The future of the promotional product market

promotional product

You’re a manufacturer, importer or distributor of promotional product and you want to know what the promotional products market will look like in 5 years?

For more than 15 years I’ve worked in the market of promotional products world wide. I visited professional trade fairs all over the world, met many actors in this market, some quite large as well as very small ones. I’m responsible for the marketing programs of the Horizon Group and I NEED to know what the international promotional products market will look like in a few years.

Ten years ago the European market structure was a structure with simple steps:

  • – Chinese factories only sold through Hong Kong based traders who, in turn, sold to importers.
  • National manufacturers and importers were selling their products to regional distributors.
  • Regional distributors were selling their products to the final clients.

There were exceptions for sure, but this was the structure through which 85% of the business was done.

Today the market has changed a lot :
First of all internet did shorten distances and made communications quick, easy, and clear as images could be added to show and explain products, plans and logos. Secondly a few distributors started to source their large orders directly from the HK based traders. The importers, not to loose on these large volumes started to sell directly to large accounts directly or through “daughter companies”. Other distributors were somehow obliged to source from HK as well to keep themselves competitve.

  • Chinese factories now sell directly to distributors worldwide, they don’t need the HK traders anymore as their market opened itself to export and as they were now able to hire young students able to communicate in french.
  • National importers are selling small quantities to distributors and larger volumes directly to large accounts.
  • Regional distributors are sourcing along the methods pointed above and are selling nationwide through their websites paying google-add programs.
  • Those distributors unable to source directly from the Far East are loosing the large orders and try to maintain themselves by selling small volume orders.

So how will this market evolve in the next 5 years ? Who will grow, who will disapear, who will survive ?

Again internet will bring the biggest changes in the market, Many Chinese companies started already to build their websites, only in English for now, but soon in many languages. Today these websites can only be found on their businesscards or in directories like Ali-baba or Hong Kong Enterprise, but already several of them start to buy google-add campaings on keywords displaying their product range on top of Google search results.

On the other side of the market structure, marketing directors or even the medium size company owners starts to “Google around” on the web to find cheaper sources for their promotional products.
Both will meet soon, through the internet, disconnecting traders, importers and distributors.
Paralell to this phenomenon the Asian groups are starting to establish European or US based agencies to catch the margins on the local markets.

Profesional organisations like PSI in Europe or PPAI/ ASI in the US try to protect the market not accepting Asian exhibitors at their trade fairs. They have to do it, since their biggest clients today are still the importers, but in doing so they create market space for trade fairs like Pro-Dimex, Asia Trade and others, popping up in Europe and America.

Searchable online databases like Sage and European sourcing will either accept Asian companies to appear on their lists, but for example Sourcing City in the UK already opened it’s database to Chinese manufacturers.
But THE database of tomorrow will be… Google… No restricted search, no market protection, everybody can find everything in a few clicks…

Will innovation, service and quality save the local actors ?
Will the advice and experience of distributors of promotional products always be needed
Will importers will always keep stock ?