Chinese textile exporters need to change strategies for EU

07 Apr '14

3 min read

In view of the increasingly strong economic recovery being witnessed in the European Union, the exporters of textiles and apparel from China to the EU need to revise their strategies to increase their share in the European market, according to experts.

In addition to the revival of the European economy, there are some new trends which can have far reaching impact on EU-China textile trade, and hence, Chinese export enterprises should pay attention to them and change their strategies accordingly, aver experts.

The debt crisis has taught EU consumers some lessons in purchasing. Previously, European buyers paid attention only to the product quality, but now they have also become very sensitive to price, which means European textile and clothing orders can now materialize at reduced prices compared to the previous years.

The years of debt crisis has also led to a gradual rise in online textile and clothing sales. As a result, there is fast-fashion trend and hence, the delivery time for European exports is getting shorter, while orders are also becoming smaller.

According to the data, China’s share in EU-27 textile and apparel imports in 2011 was 41.2 percent, which decreased to 39.9 percent in 2012, and further to 38.5 percent in 2013. This was because some orders got transferred from China to South and Southeast Asian countries, as European buyers searched for reduced costs.

However, China is still the largest textile and apparel supplier to the EU. It is because the EU procurement decision-makers believe that South and Southeast Asian nations do not have the product quality, and horizontal and vertical integration of production capacity like China. Moreover, due to their earlier experience of working with the Chinese companies, the EU buyers have developed a strong dependence, and find the Chinese companies more trustworthy in terms of on-time delivery.

Meanwhile, the EU’s new GSP scheme has taken effect from January 1 this year, which gives textiles and clothing from countries like Bangladesh, Cambodia and Myanmar tariff-free entry to the European market, while all tariff concessions for Chinese exports to the EU stand cancelled since 2006. This brings more unfavourable competitive environment for the Chinese textile and garment enterprises.

Further, the EU has either signed or negotiating a free trade agreement (FTA) with several countries, which makes the external environment even more adverse for the Chinese textile and apparel enterprises.

Under such unfavourable situation, Chinese textile and garment export enterprises need to keep abreast of the status of the European market, and adjust their strategies accordingly. More importantly, exporters would need to get ready for smaller orders to fully benefit from the business opportunities brought by the rebound in the European economies.

Fibre2fashion News Desk - India

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