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| Issue date:01/02/2010 |
| ATA Journal for Asia on Textile & Apparel - Feb 2010 Issue |
| Source:Journal for Asia on Textile & Apparel |
| by Amy Xiao |
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| Despite declines in exports, textile enterprises in China maintained growth due to increases in domestic sales of textile and apparel goods |
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| Yiner is projecting an elegant image to attract Chinese modern women |
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World exports of apparel declined last year, and it was no exception to China. According to the Chinese customs data, China's total textile and apparel exports was about US$150 billion during the period from January to November 2009, down 11.15% compared with the corresponding period in the previous year.
The total textile exports valued at US$53.76 billion while exports of apparel stood at US$96.486 billion during these 11 months of 2009, down 11.2% and 11.6% respectively from the same period in 2008.
Despite declines in exports, textile enterprises in China maintained growth due to increases in domestic sales of textile and apparel goods, according to Du Yuzhou, President of the China National Textile & Apparel Council (CNTAC).
China's sizable textile enterprises (with an annual operating revenue of at least RMB5 million) witnessed an 11.67% growth in domestic sales in the first eight months of 2009, while majority of the textile and apparel production in the country was consumed domestically, the data of the CNTAC indicated.
At a recent industry meeting organized by the CNTAC in mid-January, the China Textile Economic Information Center under the CNTAC reviewed the industry's development in 2009 and forecast its outlook this year.
China's domestic sales of textile and apparel improving
With the Chinese government's supportive policies, the textile and apparel industry remained stable in the first 11 months of 2009 and started growing in the later months of the year — production value and volume, as well as domestic sales, appeared to rebound; investment returned and profits increased. Exports to the developed economies like the US and Europe appeared to improve, but those to the developing economies remained weak.
"The outlook of 2010 is relatively complicated," said a senior official at the CNTAC at the meeting, Sun Huai-bin. He explained that the international economic environment would turn better this year, but the adverse impact of the global economic crisis had not vanished. Unemployment in major developed countries remains high, and consumer markets have yet to fully recover. Uncertainties may arise in the international trade. New economic trends like development in low-carbon emissions (More information on the carbon issue can be found in ATA Journal Dec 2009/Jan 2010 issue, page 17) and balanced growths have important impact on the Chinese textile and apparel industry.
Macro-economic climate in China is improving as the country continues its proactive and robust fiscal policy and moderately loose monetary measures, Mr Sun continued, the textile and apparel industry is on the track of further structural adjustment. In addition, domestic consumer demand is expected to improve in 2010. All these are positive factors for the industry while inflation is a possible downside factor, he concluded.
Characteristics of China's garment market
Rural consumption on the rise
Some apparel sellers have placed their hopes on the vast rural population in China.
Per capita spending on apparel in China was RMB212 for rural residents and RMB 1,166 for urban dwellers in 2008. As more rural areas are being urbanized in China, industry observers believe that apparel consumption within the country will grow further.
Increasing number of international brands
Both local and overseas apparel brands are optimistic with China's garment market. Zara of Inditex Group from Spain and Hennes & Mauritz (H&M) from Sweden have been opening new stores in China at a faster pace. Their stores can be found in first- and second-tier cities of China, such as Beijing, Tianjin, Zhengzhou, Wuxi and Qingdao.
H&M opened its first store in Beijing in spring 2009. Later in the year, the retailer opened another three stores in the Chinese capital. Three franchised stores of H&M were subsequently opened in Zhejiang in November 2009. It currently has over 20 stores across the country, including Shanghai, Hong Kong, Beijing, Shenzhen, Jiangsu province and Zhejiang province. On the other hand, Zara expected that half of its new stores in future will be opened in Asia to diversify its markets.
Retailers already present in China are seeking to intensify their market penetration. For instance, in early January, Reebok, a member of Adidas, has joined forces with Pou Sheng International, a sportswear distributor in China. Starting from April 1 this year, Pou Sheng will have a professional team to participate in the design, production and marketing of Reebok products in China. This is part of the China-oriented strategy of Reebok for localized designs and production to reduce the delivery cycle and speed up the launch of new products to market.
Chinese apparel brands entering overseas markets
As international exports were weak in the past year, more Chinese apparel manufacturers have started to build up their own brands and turn towards retailing to improve profitability.
Among the Chinese apparel retailers, Li-Ning company, one of the most famous local sportswear brands, has initiated its overseas expansion plan. Early this January, the company officially opened a franchised store in Portland, marking the company's debut presence in the United States. As the US is the largest apparel buyer in the world, entering into this market is significant to Li-Ning company. New products under the theme of Chinese Kungfu in the new US store are even not yet available in the home market of China.
Additionally, Li-Ning company opened its first flagship store in Singapore in July 2009 to expand into the badminton market in Southeast Asia.
Another forerunner in overseas expansion is Bosideng (波司登), which has opened franchised stores of menswear in England.
Online purchase becomes way of life
China is one of the largest populations on Earth as well as in the cyberspace, and this is translating into business opportunity. For example, one of the best known online marketplace, Taobao, claimed to have almost 100 million registered users by the end of 2008.
Online buying is getting more and more popular among the younger generation of China. These young people are familiar with the use of the internet and are fashion-conscious. They are more willing to pay branded apparel goods than their parents. Some of them, such as those born in the 1980s and 1990s, prefer to buy online at a discount rate than from a brick and mortar.
The number of online buyers reached 87.88 million in China by June 2009, according to the report of the China Internet Network Information Center released in December 2009. The number increased 38.9% in an annualized growth. Consumption done through the internet valued at RMB 119.52 billion in the first half of 2009, the report says. The figure for the full year was estimated at RMB 250 billion. Among all the products, apparel topped the list with the largest number of online buyers and highest sales value.
Clothes that sell
Children's wear
Children's wear enterprises in China mainly make clothes for children under 10. There are relatively few products developed for those between 10 and 18.
Children in China are generally well-provided for as a result of the rising disposable income and the one-child policy, which has been implemented since 1979. Disney and Adidas announced to join efforts in late 2009 to introduce apparel for infants and children. More international sports brands, including Adidas, Nike and some Japanese labels, have paid more attention to the lucrative children's wear market of China.
Womenswear
Shenzhen city in South China is known for the manufacturing of womenswear. The Shenzhen Apparel Industry Association (SGIA) anticipated further development in this segment in the next decade. Multi-brand strategy covering a wider spectrum of the segment from medium- to high-priced has been adopted by manufacturers, according to the association.
One of the successful examples of applying such multi-brand strategy is Yiner Fashion Group. Positioned as an elegant fashion brand for Chinese metropolitan women, Yiner has built up three womenswear brands namely Yiner, a younger and elite line called Insun, and newly-launched Psalter. The company currently operates nearly 1,000 stores across China.
Intimate wear
Modern women in China are willing and able to buy quality intimate wear. Large-scale intimate wear enterprises are looking to expand their product offerings, e.g. evening gowns and beach wear in 2010 to attract the attention of consumers.
Warp-knitted fabric is increasingly used in women's shaping underwear, according to Wu Honglie, chief engineer of Jiangsu AB Group. Added value (e.g. healthcare and anti-bacterial properties) is progressively welcomed by consumers as well.
Embry Form, an established intimate wear producer from Hong Kong, announced its investment of RMB10 million in an advanced research and development center last December. The center will further innovate for new design and technological advancement.
More Chinese apparel brands have employed well-known celebrities as their image ambassadors |
Menswear
Variety in brands with different designs and styles are flourishing in the segment of menswear as apparel enterprises seek to increase market share. The aforesaid multi-brand strategy is being applied in this segment.
Fujian Septwolves specializing in menswear has established four brands, with different positioning. Formal business wear of the "Red Wolves" brand and comfortable smart casual wear of the "Green Wolves" brand are the company's two major product lines targeting men aged 25-55. Another brand, Blue Wolves, was launched in late 2008 for young Chinese men who prefer fashionable casual wear. The company also invited a French designer to jointly roll out a premium brand in 2008 for male elites of the society. This line of premium menswear is available at selective department stores and Fujian Septwolves' premium retail stores.
Fujian Septwolves currently has 2,957 points of sale in China including 282 self-owned stores and 28 premium retail stores. The company registered an operating revenue of RMB879.7 million for the first half of 2009, representing a 4.14% increase from the same period of 2008. The gross profit margin was 37.44%, with reference to its interim report.
The company attributed the growths to the stimulus package introduced by the Chinese government resulting in improved national economic performance and relatively upbeat consumer sentiment. It also reported fast growths in the northeastern and southwestern parts of China.
Functional garment
Functional garment is also getting popular.
Since the beginning of the global financial crisis, the sportswear market has experienced a sharp downturn. However, functional apparel has a great potential for enterprises strong in product development, said Yang Jianguo, General Manager of Shanghai Jiale. The company is a supplier of Reebok, Quiksilver and Decathlon. "We have launched engineered double-face fabrics that keep wearers warm, and fabrics delivering moisture absorbency, for instance," he said.
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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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| 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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