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Garment Industry in China

China has the largest garment/ apparel industry in the world and is also the largest exporter of garments

to the rest of the world. The overall industry including men's wear, women's wear and kids wear has

grown

rapidly

over

the

last

2

decades.

China has become the world leader in apparels owing to its policy of economic reform and also due to the prevailing low labour costs. The government has also helped domestic manufacturers by introducing restructuring and consolidation programmes. Foreign investments have also helped the Chinese men's

apparel

industry

grow.

After becoming a member of the World Trade Organisation

(WTO) in late 2001
(WTO) in late 2001

, the opportunities have

become even more lucrative

for

the country to

increase

its

exports. China will

also face fierce

competition in the international markets and lowering of the trade barriers will also result in more

competition

for

the

domestic

market.

Most of the apparel manufacturers and dealers pay more attention to women clothing market and

neglecting men's clothing markets. This has lead to an underdeveloped market for men's apparels. With

the coming of

foreign companies in China, there has been a shift of focus on the men's apparel

segment. These companies are planning to set up exclusive retail stores for men's clothing in both

casual

and

formal

wear.

Most of the apparels that are exported are designed by foreign customers and these apparels are made from high quality imported fabrics. These garments are made for the mass market and are thus moderately priced. Some manufacturers also manufacture high quality and high- priced clothing for men.

Imports

Some of the largest importers of Chinese men's apparels are:

Japan

Hongkong

USA

Men's

Apparel

Industry:

Geographic

Distribution

in

China

The majority of apparel manufacturers have factories

located in coastal areas

, followed by the midland

provinces, and the smallest number of factories are located in the western provinces.

Factors
Factors

driving the geographic distribution of Apparel manufacturers in China:

Traditionally, the coastal area has been China's best and most suited location for apparel industry as well as for upstream industries like the textile industry and synthetic fiber industry. There is also large number of skilled labour availability in the region.

The first and main Economic Development Zones were opened in the coastal region. Ningbo, Qingdao, Zhuhai, Haikou, Shenzhen, Shanghai, Dalian, Xiamen are all located in coastal areas.

The coastal area has high population density with higher income and people in this region are also more conscious of fashion than in other areas, thereby leading to better market potential.

Men's Apparel Industry Analysis

Strengths
Strengths

The country is a low cost producer of men's wear

 

The country manufactures high quality garments, relative to cost

The manufacturers in the industry require short lead-time, owing to large capacity and well- developed infrastructure

The manufacturers provide flexibility in product offerings

Weakness

 

Manufacturers lay less stress on innovation and R&D;

Slow pace in adopting international standards (e.g. cotton grading)

Manufacturers invest less in brand equity

 

China's Garment Industry Booms

One hundred years ago, a Shanghai newspaper flashed a banner saying "How can

they

survive

if

they

have

no

clothes

on?"

One hundred years later, China has become the largest producer and exporter of

garments

in

the

world.

In old days, the textile industry was self-ample and everything was done by hand.

The country only had 20 cotton

500,000

spindles

mills that

80

had an annual production capacity of

years

ago.

During the first few years after the founding of the People's Republic of China in 1949, the average annual production capacity was no more than five million spindles.

As

a

result, the

government adopted a ration policy by issuing cloth coupons.

Over more than 30 years, the annual output of cotton cloth in the country increased

to 15.35 billion meters by 1982, which was barely sufficient to meet the needs of the

population.

Cloth

coupons

were

abolished

the

following

year.

Since the country began its open-up policy and reform in the late 1970s, the garment industry has grown at a rate of 15.7 percent annually. The output in the Eighth Five- year Period (1990-1995) totaled 30 billion garment items, equaling the total for the

previous

40

years.

Since 1994

, China has remained the largest producer and exporter of garments in

the world. The total volume of exports accounts for one-sixth of the world total. In

1999, China turned out 10 billion garment items. The country's output of synthetic

fibres

totaled

52

billion

tons

a

year,

which

is

the

largest

in

the

world.

Over the century, China has become home to the world's leading textile industry as the choice of attire in China has changed dramatically.

Garment industry trying to meet foreign demand

Last Updated(Beijing Time):

2006-07-24
2006-07-24

16:44

China National Textile and Apparel Council recently issued its 2005-2006 Annual Report on China's Textile Industry. The report pointed out the total profit of garment companies above designated size grew by up to 33.09 percent in 2005, the fastest-growth-year during the Tenth-Five Year Plan period. Resorting to the advantages of market, resource, brand and technology, some companies or groups with good performance kept their expansion to become the leaders of the industry and speeded up their internationalized steps. Meanwhile, some SMEs, due to their small scales and their dependence on domestic or overseas middlemen to obtain orders, seriously lack the capability in exploring new market and resisting risks.

According to the investigation by China National Garment Association, the total actual output of garments reached 46.5 billion pieces in 2005, up 11.2 percent compared with 2004, among which 17 billion were weaving garments and 29.5 billion were knitting ones. In 2005, the total exported value of garments increased by 19.9 percent and the total exported volume by 8.1 percent, which indicated the increase of the value was 11.8 percentage points higher than that of the volume.

The "White Paper on China's Textile" pointed out, the overall competitiveness of the textile industry

has been further strengthened and the added value of exported textile products has been improved

that Chinese garment companies have secured a certain place in the international middle and high-

end market; a group of renowned brands in the domestic market have emerged; the structure of the

textile industry has been readjusted and the concentration for export production has been increased.

Meanwhile, China's textile industry is still faced with such structural contradictions as the lack of

innovative ability and self-owned brands. Textile enterprises are generally based on OEM for export

and boast a very low proportion of self-owned brands, thus possessing little control over export

marketing channels. Currently, China's high-end textile and garment market is mainly dominated by

international famous brands. Domestic export enterprises are mainly based on OEM, and the profit

made by these enterprises takes up only around 10 percent of the overall market profit. Although the

textile industry claims 175 national famous brands, none of them are internationally renowned.

According to the survey by China National Garment Association, while textile enterprises above designated size enjoy sustained growth in terms of their overall performances, 20 percent of SMEs suffer increasing losses. Among all garment companies, shirt manufacturers suffer most serious losses with the loss proportion reaching nearly 50 percent.

While the comparative advantage in labor gives way to that in innovation, which determines the added value in the supply chain, in global textile competition, many strong domestic companies start the attempt to build up international marketing networks, improve the quality and promote the brand, so

that

they could gradually break away from the competition based on expanding scales at a lower

level. Fostering self-owned brand names, investing more in the design and campaign of brand,

increasing technology content and controlling marketing channels are now becoming the key for the

textile industry to move toward the high-end of the supply chain and improve the added value of its

products .
products .

Chinese garment manufacturer Meters Bonwe has attracted more than 250 garment factories and 1,600 chain stores for the production and sales of it products. By the year 2005, the sales volume of the company had totaled RMB3 billion yuan, with its annual sales volume of 30 million pieces (sets). It's been selected as one of the top hundred garment companies in China for successive six years. Meters Bonwe has become the most favorite brand for Chinese young people.

To take the lead in garment fashion, Meters Bonwe attaches great importance to designers. It has not only employed famous talents from both home and abroad but also invited a renowned French designer as the design supervisor. Since its establishment 11 years ago, Meters Bonwe has fostered a team of designers on a par with their international counterparts. It has also co-operated with world famous designers from France and Italy etc. to get first-hand international fashion information, including material, design, style, and so on. To facilitate the collection of local styles around the world, the company has moved its headquarter from Wenzhou to Kangqiao, Shanghai Nanhui District, which is close to Pudong International Airport. Now, Meters Bonwe designs more than thousands of new

items of garments annually.

"In recent years, some overseas agents have initiated contacts with us to try to set up specialty stores in countries and regions like South Korea, Australia and Middle East; however the result is not very desirable." Wu Huijun, director general of Ningbo Boyang Garment Co., Ltd. said, "but we've drawn many lessons from the attempt for international operation." Wu introduced that they didn't have special designing teams for the foreign-based specialty stores since the sales volume there was small. They just delivered products that catered for the local markets in styles and sizes from domestic samples. The biggest problem was that the supply period was too long and they were unable to make rapid reaction to the market. On one hand, when some best-selling products were out of stock, a timely follow-up delivery could not be ensured; on the other hand, the cost for returning goods that didn't sell well was very high.

"When it comes to brand internationalization, there should be a brand development strategy at first. And around the strategy, a complete system of design, development, sales and service should be set up in the target market country as back-up. In addition, the company must integrate into the local culture and understand the needs of local consumers." Wu Huijun said, "previously, we only looked to the price advantage enjoyed by our products in the local market; however once we entered into the market, we realized that brand internationalization was far more complex than mere cost competition."

CHINA, TEXTILE AND GARMENT INDUSTRY

Order

#:

T1283_2007TX;

 

US$

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Published

by

Research

in

China,

August

2007;

36

Pages;

31

Exhibits

Available in Pdf or hard-copy format I n the first quarter of 2007, the Chinese textile & garment industry realized operating revenue

and profits of RMB 594 billion and RMB 19 billion respectively, up 24.26% and 36.63%. Fixed assets investments reached RMB 39.063 billion, up 31.61% year-on-year, of which chemical fiber investments were RMB 5.091 billion, up 68.93%; textile product investments RMB 23.188 billion, up 24.6%; and garment investments RMB 10.694 billion, up 36.6%.

From January to April of 2007, China's total import & export value of textiles and garments reached USD 51.19 billion, up 14.27% from a year earlier and occupying 8.05% of China's

total foreign trade value. Exports of textiles were USD 17.23 billion, up 11.48%; and the exports of garment were USD 28.21 billion, up 17.4%.

China Textile Garment Industry Report, 2007

2008-09-05 08:58:19 - www.researchinchina.com offers China Textile Garment Industry Report,

2007http://www.researchinchina.com/Htmls/Report/2008/5131.html

Any queries, please contact us at report@researchinchina.com

In the first quarter of 2007, China textile & garment industry realized prime operating revenue and profits RMB 594 billion and RMB 19 billion respectively, up 24.26% and 36.63% separately. The fixed assets investment achieved RMB 39.063 billion, up 31.61% year-on- year, in which the chemical fiber investment was RMB 5.091 billion, up 68.93%; the textile products investment RMB 23.188 billion,

growing 24.6%; and the garment investment RMB 10.694 billion, rising

36.6%.

From Jan to Apr of 2007, China's total import & export value of textiles and garments reached USD 51.19 billion, up 14.27% from a year earlier and occupying 8.05% of China's total foreign trade value, in which the export value of textiles and garment was USD 45.439 billion, up 15.08%; the export value of textiles was USD 17.23 billion, up 11.48%; and the export value of garment was USD 28.209 billion, up 17.4%.

total foreign trade value. Exports of textiles were USD 17.23 billion, up 11.48%; and the exportshttp://www.textile-info.com/1283.htm China Textile Garment Industry Report, 2007 2008-09-05 08:58:19 - www.researchinchina.com offers China Textile Garment Industry Report, 2007http://www.researchinchina.com/Htmls/Report/2008/5131.html Any queries, please contact us at report@researchinchina.com In the first quarter of 2007, China textile & garment industry realized prime operating revenue and profits RMB 594 billion and RMB 19 billion respectively, up 24.26% and 36.63% separately. The fixed assets investment achieved RMB 39.063 billion, up 31.61% year-on- year, in which the chemical fiber investment was RMB 5.091 billion, up 68.93%; the textile products investment RMB 23.188 billion, growing 24.6%; and the garment investment RMB 10.694 billion, rising 36.6%. From Jan to Apr of 2007, China's total import & export value of textiles and garments reached USD 51.19 billion, up 14.27% from a year earlier and occupying 8.05% of China's total foreign trade value, in which the export value of textiles and garment was USD 45.439 billion, up 15.08%; the export value of textiles was USD 17.23 billion, up 11.48%; and the export value of garment was USD 28.209 billion, up 17.4%. Table of content 1 Industry sees steady development, growth of benefits to slow down 1.1 Main benefit indicators increase " id="pdf-obj-5-24" src="pdf-obj-5-24.jpg">

Table of content

1 Industry sees steady development, growth of benefits to slow down 1.1 Main benefit indicators increase

1.2

Growth of investment slows down

  • 1.3 Export growth rate decreases

  • 1.4 Raw material price rises

  • 1.5 Consumption achieves big upgrade, and brand consumption gradually

takes shape

  • 2 Development analysis of China textile industry

    • 2.1 Industry analysis

    • 2.2 Enterprise analysis: Fujian Zhonghe Co., Ltd

      • 3 Development analysis of China textile industry

3.1

Status quo of China textile industry

3.2

Achieve breakthrough: strategy of building independent

brands

 

3.3

Related enterprises analysis

  • 3.3.1 Septwolves

  • 3.3.2 Dayang Trands

  • 3.3.3 Youngor

    • 4 Other related industries and enterprises

      • 4.1 Jewelry industry

      • 4.2 Hair goods industry

Research Report On China's Garment Industry

This report presents a full view of China's garment market, provides analysis and suggestions on

how to entering this fast growing market in China. The report includes

analysis on market shares,

competition, key players, market segmentation, import & export changes, sales channel, buyer's

behavior, entry barriers, industrial environment and policy trends; introduces the procedure for

exporting products to China, Chinese inspection & standards system, a list of major importers &

agencies, annual trade fairs in China; provides full forecast to 2010 and key statistical data.

Through this research report, readers will know

who are the major players and supervisors in

China’s garment market, what are the market entry opportunities and barriers, where is the right

place to sell products and when is the booming season, how many countries / regions exporting

their products to China and where they go…
their
products
to
China
and
where
they
go…

Currently, China is a large garment manufacturer, consumer and exporter. According to the data by

the National Bureau of Statistics of China, the total domestic garment consumption in China was

up to over RMB 750 billion in 2006. Taking various related factors into consideration, we can

forecast, in the future 5-10 years, the total consumption in China garment market shall keep a

persistent annual increase at 5%-8%.
persistent
annual
increase
at
5%-8%.

The total garment import of China had been kept persistent and stable increasing trend from 2002 to 2006, with a year-on-year increase of 5.4% in 2005, and 4.8% in 2006, up to USD 1.585 billion. The consumption of imported garment accounts for about 1.6% of the total garment consumption

of

China,

with

small

market

share.

China mainly imports garment from Hong Kong, Korea, Japan, Italy, etc, having imported products flow to coastal developed regions in China east, including Guangdong, Shanghai, Beijing

and

Jiangsu.

The sale income of the top 10 China garment manufacturers accounts for only 12% of the whole industry, with lower centralized corporate sale income; large-scaled corporations in Guangdong,

Zhejiang and Jiangsu Provinces accounts for

57%
57%

of the nation-while large-scaled corporations, so

China has achieved higher level in the regional centralization of the garment industry.

The leisure consumption trend of men’s garment is much outstanding. With the purpose to fit for the international fashion trend, men’s garment brands had launched the conception of business leisure since 2004, after which the business leisure were had become the mainstream in China

men’s

garment

market.

In the viewpoint of the women’s wears consumption in China, consumers follow the European and American fashion trend closely, with the trend of leisure and comfort in the whole garment

requirements, so the garment with dual function of working suit and taste leisure has been the

choice

of

the

OL

female

consumers.

On the consumption period of children's wears, most of consumers are purposeful and rational in purchasing children’s wears, for the growth demands of children or for gifts for children in

festivals, so the sale of children’s wears is mainly centralized in the May Day, Children’s Day,

National

Day

and

Spring

Festivals.

The developed regions including the southeast coastal region and Beijing, Tianjin is the optimal regions for the foreign garment manufacturers to enter in China consumption market. Especially,

in Dalian City in Liaoning Province, known as the fashion city of China, the per capita annual consumption for the garment is RMB 2,850, which is the first in China.