Garment
Industry Report

1. Garment Industry Overview & Key Statistics

a. Textile and apparel industry description

China is the largest producer and exporter of textiles and apparel in the world. In 2016, the country exported US$106 billion of textiles and US$161 billion of apparel. Its closest rival, the European Union economic bloc, exports only 75% of that, with regional competitors exporting far less. In this way, China remains unrivaled as a producer and exporter in the industry.

b. Global garment production: China vs. other regions of the world

Top Ten Garment Exporting Countries in 2016

Top export countries in the garment industry (Source: World Trade Organization)

While textile and apparel exports have decreased since 2014 due to rising labor costs and increasing competition from other developing economies in the region, China still has a considerable amount of expertise in the industry, along with decades of experience, modern infrastructure, efficient supply chain management, and high productivity. China still produces more than 40 percent of global textile and apparel exports, is already shifting to more value-added products and will continue to improve upon its existing experience and expertise.

China will remain the leading textile and apparel sourcing country for the foreseeable future.

 

c. What textiles are commonly produced in China
  • T-shirts
  • Jackets and coats
  • Sportswear
  • Jeans
  • Kids’ wear
  • Infant and Toddlers’ clothing
d. Year-on-Year apparel industry growth

Although exports of garments from China have decreased in recent years, much of this can be explained by the country’s general transition from investment-based growth to consumption-based—with more production dedicated to meeting domestic demand—and manufacturers themselves shifting to more advanced garments—such as sportswear—requiring retooling and investment in higher-skilled labor in methods. In the years to come, export values will likely increase as overall production increases and domestic manufacturers continue to move up the value chain.

Textile and Apparel Export Value of China in billion USD

China apparel and textile export value of the garment industry(Source: China Chamber of Commerce for Import and Export of Textile and Apparel)

 

2. Why China is the Right Choice for Garments Production

a. Garment production capacity

China’s production capacity is unmatched in the world. Textile fiber production in 2014 in China was over 50 million tons, accounting for 54.36 percent of the total world share. Furthermore, the country’s production of apparel reached 29.9 billion units, a 10.4 percent increase over the previous year. Essentially, China boasts clusters of efficient suppliers that other countries will struggle to replicate, and its firms are adopting automated production methods; it’s one of the leading importers of robots used for such automation. This will continue to raise productivity and offset higher labor costs.

Number of Firms for Apparel Production in China in 2013 and 2014

number of firms in garment industry China- intrepid sourcing(Source: China Textile Industry Development Report (2014/2015; 2013/2014)

b. Textile worker skill level

Compared to other low-cost countries, China has the advantage of having a large, skilled labor force. Although garment manufacturing typically involves low-skilled work, having skilled professional managers increases the efficiency and productivity of a factory. This has the benefit of shortening lead times.

c. Technological advantages in the apparel industry

With skilled labor and improved technology, China is moving up the value chain, with many manufacturers capable of producing lower volumes of higher quality and more technical garments, such as sportswear. These items are constructed using special fabrics and advanced techniques that allow for breathability, movement, water-resistance, and comfort.

d. Well-developed supply chain and transportation system

China’s well-developed supply chain, high investment in port, road, and rail infrastructure provides a strong base for manufacturers. As of 2016, China outranks other countries in the region in terms of efficiency of the customs clearance process, quality of trade and transport related infrastructure, ease of arranging competitively priced international shipments, competence and quality of logistics services, and timeliness of shipments in reaching destination within the scheduled time.

Supply Chain Performance of Asian Countries in the Garment Industryperformance index world bank china garment industry- intrepid sourcing(The score indicates the country’s performance on sub-sectors of trade logistics, ranging from 1 to 5, from low performance to high performance. Source: The World Bank, 2016)

Additionally, most of China’s manufacturing areas have widespread high-speed rail networks, bus routes, and subway systems. This allows for timely inspection of factories and completion of due diligence and quality control.

e. Challenges in China’s garment industry

The key challenge in China’s garment industry is the rising labor costs. Compared to the previous generation of cheap, unskilled labor, the younger generation of Chinese workers is better-educated and more highly skilled, thus demand better pay. This is compounded by the country’s shrinking labor pool as the generation responsible for China’s decades of breakneck growth retire. Wage increases in China’s garment industry have caused some buyers to switch production for simple garment products to neighboring countries where local wages are low. The average Chinese factory worker earns US$27.5 per day, compared with US$8.6 in Indonesia andUS$6.7 in Vietnam, according to the Economist.

In order to overcome this challenge, many manufacturers in China are gradually moving from the more developed east coast to the lower-cost interior, a move incentivized by the Chinese government, which is offering tax benefits and subsidies. The western and central parts of the country accounted for 16.8 percent of China’s textiles and apparel production back in 2010. That share had increased to 22.5 percent by 2014 and is expected to reach 28 percent by 2020.

However, these reductions in labor costs come with trade-offs. Typically, wages are low because skills and experience are as well. Additionally, these countries frequently lack efficient and modern infrastructure, pushing up transportation costs and increasing lead times. Finally, such sourcing destinations can produce inconsistent quality, with many retaining a narrow focus on simple, low value, low-quality items.

For this reason, although labor costs are increasing in China, it retains many advantages—such as modern infrastructure, more highly skilled labor, and more efficient manufacturing processes.

 

3. Potential Problems for China’s Garment Industry

a. Time problems in the garment industry

One problem companies sourcing from or manufacturing in China encounter is insufficient lead time assessment. Finding the right materials requires sufficient time and attention and human errors may cause delays. Clients often do not have local presence in the region, so it can be difficult to retain the level of control and awareness necessary to avoid these problems and the delays they cause. Additionally, if a supplier fails to perform any of the contract’s terms, clients will be unable to enforce penalties provided for in such contracts.

Although it’s easy to adapt and set up production lines for garments, it can take a long time to get from design files, to sample production, and then mass production because of inexperience and decentralized planning and coordination.

Moreover, it is costly and time-consuming to establish efficient supply chain logistics in the region and coordinate all the delivery, storage, and other activities within the supply chain, risking unwanted—and often avoidable—delays.

b. Quality problems in the garment industry

Ensuring high quality can be tricky. Many factors can negatively affect product quality: insufficient supplier assessment, poor quality assurance at the start of production, lack of quality control following production, and no consideration for the quality or suitability of inputs.

A single sample often does not tell the full story about the quality of a product and the reliability of a manufacturer’s quality control mechanisms. Many suppliers in China, Bangladesh, and other major garment producing countries in Asia either don’t follow production standards closely or have bad production standards.

c. Cost problems in the garment industry

Many people don’t conduct a feasibility study before they start production. This often leads to underestimated price and overestimated production speed, resulting in unpleasant surprises, higher costs, and slower final delivery.

Another potential problem is that clients often do not know where inputs are coming from, making it difficult to assess quality, suitability, and cost-effectiveness. Not knowing components’ respective cost, may be paying far more than the fair market value of inputs, increasing costs and lowering profitability.

Garment production often is done in many different countries in Asia. However, for different products or materials, every region has its own advantage–some offer better prices or produce better-quality products than others. Clients often do not know how much things cost locally, so they cannot assess if the price is fair by local standards.

d. Planning problems in the garment industry

Common problems for planning include long lead times and high costs for designing and producing prototypes. Insufficient implementation of a new production line often results in delays and poor product quality, and inadequate product cost assessment increases unnecessary costs.

This risk is higher for companies with orders below a certain size, as a supplier or manufacturer is likelier to give less attention and care to such clients. This is compounded by the difficulty of working with manufacturers directly.

e. Risk problems in the garment industry

For clients having no personal presence in the region, it can be challenging to negotiate contracts, assess suppliers, and carry out necessary due diligence. As since garment production often takes place in multiple countries, it is very difficult to have the legal expertise to negotiate and enforce contracts.

 

Garments Production 6 - Intrepid SourcingIt is crucial to coordinate efficiently to get the exact garment designs you want.

 

4. Our Recommendations for Textile and Apparel Production 

a. For reducing time required in the garment industry

Intrepid Sourcing has the experience and expertise necessary to smoothly coordinate and manage the process. Our professional tech packs include the design, colors, and materials of the requested item and can be provided quickly. We can also provide fast and flexible customization.

With a local presence in the region, we are able to easily work with manufacturers closely adhere to production schedules. Additionally, our team can efficiently manage the supply chain.

b. For ensuring quality in the garment industry

We work with pre-vetted suppliers and carry out full quality control inspections prior to shipment. For suppliers who have not already been vetted by us previously, we know exactly what to look for in a production line, what high-quality textiles look like, and signs of good and bad quality control measures so that we can ensure product quality.

c. For reducing cost in the garment industry

We maintain and operate a database of where to source for each type of product and material. With knowledge of the detailed cost of materials and labor input, we can assess if the price is good, and source materials separately to reduce costs.

d. For planning in the garment industry

With years of experience working with manufacturers, we have full understanding of the production process and how manufacturers operate. Therefore, we can carry out efficient planning to deliver high-quality services and ensure better outcomes.

e. For minimizing risk in the garment industry

We have a local presence and experience in all relevant Asian countries, enabling us to effectively negotiate contracts, carry out due diligence, and safeguard all transactions.

 

We are using cookies to give you the best experience. You can find out more about which cookies we are using or switch them off in privacy settings.
AcceptPrivacy Settings

GDPR

  • We use cookies

We use cookies

What Are Cookies

As is common practice with almost all professional websites this site uses cookies, which are tiny files that are downloaded to your computer, to improve your experience. This page describes what information they gather, how we use it and why we sometimes need to store these cookies. We will also share how you can prevent these cookies from being stored however this may downgrade or ‘break’ certain elements of the sites functionality.

For more general information on cookies see the Wikipedia article on HTTP Cookies.

How We Use Cookies

We use cookies for a variety of reasons detailed below. Unfortunately in most cases there are no industry standard options for disabling cookies without completely disabling the functionality and features they add to this site. It is recommended that you leave on all cookies if you are not sure whether you need them or not in case they are used to provide a service that you use.

Disabling Cookies

You can prevent the setting of cookies by adjusting the settings on your browser (see your browser Help for how to do this). Be aware that disabling cookies will affect the functionality of this and many other websites that you visit. Disabling cookies will usually result in also disabling certain functionality and features of the this site. Therefore it is recommended that you do not disable cookies.

The Cookies We Set

If you create an account with us then we will use cookies for the management of the signup process and general administration. These cookies will usually be deleted when you log out however in some cases they may remain afterwards to remember your site preferences when logged out.

We use cookies when you are logged in so that we can remember this fact. This prevents you from having to log in every single time you visit a new page. These cookies are typically removed or cleared when you log out to ensure that you can only access restricted features and areas when logged in.

This site offers newsletter or email subscription services and cookies may be used to remember if you are already registered and whether to show certain notifications which might only be valid to subscribed/unsubscribed users.

This site offers e-commerce or payment facilities and some cookies are essential to ensure that your order is remembered between pages so that we can process it properly.

From time to time we offer user surveys and questionnaires to provide you with interesting insights, helpful tools, or to understand our user base more accurately. These surveys may use cookies to remember who has already taken part in a survey or to provide you with accurate results after you change pages.

When you submit data to through a form such as those found on contact pages or comment forms cookies may be set to remember your user details for future correspondence.

Third Party Cookies

In some special cases we also use cookies provided by trusted third parties. The following section details which third party cookies you might encounter through this site.

This site uses Google Analytics which is one of the most widespread and trusted analytics solution on the web for helping us to understand how you use the site and ways that we can improve your experience. These cookies may track things such as how long you spend on the site and the pages that you visit so we can continue to produce engaging content.

For more information on Google Analytics cookies, see the official Google Analytics page.

Third party analytics are used to track and measure usage of this site so that we can continue to produce engaging content. These cookies may track things such as how long you spend on the site or pages you visit which helps us to understand how we can improve the site for you.

From time to time we test new features and make subtle changes to the way that the site is delivered. When we are still testing new features these cookies may be used to ensure that you receive a consistent experience whilst on the site whilst ensuring we understand which optimisations our users appreciate the most.

As we sell products it’s important for us to understand statistics about how many of the visitors to our site actually make a purchase and as such this is the kind of data that these cookies will track. This is important to you as it means that we can accurately make business predictions that allow us to monitor our advertising and product costs to ensure the best possible price.

The Google AdSense service we use to serve advertising uses a DoubleClick cookie to serve more relevant ads across the web and limit the number of times that a given ad is shown to you.

For more information on Google AdSense see the official Google AdSense privacy FAQ.

More Information

Hopefully that has clarified things for you and as was previously mentioned if there is something that you aren’t sure whether you need or not it’s usually safer to leave cookies enabled in case it does interact with one of the features you use on our site.

However if you are still looking for more information then you can contact us through one of our preferred contact methods. This Cookies Policy was created with the help of the CookiePolicyGenerator.com

Email: info@intrepidsourcing.com