One key gauge of the health of China's housewares industry exports through the port of Hong Kong dropped 26 percent in the first two months of this year, and many plastics suppliers in that sector say they have seen a similar drop-off.
Not everything is declining niches like environment-themed products or well-designed goods were proving somewhat resilient. But many export-oriented companies interviewed recently at the Hong Kong Houseware Fair, held April 20-23, said the sector overall has been hit hard and it's not clear if it's reached bottom yet.
Hong Kong's Daka International Ltd., which has won design awards for its plastic household gadgets like can openers and salad washers, said its sales, for example, are down about 20 percent because of falling demand in its major markets of the U.S. and Europe.
But business development director Queenie Lau said the company is OK with that, because it is faring better than some competitors.
The company plans to stick with its strategy of making upper-end, pricier items, such as its One Touch-brand products, which work with the touch of one button. That line includes a stylish, handheld electric can opener that retails for $20. People are continuing to pay for attractive items that can make a household task easier, she said.
With electronics and special features, people are still willing to pay a little extra, she said.
Some firms are in worse shape: Hong Kong plastic molder Supreme Plastic Manufacturing Co. Ltd. said sales are down at least 40 percent from last year, and employment at its mainland Chinese factories has been cut from 2,000 then to about 1,200 now.
There is really nothing we can do, said Forenza Lai, marketing manager. We are trying to minimize our costs.
Jennifer Tsang, general manager of Hong Kong-based injection molder DD Industries Ltd., said her firm has seen sales drop about 20 percent. The firm makes acrylic and polystyrene cups, pitchers and kitchenware for well-known U.S. retail chains, and its customers are unclear on when the market will improve, she said.
My customers don't know what will happen, she said.
She said her company has had to significantly tighten terms for customers, demanding payment up front from companies it does not know well: Cash flow is tight in all the markets.
But she said the closings and scaling back of other Chinese factories is a positive for her, because it is starting to bring in more orders to her factory.
Hong Kong-based Abdoolally Ebrahim Group, which makes plastic and metal kitchen utensils, said it's also not getting clear signs from the market on whether it's hit bottom.
Sales were down 20 percent in January and February, and up a bit in March, but it's not clear if that means the market is picking up, said international sales and marketing manager Teddy Hung: I won't say it's an increase in demand. Maybe it's just an inventory correction.
One thing that firms are doing is designing products to take into account some of the trends resulting from the slowing economy.
People are spending more time at home preparing meals or entertaining. And enough consumers in North America, Europe and other traditional big markets seem to be still willing to spend money on products tied to healthier lifestyles, several companies said.
One American company exhibiting at the show said a focus on addressing consumers' environmental concerns is paying off in sales.
Pacific Market International, a Seattle-based maker of reusable plastic beverage and foodware items under the Aladdin name, is marketing bottles made of 100 percent recycled polypropylene, including 25 percent post-consumer content. It also is touting non-polycarbonate water bottles made from Eastman's Tritan copolyester, prominently labeled BPA-free to address what it said are consumer concerns about potential health risks from bisphenol A in polycarbonate bottles.
The economy has definitely not adversely impacted our sales, said Burcu Scherr, Shanghai-based marketing manager. We are up on sales compared to last year, and not many companies can say that.