited in Singapore, PCCS Group Berhad in Malaysia and Carry Wealth Holdings
Ltd in Hong Kong.
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