China Sourcing Report: Children's Wear

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China Sourcing Report: Children's Wear

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Publisher: Global Sources
Published: febrero 2008
Frequency: Irregular
Languages: Ingles
Hardcopy: 113 pages
Dimensions: 21.0 x 29.7 (A4) cm (8.19 x 11.58 inch)
Availability: usually ships within 24 hours
Estimated Shipping Time
Product Type: Estudio del Mercado
Reference No.: 0045-061

Price: ~~$395.00~~ $359.00

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Executive Summary

China's exports of children's wear are expected to remain strong in 2008, despite the challenges besetting the industry domestically and overseas. A key driver of optimistic projections is the lifting of the EU's quota restrictions, which gives suppliers the opportunity to increase shipments to the region. The EU is currently the largest market for all China-made garments, accounting for nearly 25 percent of exports during the 11-month period ending November 2007.

Even as suppliers anticipate growth, however, caution tempers expansion plans for the year. Most makers are wary of increasing their capacity too much, in light of the fact that authorities in China and the EU are still jointly monitoring shipments of categories that were previously restricted. Many are worried that limits may be imposed once again in the event that exports surge.

Reports of an economic slowdown in the US are also keeping capacity increases to a minimum. The country is currently the second-largest market for China-made garments, accounting for about 21 percent of export value.

Price increases implemented in 2007 and adjustments that will be made in coming months are additional factors that suppliers believe may dampen demand. Rising production costs, a lower export tax rebate and the continued appreciation of the yuan have driven most companies to raise quotes by 5 to 10 percent in 2007 and many are projecting similar rates of increase for this year.

The following are some of the other key trends we see in the children's wear industry of China:

- With exporting generally becoming more expensive, more makers are expected to focus on the domestic market.
- Investment in building up capacity will revolve around upgrading existing facilities. Companies are also looking to increase subcontracting if orders in coming months exceed their existing capacity.
- Makers will generally move higher up the value chain to obtain better margins. In line with this, branding will be a key trend, the use of technical fabric will increase and designs will also feature more functional and decorative elements.
- To support the shift toward high-value designs and streamline operations, many companies will invest in management and production systems that are more advanced and cost efficient. Several will also try to gain better control over their cost drivers through vertical integration.

Industry Overview

China continues to be the largest supplier of children's wear in the world. According to the China National Bureau of Statistics, the country shipped more than 2.8 billion pieces in the first 11 months of 2007. These represent about 10 percent of the country's garment exports, which reached a value of US$115 billion, 21 percent more compared with the same period in 2006.

The EU accounts for about 23 percent of export sales, making it the largest overseas market for China made garments, including those for children. Most suppliers expect exports to the region to continue growing in 2008, as quota restrictions on all apparel categories were lifted on January 1. The limits previously covered T-shirts, suits and trousers, girls' blouses, boys' shirts, and pullovers.

Companies with large operations are especially optimistic that they can strengthen their foothold in the EU. A major reason for this is that many of them have established connections with retailers and distributors in the region. Consequently, they are the most likely to be granted licenses to export to member countries under the new conditions that were released in October 2007.

Among the requirements are the following: a registered capital of more than RMB500,000 or about US$70,000, a minimum export of US$10,000 worth to the EU the previous year and two years' experience of shipping to the EU. In addition, suppliers have to be members of the China Chamber of Commerce for Import and Export of Textiles, and should not have violated intellectual property rights and environmental protection rules in the past three years.

Expansion plans for the year, however, remain cautious. Considering that the EU and China authorities have agreed to continue monitoring shipments, many are wary that restrictions may be imposed again in the event that exports surge. Small and midsize companies are being particularly careful, keeping expansions to the minimum, as most of them have to course their orders through trading companies or large makers.

Several children's wear makers, therefore, are looking toward the US for growth. Accounting for 21 percent of total shipment value, the country is currently the second-largest importer of China-made garments. Exports of children's wear, especially in categories where quotas were eliminated in 2005, surged by up to 50 percent in the 11 months ending November 2007 compared with the same period in 2006.

Based on in-factory tours

China continues to be the world's largest supplier of children's wear, with exports still achieving double-digit annual growth. Overseas shipments are expected to remain strong this year, mainly due to the elimination of all garment quotas in the EU, the country's largest market.

Even as suppliers anticipate growth, however, caution tempers expansion plans for the year. Worries over a reported economic slowdown in the US, as well as the possibility that limits may once again be imposed by the EU are keeping capacity upgrades to a minimum.

Other pressing challenges, including rising material and labor costs, lower export tax rebates, and the continued appreciation of the yuan are seen as the catalysts for a 5 to 10 percent increase in export prices this year.

Suppliers are generally moving higher up the value chain to obtain better margins. Companies are focusing largely on branding, and enhancing designs with more functional materials and decorative elements.

With the help of this report, you too can profit from this evolving industry.

This report will answer questions such as:

- What strategies are companies implementing to keep price increases at a minimum?
- Which makers will shift market focus and where?
- How are suppliers meeting international regulations concerning toxic substances?
- What changes have been made to sourcing strategies, manufacturing techniques and QC tests to comply with these new regulations?
- What value-added features will new releases have?
- How do production hubs differ in terms of product offerings and pricing?
- And much more...

With profiles of 56 suppliers, a comprehensive industry overview, and detailed product and pricing information, this report will help you qualify suppliers before your next sourcing trip to China.

What you'll get

- In-depth profiles of 42 major suppliers with a comprehensive look at their product and pricing strategy, manufacturing and export capability, verified contact details, and more - this information is not available anywhere else
- Profile tables of 14 additional suppliers, with key information such as production capacities, export capabilities, primary export markets and main machinery
- 158 full-color images that depict popular children's wear, complete with product descriptions, prices, minimum order requirements and delivery times
- Results of the custom-designed supplier survey, which forecasts industry trends for the next 12 months
- Verified supplier contact details, including names, e-mails, telephone numbers and websites of profiled makers
- This report covers the major types of children's wear produced and exported from China: outerwear, shirts & blouses, pants & shorts, skirts & dresses, and suits & sets

Supplier Profile

A&A Trading Co. Ltd
Capability

Production checklist
Cutting machines 3
R&D/design staff 10
QC
staff 10
Sewing machines 120
Knitting machines 2
Needle detectors 2
In-house fabric printing Yes
In-house embroidery Yes

Exports by product
Outerwear 10%
Shirts 70%

Skirts & dresses -
Pants & shorts 10%
Suits & sets 10%
Exports by market
United States -
Nth America 50%
European Union 20%
Europe (non-EU) 5%
Middle East/Africa 5%
Asia 15%
Other 5%

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