Home / Knowledge / News / Retail/Online Store / China's clothing export growth may falter
China's clothing export growth may falter
07
Jun '14
The competitiveness of the Chinese clothing industry is set to weaken over the next few years as costs rise. As a result, export growth could falter.
 
Rising costs in China are already forcing an increasing number of Western apparel brands and retailers to cut back on their sourcing from China and have their apparel manufactured elsewhere. In response, the Chinese government is pursuing a policy of encouraging growth in the domestic clothing market in order to take up slack in its manufacturing sector caused by this apparent loss in competitiveness.
 
The rise in costs in China stems in part from significant increases in fuel costs and shipping costs. Also, wage rates have risen to the point where they are higher than in many other Asian countries. Moreover, wage costs are set to increase further, given the Chinese government's commitment to raising minimum wage rates by an average of 13% per annum during 2011-15.
 
Early signs of a shift in apparel manufacture have been seen in EU and US clothing import trends. In 2013 China's share of EU clothing imports from all sources in value terms fell from 41.7% to 40.1%, having fallen sharply in the previous year. China's share of US clothing imports from all sources fell from 37.8% to 37.3%.
 
In most cases, the companies which are cutting back on having their apparel produced in China are relocating manufacturing processes to other low cost countries -- mostly in Asia.
 
In fact, the strongest growth in the EU clothing import in 2013 was in imports from Bangladesh, Cambodia and Pakistan, while the strongest growth in the US clothing import market was in imports from Bangladesh, Sri Lanka and Vietnam.
 
The potential for growth in China's domestic market is huge. Consumer expenditure per head on clothing in China is extremely small -- despite significant expansion in recent years. In 2012 it was only US$290 in urban areas and just US$63 in rural areas compared with an average of around US$1,400 in Germany, the UK and the USA.
 
If expenditure per head in China were to climb to US$1,400, then domestic demand for clothing would be US$1,560 bn per annum greater than it is at present.
 
This additional demand would more than compensate for any likely fall in exports, given that it equates to about nine times China's clothing exports to all destinations in 2013.
 
It is no surprise therefore, that a number of Western apparel brands and retailers are expanding their retail operations in China in order to capitalise on an expected upsurge in domestic demand.
 
One of the biggest opportunities in Chinese retailing, however, lies in e-commerce. This is expanding rapidly in the country in the same way that it is expandingin Western markets and Japan. Online stores have already been established in China by Burberry, Cherokee, Coach, Hugo Boss, Kering, Levi's, Neiman Marcus, Uniqlo and Zara, to name only a few.
 

Textiles Intelligence


Interviews View All

Top executives, Textile industry

Top executives
Textile industry

Sri Lanka has a good sustainable track record and strong stories to back it

Anvita Mehra, Confidential Couture

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

Janak Dhamanwala & Sunil Dhamanwala, Jansun

Janak Dhamanwala & Sunil Dhamanwala
Jansun

Moving towards sustainability is also a social change

Ravindra Jain, Ashish Baid,

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Fabio Grandis,

Fabio Grandis

Italian company Grandis SRL has been operating in the textile industry for ...

Nitesh Mittal,

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Michael Jaenecke, Messe Frankfurt

Michael Jaenecke
Messe Frankfurt

From May 14 to 17, international exhibitors will present the entire...

Kai Poehler, Voith Paper GmbH & Co. KG

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Luis Quijano, Liberty University

Luis Quijano
Liberty University

Focusing on bold patterns and colour palettes, Luis Quijano, a student at...

Rajesh Pratap Singh, Rajesh Pratap Singh

Rajesh Pratap Singh
Rajesh Pratap Singh

<div>Ace fashion designer <b>Rajesh Pratap Singh</b> has used Tencel to...

Joe Ikareth, Joe Ikareth

Joe Ikareth
Joe Ikareth

<b>Joe Ikareth</b> has a rock-solid fashion and textiles background, which ...

Jay Ramrakhiani, Occasions Elegance Wear

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


October 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search