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| Issue date:01/12/2007 |
| ATA Journal for Asia on Textile & Apparel - Dec 2007 Issue |
| Source:Journal for Asia on Textile & Apparel |
| by Staff Reporters |
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| The global denim jeans market is estimated by the industry to value at US$19.7 billion in 2007 and the projected volume is 1.8 billion. In other words, every 3.7 people on earth own one pair of denim jeans. Consumers report that they love the hand feel of cotton jeans, and new material technologies are being developed to further improve comfort and performance of denim. |
Though the jeans market is promising in the global sense, market in the developed world is saturated. Average American owns seven pairs of jeans and buys two per year, whereas consumers in Western Europe on average own four jeans and buy one per year.
Source: DenimVillage
Cotton Inc expects that the volume driver in the future will be population growth. While the global denim market currently grows at an estimated average rate of 4% a year, half of the growth is originated from Asia.
China produces 3 billion meters of denim fabrics in 2006
At the recent 2007 Global Denim Event held by USA Cotton Inc and the Cotton Council International in Shanghai in mid-November, Xu Wenying, Vice-Chairman of the China National Textile Association and President of the China Cotton Textile Association outlined the current denim industry of China.
Xu Wenying |
The output of denim in China increased from one billion meters in 1999 to three billion meters in 2006, and its export reached 534 million meters in 2006.
These China-made denim products are increasingly manufactured by shuttleless weaving machines, which can be used for high-end denim production, accompanied with other related advanced machinery including warping machines, as well as sizing and dyeing combined machines.
Medium- and low-end products, however, continue to dominate the Chinese denim production, as advanced technologies are not yet extensively used in the sector.
Mr Xu says: "China's denim fabrics takes 60% of the world output, while only one-tenth of the denim fabric manufacturers are considered having innovative strength." Most of the Chinese enterprises are taking processing contracts with clients' samples, or original equipment manufacturing (OEM) orders.
Consequently, there is an over-supply in the medium- and low-end denim segment, leading to below-full production in the industry. Some of the Chinese enterprises are working only 60%-70% of their full capacity. Their profit margins thus shrink, imposing pressure on some dye and auxiliary suppliers.
Other unfavorable external factors affecting the Chinese denim industry include:
sharply rising prices of cotton;
free trade after the end of quota system in the world;
sliding tax rates for imported cotton in China;
appreciating renminbi; and
declining Chinese export tax rebates.
Mr Xu encourages enterprises to advance themselves to develop and manufacture higher-value products, and to streamline internal production and refine management skills.
On the front of environmental protection, pollution issues in dyeing, sizing and washing require proactive and prompt responses from the industry. Further considerations on corporate social responsibility, such as working and living conditions of labor are also crucial in establishing a truly sustainable enterprise. As the industry is under consolidation, no enterprise is able to ignore emerging needs and demands in the market, he concluded.
Consumers love casual jeanswear
Percentage of customers in age groups who like or enjoy denim wear (Sources: Cotton Inc and the Cotton Council International) |
With reference to a recent survey of Cotton Inc and the Cotton Council International, consumers generally prefer clothing that are comfortable, casual and have higher added value, yet at a more competitive price level. Other benefits, such as safety, easy-to-care property, use of natural materials, and detail labeling, are advantageous in a buyer decision process.
Fashionable denim is described as unfussy, comfortable, contemporary and sophisticated.
New fabrics with textile biomaterial engineering
Professor at the Institute of Textile and Clothing (ITC) of the Hong Kong Polytechnic University, Dr Li Yi introduced some latest fabric developments of the research institute.
The institute is applying for a patent of its innovative all-cotton moisture management fabrics (MMF). The textiles have specially designed structure on two surfaces, with which the fabrics are able to transfer liquid water from inner surface to outer surface, thus keeping the inner surface dry and cool. It also dries quickly.
Cotton Inc says that the fast-dry feature fits the Chinese consumer behavior. Chinese consumers in average wash their clothes five times a week. About 63% of them value a lot on fast-dry performance. Currently, less than 10% of Chinese consumers have clothes dryers, and forecasts indicate that dryer penetration will grow by 1% over the next decade. Consequently, fast-dry denim is expected to be attractive in the China market.
In addition, ITC is also developing other textile bioengineering technologies, including denim fabrics that offer super hydrophobic property; UV blocking up to UPF50; infrared radiation (IR) absorption to keep fabrics warm; durable antibacterial features; and dermatological functions including skin moisturizing.
Innovative finishing technologies to improve functionality
Additionally, Cotton Inc has developed innovative finishing technologies to improve performance of cotton wear.
"Storm denim" technology is a water repellent and breathable finishing for 100% cotton denim. According to Cotton Inc, the technology can be applied in garment form to maintain styling effects. The engineered cotton denim keeps rain out, but let moisture or air go through in either direction.
"Storm denim" finishes give fabrics water repellent property |
The secret of "Storm denim" comes from its denser construction that exhibits better protection. Moreover, in terms of garment finishing, fluorochemical water repellent finish by dip or extract, or metered addition is given. Hence, wearers of it can be protected from rain, snow and wet conditions.
"Stay True Cotton" is the latest innovation from Cotton Inc. As indigo dyed yarns are ring-dyed, only the surface is dyed, but not the middle of the yarn. When jeans are worn, dye on the surface is worn away, leaving a noticeable fading in the appearance. Cotton Inc says that indigo denim garments finished with this "Stay True Cotton" technology can retain almost all of the original color after 25 home launderings.
Developing eco-friendlier production
In recent years, consumers are progressively demanding for eco-friendly denim products, including those made of organic cotton.
The supply of organic cotton currently represents about 0.2% of the global aggregate cotton output. The remaining supply is mainly conventional cotton (71.8%) and integrated pest management (IPM) cotton (28%).
In a study of the University of California Extension Service in 2002, researchers found no difference between fiber length, strength, or micronaire between conventional and organic cotton. However, organic cotton production costs running approximately 50% higher than those of conventional cotton. A price premium is often given to offset higher production costs.
Performance of Stay True Cotton-engineered jeans compared to that of regular jeans (Note: Both jeans have regular softeners applied) (Source: Cotton Inc) |
Recycled cotton yarns, meanwhile, is a new eco-friendly alternative. US-based Martex Fiber Southern Corporation, for instance, uses a proprietary blending process to sort, re-fiberize and blend different textile by-products. No new cotton dyeing is necessary to produce the resulting recycled cotton yarns, called "eco2cotton". In general, recycled cotton gives similar appearance to first-time cotton.
Suppliers along the textile supply chain are also actively pursuing eco-friendlier denim production. A large quantity of water and steam is consumed in the processes, and this needs to be reduced.
Dyeing, post-treatment of fabrics, as well as garment finishing are potential fields for eco-friendlier approaches. However, Freshtex, a garment-finishing supplier based in Germany, remarked that although eco-friendlier denim products are being pursued, consumers might have to accept compromise for lower colorfastness (if natural products such as leaves or tea are used), shade variations (or reduced rewash), and higher costs.
Characteristics of major denim markets
China
"Retail apparel sales in China are estimated to be RMB290 billion (or US$28 billion) in 2007." Sherry Wu, Executive Account Manager of Cotton Inc Shanghai continued, "Denim accounts for 11% of total apparel purchases, and denim jeans represent up to 81% of the total denim purchases made in the country."
Regarding the denim ownership, Chinese consumers pay an average of RMB89 or US$12 per pair of jeans, and about 26% of consumers currently do not own any denim clothing.
This can be explained by the fact that only 4% of Chinese consumers intend to wear jeans to work, compared to more than 60% of US consumers wearing their jeans to the office. Nonetheless, the growing middle class and the consumer preference to Western products present opportunities for denim suppliers.
India
Like China, India is considered a key emerging market for denim as Indian population have earned an increased disposable incomes and more consumers have shifted to branded apparel.
"There are about 23 denim mills in India, which collectively achieve a denim output of 600 million meters per annum," says Aamir Akhtar from the denim division of Arvind Mills.
Given that trade barriers have been removed among nations and regions, there emerged a new group of manufacturing start-ups, which are benefited by technological advances for improved industrial productivity. As a result, monopoly of the market is disappearing.
He further says that a "blue ocean" strategy searching for untapped market space is needed. Potential products may include rural workwear (there are 700 million workers), industrial workwear, ethnic womenswear, upholstery and drapery.
Japan
Jeans casual chain store is a strong player in the Japanese jeans market with a rising number of stores.
Middle-priced market between US$40-80 at Japanese general merchandise stores (GMS) is more potential, whilst low-priced (US$ 15-30) products has become a very difficult market with Western-based discount GMS, according to Michikazu Kobayashi, Executive Director of Edwin Co Ltd. Edwin is a well-established denim producer and marketer founded in Japan in 1947 and has expanded to Europe since 2003.
"In the Japanese jeans industry, spinning mills have been investing aggressively for latest sewing machines in the world. The industry also works closely with material developers, garment trim makers, sewing factories and washing mills for new wash development," he says.
He believes that in the future, Japanese denim makers need to differentiate with original product development that well suit Japanese consumer tastes.
Europe
In Europe, "specialized retail has lost their market shares, while vertical retail organizations such as H&M, Zara, Mango, Jack & Jones and Esprit are rapidly gaining ground," says Heiner Sefranek, CEO of Mustang Group.
"Fewer brands still manufacture themselves, but they depend more on service manufacturers who produce for everybody. Product-driven competitive advantages loose in significance as products become more similar in quality level and product message. As well, quality is less defined any more by actual product quality but rather by brand image. For a brand, marketing becomes more important than technical production know-how," he says.
Mr Sefranek suggests that total verticalization, sustainability and function/performance are significant trends for tomorrow.
Vertical retailers keep on growing, and wholesale suppliers are increasingly expanding into the retailing business, such as Bestseller Group. Brand suppliers are expanding into retail themselves with partnerships (shop in store), own and/or franchise monobrand stores. Apart from the conventional competition among retailers, a group of functional brands including Adidas, Nike and the North Face is predestined to strongly enter the denim market, Mr Sefranek says, further intensifying the competition.
Additionally, ecological standards and sustainable strategies are more crucial as denim-making processes historically consume a large quantity of water, energy and chemicals.
North America
Premium denim sales are at a crossroad, says Eric Villency, who launched his own premium fashion label in September 2007, given that US sales have been declining, especially in the age group of 18-34.
He suggests that as distressed finishes and pocket embellishment have become more and more common in the premium denim segment, new sophistication — such as formal denim and propriety washes — is needed to attract consumers.
Latin Americas
The denim fabric output in Latin America reached 800 million meters in 2006, and the consumption was 620 millions meter, leading to a 180 million meter over-supply. Rodolfo García Muriel, President of Compania Industrial de Parras S.A. (CIPSA) adds that Asia has an excessive presence in the Latin American markets due to excessive capacity.
The two major markets in Latin Americas were Brazil (40% of total Latin American markets) and Mexico (35%).
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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