The increasing pressure on the trade conflict between China and the USA as well as the growing competition in their own country and in other Asian countries such as Vietnam and Bangladesh require new measures for clothing producers: inside of the People’s Republic.
In order to understand how the manufacturers deal with the situation, while increasing costs and consumption restraint shape the global market, we dealt with the China International Fashion Fair (Chic) in Shanghai.
Focus on home market
While China’s head of state Xi Jinping celebrates the 80th anniversary of the end of the Second World War last Wednesday with his high -ranking guests in Beijing, the business is not neglected on the most frequented day of the Shanghaier fashion fair. Nevertheless, the events around the military parade in the capital are also followed on the exhibition center.
The semi -annual fashion fair takes place in March and September. While various brands and designers also present themselves at the spring edition: in the inside with their collections, there is a clear focus on the production in September. The exhibiting factory operators are usually both as an original equipment manufacturer (OEM), in which the design comes from the brands, as well as as an original design manufacturer (ODM), in which the brands are drafted according to their performances Adjust, active.
The majority of the producer: inside focuses on the home market. Only about 20 to 30 percent of the exhibitors export the goods abroad, said Chic President Chen Dapeng at a press conference last Wednesday. This proportion decreased according to the pandemic, while the number of visitors: inside and exhibitors could continue to grow this year compared to previous years.
Textile and clothing exports remain constant
The worldwide market is characterized by challenges, according to Chen, the Chinese clothing association (China National Garment Association). is. This also includes the trade conflict between China and the USA. So far, the effects for Chinese producers have been: but not so strong inside. According to Chen, exports to the United States declined only slightly between January and June. However, deliveries to Europe rose.
In the first six months, China’s cumulative exports of textiles, clothing and accessories were able to grow by 0.8 percent in the previous year comparison, as the general customs administration of China (GAC) announced. The value of the goods during this period was $ 143 billion (122 billion euros). If you look at the individual segments, clothing exports decreased by 0.2 percent to $ 73.5 billion. Meanwhile, textual exports have an increase of 1.8 percent to $ 70.52 billion.
Producer: Interior react to the trade conflict with the USA
The customs dispute between the USA and China is currently on hold until November 10th. The top tax rates announced in April-the import duties of up to 145 percent to Chinese products or 125 percent on US products are also exposed. Nevertheless, with 30 percent of Chinese imports into the United States and 10 percent on US goods in China, there are currently high taxes. In addition, there is the cancellation of the duty-free limit for the import of commercial packages worth less than $ 800 (688 euros), which was previously freed from the taxes by the so-called de-minimis rule. The change has been in effect to all countries since the end of August, but China has been affected since May.
The Shanghai Dragon Corporation reacts to the changes in the US market and converts the range for its underwear brand Threegund. The Chinese textile producer, which belongs to the Shangex Fashion Company, dispenses in her direct sales via the US online giant Amazon in the United States. This should save costs, said Samuel Feng, General Manager at Dragon. Previously, the products had a cotton content of 40 to 50 percent.
Due to the changes in the US market, the group, which generates the majority of its income abroad as a producer for other brands with 90 percent, now hopes to work more with European customers. You currently work with 15 larger and several small partners: inside in Europe. At the fair, talks with customers from Norway were also held. Together they build on long -term cooperation and are already planning the coming year.
In addition to Europe, business in the Middle East and in several African countries would continue to grow. The numbers speak for a successful strategy. According to Feng, the group is said to have achieved an increase of five percent in sales and profit compared to 2023 last year.
The Qingdao Qianfeng Capart International Corporation has raised the prices per product between $ 0.1 to $ 0.2, explains a company spokesman. According to his own statements, the Chinese pantaepide specialist counts large US sports artists such as New Era and Fanatics, but also clothing providers in Europe such as the German menswear brand Lerros and the bestseller branding Jack & Jones.
With up to 80 percent sales share, the US market is still the strongest market for the company. The remaining 20 percent in particular summarize Europe and Southeast Asian countries such as the home market and Korea. However, since the peaked cap’s specialty also has to deal with declining figures overall, you are also looking for new customers: inside in South America.
Last year, production costs rose by five to ten percent for the company from the East Chinese city of Qingdao and the order volume dropped by around ten percent. In addition to Neukund: During this time, the inside is particularly based on long -term cooperation such as with New Era. “The customer: stay inside, only the volume becomes less,” summarizes the speaker.
The close exchange between producer: inside and brands is all the more important in the current time. This is the only way to solve obstacles such as higher import tariffs. The two parties negotiate the additional costs and divide them up, according to Chen Dapeng.
Lower outsourcing and costs
In order to keep up with the increasing competition and reduce the costs, Qingdao Qianfeng Capart has also invested in a production facility in Ghana since the beginning of the year. In the long term, around 30 producers of the products are to be produced there. The focus is on simple models. However, more elaborate models and details such as embroidery are still produced in the domestic work.
The chic boss also observes such a change. Chinese producer: Inside, rely on other countries such as Vietnam, Bangladesh, Myanmar and Egypt to outsource part of their production. But Chen also underlines that they are only products such as simple knitting goods and T-shirt that are manufactured in these countries. For the high-quality production, for which it requires more technical know-how, you stay in China.
In addition, companies that cannot switch to other countries because of their specialization would also fall more and more to new digital solutions. Among other things, the use of artificial intelligence should make production more efficient. This could also better react to the changes in the US market.
Midest wages
Another important role in Chinese producers: Inside and their export business, the region plays in which they are based. Depending on factors such as minimal living costs and economic development in the region, various minimum wage standards that are determined by the local government apply, according to the Chinese provisions on the minimum wage.
According to the current status, Shanghai has the highest monthly minimum wage with 2,740 Renminbi Yuan (around 327 euros). The amount was only increased by 2690 Yuan in early July, as various media such as Bloomberg reported at the time. As a result, brands from the USA in particular tend more to providers: Inside from other provinces, Annora Qin, Marketing Manager at Shanghai Senfang Textile Apparel explains.
The jackets specialist recently came to conversation with a representative of Ralph Lauren’s kidswear line, but was unable to meet because the price was too high. The focus in export is particularly on Europe for the company, where you work with brands such as Helly Hansen, Paul Smith, Pinko and Le Coq Sportif. Japan is also an important export market.
