Jaba USA perched for elimination of textiles quotas

Anthony Guerra, Staff Staff, March 8, 2004

Jaba USA, a subsidiary of the China-based Jiaobao Group, is positioning itself for an anticipated influx of business following the expiration of U.S. textiles import quotas in January 2005, according to the company's vice president of sales and marketing Allen Yan.

The company — which in March 2003 opened its first U.S. showroom, along with a sales and marketing office here — makes top-of-bed products such as comforter sets, bed-in-a-bag, and soft window treatments. Jaba also produces decorative pillows and bathroom accessories.

Jaba targets two segments of the American market — the first is the Latino community. "This line is very value-oriented with low price points. Bedding sets range from $15 to $30 (wholesale)," said Yan. The second line targets the mass market. "These also target the American market but are aimed more at the general population," he said. The price tag for that line ranges from $16 to $50 (wholesale) for a bed-in-a-bag set.

The company's products are made with poly cotton, cotton and chenille, using jacquard techniques. Yan expects Jaba's use of cotton to expand as quotas fall by the wayside. He said that currently, because non-governmental Chinese factories have to buy quota, the prices of their products are artificially inflated. For example, he said that today a U.S.-bound $12 12-pack of T-shirts has $4 to $6 slapped onto its base price — the cost of buying quota for the product. In 2005, that additional cost disappears, bringing the cost of Chinese goods even closer to rock bottom than they are now.

Yan said that Jaba will not work directly with retailers to market its products, preferring to use established distributors in the United States. Jaba products will be labeled with either the distributor's brand or the retailer that carries them. Yan declined to name any distributors or retailers of Jaba products.

"This is a good strategy for us, because otherwise we would have to start building our own distribution network from the ground up, which is not easy," said Yan.

"Even though my English is good, I am Chinese and I don't know some cultural differences. For example, I still don't understand American football. I can talk about the product a customer wants, but not about the culture he is interested in. I think the relationship is very important in the selling process. Also, in creating product, sales people who understand the culture and market need to work with the buyers," he added. "So we have our strategy in place, and I think that is good for us."

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