'Develop clothing brands to sustain business' - Experts

06 Jul '09

2 min read

In terms of garment production and exports, China is the biggest exporter in the world, but in terms of textile and apparel brands, China is no where in the global markets. There is a good example; a piece of high-end shirt of global brand Hugo Boss is sold at US $120 per at 54th Street in the United States.

An analysis of the price structure reveals that more than 60 percent of the profits of the pricing of a garment go to the sales channels, 30 percent of the profits go to brands and only 10 percent of the profits go to manufacturers in China who consume a lot of resources work hard in producing the shirt.

In the highly competitive OEM market, under pressure from the global retailers, domestic clothing manufacturers are even offering discounts by reducing their pricing, in order to keep their machines running and in the process, lowering their profit margins to the advantage of these apparel brands.

Experts from the sector are pointing out a major perception that western countries carry about Chinese goods. The experts say that Chinese products have an image of low prices at the cost of quality, which is detrimental to the future prospects of the industry at large and due to which these products are not able to command a good pricing.

Another example delved by experts is of a Chinese made hat, is delivered to an American retailer at US $1, who in turn retails it at $25 and the manufacturing price of a sweater was quoted at $0.8 in the Autumn Canton Fair this year, but it is sold at over $1OO by the apparel brand in the markets of the US.

Of the total clothing exports, only 10 percent of exports are China's own brands with most of them being Chinese style clothing. Some industrial experts say that Chinese enterprises should strive to develop brands, which will ultimately help them improve their profit margins in the long term.

Fibre2fashion News Desk - China

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