HK Watch & Clock Fair 2010 On-site Survey Christine Kwok Managing Consultant Actrium Solutions 10 Sept 2010

2 Methodology Date of Fieldwork:September 6 - 8, 2010 (*Day 1 to Day 3) Target Groups:405 exhibitors; 700 buyers Method:Face-to-face interview at the Exhibition Venue

3 Key Findings Exhibitors

4 Respondents’ Profile

5

6 Exhibitors’ Major Export Markets

7 Exhibitors’ Core Businesses

8 Exhibitors’ Outlook for 2011 Is Positive

9 Biggest Growth Regions Are Chinese Mainland, US & India

10 Over 60% of Exhibitors Are Currently Selling/ Planning to Sell to Chinese Mainland

11 Nearly 40% of Exhibitors Selling to Chinese Mainland Have Appointed Sales Agents

12 66% of Exhibitors Selling to Chinese Mainland Anticipate Larger Sales Volume

13 Strategies to Develop Chinese Mainland Market

14 Strategies to Cope with Rising Costs

15 Over 80% of Exhibitors Use HK Trade Fairs to Find New Buyers

16 Nearly 80% of Exhibitors Use Trade Fairs to Launch New Products

17 Over 80% of Exhibitors Have Received/ Are Negotiating Orders at the Fair Base: Valid Respondents (N=400)

18 Key Findings Exhibitors Key Findings Buyers

19 Respondents’ Profile

20 Major Markets Served by Buyers

21 Buyers’ Core Businesses

22 Over 70% of Buyers Mainly Source/ Trade Complete Products

23 Over 60% of Buyers Source for Items Above US$15 (FOB)

24 Buyers’ Major Sales Channels Are Watch Specialty Outlets/ Wholesalers

25 Buyers’ Market Outlook for 2011 Is Positive

26 Biggest Growth Regions Are Chinese Mainland, South East Asia & India Base: All Respondents (N=700)

Most Popular Product Segment Is Fashion Watches 27

Most Popular Colours Watch Dial Watch Band Black (48%) White (33%) Metallic (24%) Most Popular Top 3 28 Watch Case Black (46%) White (27%) Metallic (25%) Black (35%) Metallic (31%) Silver (31%) Black (46%) Black (35%) Metallic (31%) Black (46%) Black (35%) Silver (31%) Metallic (31%) Black (46%) Black (35%) Metallic (25%) Silver (31%) Metallic (31%) Black (46%) Black (35%) White (27%) Metallic (25%) Silver (31%) Metallic (31%) Black (46%) Black (35%) Black (48%) White (33%) Metallic (25%) Black (48%) White (33%) Metallic (24%) Metallic (25%) Black (48%) White (33%) Silver (31%) Metallic (24%) Metallic (25%) Black (48%) White (33%) Metallic (31%) Silver (31%) Metallic (24%) Metallic (25%) Black (48%) White (33%) Black (35%) Metallic (31%) Silver (31%) Metallic (24%) Metallic (25%) Black (48%) White (33%) Black (46%) Black (35%) Metallic (31%) Silver (31%) Metallic (24%) Metallic (25%) Black (48%) White (33%)

29 Nearly 50% of Buyers Have Increased No. of Orders, Order Size & Unit Price

30 18% of Buyers Expect Delivery within 1 Month

31 Nearly 80% of Buyers Use HK Trade Fairs to Contact New Suppliers

32 26% of Buyers Have Sourced Branded Timepieces

33 Among Those Who Have Sourced Branded Timepieces, 71% Are Currently Sourcing / Considering Sourcing HK Brands

34 The Biggest Edges of HK's Watch & Clock Industry

35 60% of Buyers Have Placed/ Are Negotiating Orders at the Fair

36 Conclusion

37 Conclusion Market Outlook in 2011 Both exhibitors and buyers have positive market outlook in About 60% of them expected the market in 2011 to be better or much better then For exhibitors, the biggest growth regions are expected to be the Chinese mainland (50%), US (20%) and India (18%). For Buyers, the biggest growth regions are expected to be the Chinese mainland (62%), South East Asia (15%) and India (13%). Nearly 70% of exhibitors expect increase in sales volume to Chinese mainland. Nearly 50% of buyers have increased number of orders, order size and unit price in In order to cope with the rising costs, nearly 50% of exhibitors who have manufacturing plants in Chinese mainland indicated that they will increase price. So far this has not affected their sales volume.

38 Conclusion Competitive Edge of HK 83% of exhibitors mainly use HK trade fairs to find new buyers. Nearly 80% of buyers mainly use HK trade fairs to contact new suppliers. 82% of exhibitors have either received or are negotiating orders at this Fair. Buyers consider competitive edge of HK’s watch & clock industry includes high product quality and innovative product design. Among those buyers who are sourcing branded timepieces, over 70% are currently sourcing/ considering sourcing for HK brands.

39 Key Findings Exhibitors End Thank You