Underwear & Swimwear. Essential sourcing intelligence for buyers

Transcription

1 Essential sourcing intelligence for buyers China manufacturer profiles Detailed profiles of 25 suppliers with verified manufacturing and export credentials October 2009 US$395 Zhejiang Fujian Guangdong Underwear & swimwear supply centers Product & price trends Prices and specifications of 114 top-selling export products Supply centers & market trends Coverage of leading and emerging supply centers, plus insight into capacity, output and R&D wwwchinasourcingreportscom

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3 EXECUTIVE SUMMARY UNDERWEAR & SWIMWEAR Supplier capability in China EXECUTIVE SUMMARY China s underwear and swimwear industry is banking on an upmarket shift to revive lackluster sales This is also a long-term strategy for boosting competitiveness and ensuring sustained growth amid economic challenges The global financial crisis hit the industry severely, pulling both the volume and value of exports down 25 percent to 37 billion pieces worth $38 billion in the first six months of 2009 Despite dwindling sales, many suppliers are positive the increased emphasis on midrange and high-end designs will facilitate recovery through 2010 Many are even projecting export revenue to grow between 10 and 20 percent in the next 12 months Moreover, several businesses believe that economic indicators are pointing to steady recovery in markets worldwide In addition, measures implemented during the past year to stave off further contraction have been helping companies weather challenges Although forecasts are optimistic, most makers continue to enforce cost-cutting steps that will help them remain financially viable in case costs escalate The following are some of the key developments we see in China s underwear and swimwear industry: More suppliers will be focusing R&D on environment-friendly fabrics in the months ahead Despite difficulties in material sourcing and higher costs, companies believe heightened consumer awareness of green fibers can stimulate enough demand to warrant the production of eco-friendly intimate apparel on a larger scale Consequently, this can help them procure textiles in bulk and lower expenses Apart from ecologically safe fabrics, makers will continue to use premium fibers such as silk in upscale releases, particularly for nighties and lingerie sets Although many businesses have increased emphasis on emerging markets such as South Africa, the EU and the US will remain the primary export destinations in the year ahead China suppliers produce underwear, sleepwear and swimwear for men and women These are also the scope of this report Each product category has its own section with details on the features and prices of low-end, midrange and high-end models The manufacturing and QC processes are discussed as well Further, the section elaborates on the industry composition, highlighting key characteristics of the different types of companies The Industry Overview illustrates the steps suppliers have taken to move upmarket, including different ways of highlighting environmental friendliness in releases Moreover, it discusses how the global economic downturn has affected business and the measures taken to weather such challenges Roughly 80 percent of the underwear and swimwear export manufacturing industry in China is comprised of small and midsize companies Approximately 80 percent of all suppliers are private locally owned companies, and the rest have foreign participation or are stateowned OEM orders constitute nearly twothirds of overseas sales The provinces of Guangdong, Fujian and Zhejiang are the main production centers Together, these hubs contribute more than half of national exports in the line Reflecting this structure, twothirds of suppliers profiled in this report are private local businesses Twenty percent has participation from Hong Kong companies and the rest is foreign-invested More than 40 percent of featured companies come from Fujian, 20 percent from Guangdong and 12 percent are from Zhejiang In this report 25 in-depth company profiles 114 top-selling export products Supplier demographics Supplier survey Industry statistics & charts METHODOLOGY To produce this report, Global Sources surveyed a wide range of suppliers Rather than focus simply on high-profile makers, we compiled a representative sample of large, midsize and emerging manufacturers All profiled companies are export-oriented professional suppliers that may or may not be clients of Global Sources The selection of suppliers is designed to reflect the composition of the industry in China in terms of geographic spread, business type and company ownership For in-depth company profiles, our research teams interviewed senior executives and export managers who discussed their recent performance and provided price, R&D, production and export forecasts for the next 12 months The interviews were done in person, by phone or In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including their production and export statistics, and a breakdown of exports by product type and market Our production checklist details the product-specific manufacturing capability of each supplier All profiled companies participated in a survey designed to provide insight into product and price trends, and challenges facing the industry All survey questions are single choice Results were calculated based on the actual number of valid responses to each question 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4 CONTENTS CONTENTS INDUSTRY OVERVIEW 7 Supplier summary Export statistics Main production centers Supplier demographics Sleepwear 10 Swimwear 15 Underwear 19 Supplier survey 25 Export prices, export sales, target markets, capital expenditure, challenges, capability, R&D focus SUPPLIER PROFILES 29 Supplier locations Industry composition Exporter ranking Supplier matrix Production checklist Supplier profiles PRODUCT GALLERY 89 Top-selling export products Copyright 2009 Trade Media Limited All rights reserved Reproduction in whole or in part in any form or medium without express written permission of Trade Media Holdings Limited and Trade Media Limited is prohibited Published by Publishers Representatives Limited (on behalf of Trade Media Limited) 4th Floor, Century Yard, Cricket Square, Elgin Avenue, PO Box SMB, George Town, Grand Cayman, Cayman Islands c/o 22/F Vita Tower, 29 Wong Chuk Hang Road, Aberdeen, Hong Kong ISBN Disclaimer: Any recommendation contained in this report may not be suitable for all investors or businesses Moreover, although the information contained in this report is obtained from sources believed to be reasonably reliable, the accuracy or completeness of such information cannot be guaranteed The author and the publisher of this report (and the publisher s affiliates, agents, sales representatives and service contractors) do not make any representation or warranty whatsoever (whether express or implied) in relation to any of the contents of this report (including any information, opinion, recommendation or conclusion contained in this report) (collectively, Contents ), whether as to the accuracy, completeness, quality, fitness, suitability or reliability of such Contents (or any portion thereof ) or otherwise, and shall not be liable under any circumstances whatsoever for any error, omission, defect or deficiency in, or for any use of or reliance on, such Contents (or any portion thereof) All product images are provided by the companies interviewed and are for reference purposes only Those product images featuring products with trademarks, brand names or logos are not intended for sale Products that are not the specific topics of editorial articles are shown for illustrative and/or demonstrative purposes only We, our affiliates, and our affiliates respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party 4 China Sourcing Reports

5 INDUSTRY OVERVIEW INDUSTRY OVERVIEW Suppliers of underwear, swimwear and sleepwear in China are continuing their upmarket move as a long-term strategy for beating recent financial difficulties that have affected each product category in varying degrees Although the shift to value-added models has been in progress for a couple of years, weak overseas demand distracted companies from this endeavor temporarily The combined export sales of undergarments, swimsuits and nightclothes for men and women amounted to 107 billion pieces worth $12 billion in 2008 After increasing 22 and 21 percent YoY in terms of volume and value in 2007, last year s figures show a 5 percent decrease in quantity and a 16 percent growth in revenue In the first half of 2009, the country sold 37 billion pieces at $38 billion This reflects a decline of 25 percent on both parameters from the same span in the previous year Data for the different types of garments, however, demonstrate diverse reactions to the economic crisis For example, shipments of bras, panties, and men s briefs, boxers and pajamas continued to grow throughout last year but dropped beginning January 2009 The delayed manifestation of the economic crisis could be attributed to the six-month average lead time from design development to delivery In some cases, the impact that followed seemed more drastic due to the very high basis for comparison Bra sales during the first half of 2009, for instance, fell 32 percent YoY to $8426 million for 637 pairs This comes after its phenomenal expansion of 84 and 32 percent by value and volume in 2008 Current figures, however, are even lower than 2007 revenue and quantity by 1 and 18 percent, correspondingly Meanwhile, exports of other product groups began to weaken in the second quarter of last year To illustrate, men s swimwear sales started their downward trajectory in April 2008 and have dwindled every month since then Women s bathing suits have taken a similar path, with shipments continually descending since May of the previous year The only exception in both categories is March 2009, when clients may have needed to restock Apart from the possibility that buyers of these items experienced financial challenges earlier, the seasonal nature of swimsuits may be a factor With large orders being delivered within 1Q08, buyers were able to adjust subsequent purchases based on consumer spending Suppliers reacted to the drop in orders by implementing cost-cutting and efficiency measures to help maximize cash flow These were the priority in the past 12 months as factories struggled to stay afloat To reduce labor expenses, many enterprises let go of unskilled workers and decreased managers salaries by 10 to 20 percent They also took steps to lower defect rates and material wastage Workers in the cutting room were trained to determine the appropriate number of fabric layers for the size of their scissors Close coordination between designers and pattern makers was also emphasized for economical textile utilization Some manufacturers with a good credit standing obtained government grants or loans from financial institutions to upgrade their facilities New equipment has helped not only in improving output quality and minimizing material outlay, but also in slashing employment costs Despite such measures, about 5 percent of the supplier base was forced out of the line last year Most were small operations Those that survived launched aggressive marketing efforts The cultivation of nontraditional overseas destinations, including Southeast Asia, the Middle East and Africa, is one of the strategies Supplier summary Suppliers surveyed 25 Export sales $1588mn Export ratio 75% OEM business 73% Capacity utilized 70% Annual R&D spending $44mn Full-time employees 15,578 Data: All surveyed suppliers Several companies also reallocated idle assembly lines for catering to domestic demand Since setting up retail shops is a costly venture, the majority sells products on a wholesale basis Foreign transactions, however, still take precedence because of quicker returns Moreover, many businesses have started to accept smaller orders From 3,000 pieces, the MOQ is currently down to 1,000 On top of this, suppliers are complying with requests for shorter delivery and sampling time Lower prices have also played an important part in keeping buyers interested Discounts have been possible partly because of higher export tax rebates National authorities raised the refund for garments several times since August 2008 It is now up by 5 percentage points to 16 percent According to makers, customers commonly cite the policy change during negotiation While greater reimbursements have not yielded a rise in profits, some enterprises still think that the additional bargaining leeway helps create opportunities for order confirmation As a result, the average unit price in the line from January to June 2009 was $103, a decrease of 15 percent from $121 in the preceding six months and higher by only 1 percent compared with $102 in the same span last year Elevated prices in the latter part of 2008 can be interpreted as a backlash of surging material costs in the earlier months, during which companies withstood the pressure to keep quotes down The need to recoup losses wwwchinasourcingreportscom 7

6 SUPPLIER PROFILES Baichuan Dress & Weaving Co Ltd Baichuan is a Hong Kong-invested manufacturer of men s and women s sleepwear and underwear, which together account for 48 percent of total sales Revenue from the line reached $48 million last year This came as prices were reduced between 5 and 10 percent during the past three months Export sales, however, are expected to decrease in the next 12 months All output is shipped to North, Central and South America, Europe, Africa, and the Asia-Pacific region Of these, OEM orders constitute 90 percent, while ODM transactions account for the rest Production is carried out in one factory with an area of 17,000sqm The plant houses 20 cutting, and 200 computerized and 300 mechanical sewing machines Operations are ISO 9001:2000 certified Oeko-Tex Standard 100-compliant fabrics are produced in-house as well The company spends $250,000 on its 10-member R&D team annually In addition, the manufacturer has 20 inspectors that use needle detectors and fabric-testing machines during QC Profile Production pieces/mth Capacity Output Exports 600, , ,000 Company facts Year established 2002 Business type Manufacturer Company ownership Hong Kong-invested Head office location Quanzhou (Fujian) Number of factories 1 Factory location(s) Quanzhou (Fujian) Total factory area 17,000sqm No of full-time employees 350 No of R&D/design staff 10 No of QC staff 20 Annual sales (all products) $100mn Annual R&D spending $250,000 ISO certification Yes Sales $mn/yr Total sales Sales (Underwear & swimwear) Exports (Underwear & swimwear) Sales & output: Underwear & swimwear Annual sales $48mn Share of total sales 48% Annual export sales $48mn Total monthly capacity 600,000 pieces Average monthly output 550,000 pieces Capacity utilized 92% Average monthly exports 550,000 pieces Export ratio 100% OEM % of exports 90% ODM % of exports 10% OBM % of exports Major customers Auchan (France), Aldi (Germany) Other products made Children s suits and underwear, men s and women s shirts Contact details Business contact CHEN Paul Phone (86-595) Fax (86-595) paul@baichuancomcn URL wwwbaichuancomcn wwwglobalsourcescom/baichuanco Address Xianjing Industrial Area, Fuqiao, Licheng, Quanzhou, Fujian, China 36 China Sourcing Reports

7 SUPPLIER PROFILES Capability Production checklist Bra cup molding machines Computerized sewing machines 200 Cutting machines 20 In-house embroidery No In-house fabric production Yes In-house fabric testing Yes Mechanical sewing machines 300 Needle detectors 2 Oeko-Tex Standard 100 certification Yes Popular export models Baichuan_BDW3_ 1 Underwear set Model BDW3 MOQ 3,000 sets Packaging Polybag Delivery 30 days Price $065 Exports by product Men s sleepwear 20% Women s sleepwear 20% Men s swimwear Women s swimwear Men s underwear 30% Women s underwear 30% Exports by market North America 20% European Union 50% Europe (non-eu) 10% Asia-Pacific 10% Middle East Central/South America, Africa 10% Survey Export prices Decreased Export price decrease 5-10% Export sales Decrease Target market European Union Capital expenditure No increase Major challenge Price competition Export capability Decrease product defects R&D focus Eco-friendly fabrics Description: Camisole and panty; 100% cotton; offset-printed with floral patterns; sizes S to XL; in various colors Baichuan_BDW2_1 Nightdress Model BDW2 MOQ 3,000 pieces Packaging Polybag Delivery 30 days Price $350 Description: 95% cotton, 5% spandex, 160gsm; sizes S to XL; allover offset-printed pattern; in various colors Baichuan_BDW1_1 Women s brief Model BDW1 MOQ 3,000 pairs Packaging Polybag Delivery 30 days Price $065 Description: 100% cotton, 160gsm; sizes S to XL; in various colors wwwchinasourcingreportscom 37

8 PRODUCT GALLERY PRODUCT GALLERY Underwear 1 Baichuan_BDW3_ 1 2 Baichuan_BDW1_1 3 Cynthia Garments_AK801_1 Baichuan (profile page 36) Model: BDW3 MOQ: 3,000 sets Delivery: 30 days Price: $065 Description: Underwear set; camisole and panty; 100% cotton; offset-printed with floral patterns; sizes S to XL; in various colors Baichuan (profile page 36) Model: BDW1 MOQ: 3,000 pairs Delivery: 30 days Price: $065 Description: Women s brief; 100% cotton, 160gsm; sizes S to XL; in various colors Cynthia (profile page 42) Model: AK801 MOQ: 5,000 pairs per color Packaging: PP bag Delivery: 90 days Price: $720 Description: Bra; 100% polyester; 647% polyester, 353% cotton cups; embroidered lace trimming; custom sizes and colors 4 Dongyang Zhuolin_ GW027_1 5 Dongyang Zhuolin_GW008-1_1 6 Dongyang Zhuolin_ GW001-1_1 Dongyang Zhuolin Fushi (profile page 44) Model: GW027 MOQ: 2,000 pairs Delivery: 35 days Price: $171 Description: Bra; 92% cotton, 8% spandex; offset-printed butterfly on left cup; custom sizes and colors Dongyang Zhuolin Fushi (profile page 44) Model: GW008-1 MOQ: 2,000 sets Delivery: 35 days Price: $344 Description: Lingerie set; bra, brief and thong; 92% cotton, 8% spandex; custom sizes and colors Dongyang Zhuolin Fushi (profile page 44) Model: GW001-1 MOQ: 2,000 sets Delivery: 35 days Price: $257 Description: Lingerie set; bra and panty; 92% cotton, 8% spandex; custom sizes and colors wwwchinasourcingreportscom 89

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