Read the original text at Eurointegration.com.
Five years ago, a then-minister (who remains at the top of Ukrainian political parties) shared his outlook for Ukraine’s light industry sector in an off-the-record conversation. The official said its only chance to survive was if the Ukrainians would be willing to buy premium items from Ukrainian production.
Now this ‘dream’ might become a reality. But the Ukrainian light industry is trying to stay afloat through other means: national fashion brands have started to sell their products abroad, including in the E.U.
Most Ukrainian designers believe around 20 Ukrainian fashion-companies sell their products in the E.U. Of course, it is difficult to talk about massive sales but this presence is gradually increasing.
In Europe, there is a demand for Ukrainian original clothes.
Designer Olena Dats (Olena Dats' brand) believes now is the perfect time to enter the E.U. "On the one hand, Europe is interested in Ukraine. Our country is on the news, people sympathize with us, and everything related to Ukraine is causing interest. On the other hand, Ukrainian brands have already worked in Europe for several years, with some already recognized. Ukrainian clothing is associated with good quality and natural fabrics, which is extremely important for the consumers," says the designer.
It is a good time for Ukrainian brands because, today, clothes with embroidery and ethnic elements are popular in Europe. Ukrainians are traditionally strong in this.
Finally, another advantage of Ukrainian designers is their novelty and exclusivity. "Buyers choose unfamiliar brands to hedge against uncomfortable situations when women have identical outfits at a reception. When you buy clothing from leading global brands, this risk is very high," Olena Dats says.
Olena says her works were presented for the first time in 2008 at Paris Fashion Week and every year since then, she has participated in at least two Parisian show-rooms.
"Immediately after the first show, we found the first customers - in Belgium and later, French multibrand stores began to take our products," she said.
According to designer Olga Alyonova (ALONOVA brand), the majority of designer lines are sold through Paris Fashion Week and showrooms in Paris and London. "We were first presented at the Tranoi Paris Exhibition in 2012 and it immediately brought a wave of new buyers. And not just from Europe," she noted.
However, not all Ukrainian companies are starting their path to Europe from the 'capital of the fashion.'
Fashion House "RITO" is a designer and manufacturer of knitted garments; now it's active on the Lithuanian market and also has sales in the Czech Republic and Denmark.
"All designers want to start their way from France and Italy. These markets are just overloaded with fashion. However, other European countries are much more loyal to the new brands," says the director of RITO company Tatiana Abramova.
In her opinion, it is important the company did not have to adapt its collections to the tastes of Europeans. "As it turned out, tastes of people living in Scandinavia and the Baltic states almost coincide with the preferences of Ukrainians. It significantly simplifies our access to the European market. Of course, there is a completely different situation in southern Europe. Their tastes vary and you need much more preparation to work in these markets, Abramova said
Now the company sells about 10% of its production in E.U. countries. "We occupy a niche between luxury and mass-market; that is why we have one of the largest Ukrainian clothing sales in the E.U," noted the director of "RITO."
Despite progress being made for the massive entry of Ukrainian design companies into the E.U. (market), there are still numerous currency restrictions and fear to cooperate with the country at war.
"In 2014, many European companies, which previously worked with Ukrainian designers did not renew their contracts. They were not sure we would be able to timely fulfill the orders. Today, such situations do not take place. However, in recent years, Ukrainian brands have focused more on the Middle Eastern and Chinese markets ," Olga Alyonova says.
Why are Ukrainian designers interested in Asian markets more than European ones?
This is largely due to the echo of the crisis - many Europeans have reduced their spending on expensive clothes and are not ready to change their habits and buy more expensive things.
Olena Dats’ also notes that "Europe is spoiled with cheap clothes," and for Ukrainians, it is difficult to compete in this segment. "Therefore, our main sales are in the Middle East. The customers demand higher quality,but they are also willing to pay for it," she supposes.
Olga Alyonova adds that Ukrainian designers successfully promote their products on the North American continent. They have high expectations concerning the display of the Ukrainian clothes which will be held in June as part of an intergovernmental business forum in Canada.
Besides, the first steps have already been made to enter the Chinese market as well.
"In any case, we are talking about luxury products. First, there was a demand for luxury clothing and only then, ten years later, mass buyers became accustomed to the Ukrainian brands and started to trust them," Alyonova says.
In this situation, the main (what brings the greatest financial gains) problem in the Ukrainian light industry is access to global mass-market clothing remains ambitious.
First of all, it is very difficult to compete in price due to the features of Ukrainian currency regulation.
"We keep the brand in question the quality of the fabric, but it means that our products are dependent on imported materials. In an environment where we hand over foreign exchange earnings to the state and then buy the currency at a higher price, it is difficult to expect that our products will be inexpensive" - Olena Dats says
The second problem of foreign markets is the concerns foreign buyers have to work with Ukrainian companies. In this sense, the tastes of European wholesalers opposite tastes of customers.
"The way out of this situation may be to open a subsidiary in the E.U. It would greatly help promote the Ukrainian brand abroad. However, you need to obtain a license from the National Bank, which is almost unreal for a small company," Tatiana Abramova says.
"Many companies, at least, relatively large ones which are successful in the E.U., are considering transferring their production there. This helps to avoid constant problems with the passage of Customs and VAT refunds," notes Olga Alyonova.
And most importantly, the successful export depends on the high demand in the country. And then, unfortunately, the situation is close to disaster. "If demand in Europe declines, it would fall dramatically in Ukraine. This is a problem for Ukrainian designers because export (losses) cannot be replaced by demand in the home market," Alyonova said.
Therefore, the success of Ukraine’s fashion promotion is largely dependent on the preferences of Ukrainians.