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, 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 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

• 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

http://www.men-clothing.net/china.html

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 mills that had an annual production capacity of
500,000 spindles 80 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 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.

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."

http://en.ce.cn/Insight/200607/24/t20060724_7855509.shtml

CHINA, TEXTILE AND GARMENT INDUSTRY

Order #: T1283_2007TX; US$ 550.00

Published by Research in China, August 2007; 36 Pages; 31 Exhibits
Available in Pdf or hard-copy format

In 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%.

http://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
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

http://www.pr-inside.com/china-textile-garment-industry-report-r789841.htm

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…

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%.

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% 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.
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