Spinners realize that speed has become the dealmaker, for all segments of the market.
The knitwear sector remains energetic, with continual innovation. At the same time, an increasing number of mills are offering stock service, and are expanding their offering to include a wider range of colors and qualities.
At Spinexpo Shanghai (August 29-31), both mills and buyers were enthusiastic about the new season, although you could still sense strains of caution as mills waited for sample orders to materialize into actual orders.
While most mills still rely on foreign buyers to drive sales, more are starting to take China’s domestic market seriously. At the same time, mills are also exploring South America and Russia.
New Markets, New Products
Everyone agreed that the market is tough, yet there were still bright spots to be found here and there.
“The European market is still very tough. There are too many suppliers trying to chase the same buyers. Last year, we only grew 5 percent in the EU and US market. Other markets want better quality products - and can pay the price. So we need to develop those markets,” said Chen, general manager at Yarns & Colors Co., Ltd.
“One has to do something different now,” he said referring to his collection of knits that look wovens, a product that Yarns & Colors has pioneered. The advantage is that mills can offer lower minimum order sizes (MOQs), a big win for buyers.
“From what we see, the China market is doing very well. On the other hand, the EU and US market is not doing so well. The Japanese market is quite tough,” said Van Li, sales manager at Sawada Hong Kong Co., Ltd.
“At the moment, Europe is a better market than the US. They have better quality, and their turnover is much more faster, with European buyers demanding 40 day delivery on the final garment, not yarns. That’s why we have to have a stock service. If we produce the yarn on demand, there will not be enough time to market the garment,” said Joey King, sales manager at United King Textile Ltd.
Quality is the Key
Many suppliers agreed that the high-end sector is the bright spot in the market.
‘The high-end is doing very well. The market for basics is not as big as it used to be,” Federico Gualtieri, executive vice president at Filpucci Spa, told Inside Fashion.
“Business is difficult and there are too many uncertainties with customers. Retailers are struggling to lure customers into their stores, but the only way to do this is to increase the quality of the product,” he said, discussing why it’s a mistake for retailers to continually focus on price and trade down their products.
“Quality is very important, especially in the EU market. From what we see, people want a combination of a luxury hand-feeling and fine fiber,” said Kano Chien, managing director at Best Leader (Tai Cang) Co., Ltd.
Speed vs Uniqueness
“Fast delivery is more important than price. It is critical that we can deliver the product within one week,” said Joey King, sales manager at United King Textile Ltd.
“Because of the speed issues, some of the orders are shifting back to China from Bangladesh. If buyers buy the yarn from China then air freight the raw material to Bangladesh, it will cost them more than what they would save on duty. The basic orders are still staying in Bangladesh, but for complicated products, it is coming back to China,” he added.
While many mills have boosted speed to market by offering stock programs, there are plenty of others who are taking a different path.
“We don’t have a stock program. Everything is made-to-order. It is not practical to run a stock program for fancy yarns like ours. Each order is so different, we have to make products based on actual market demand,” said Jiang Mingzhi, development director at Perfectex (Guangzhou) Textile Technology Co., Ltd.
“Yes, speed is a big challenge, but most of the time it is the dyeing and finishing part that slows things down. Since China has tightened up its environmental laws, many dye houses in our region were forced to shut down. During the last few years there was not enough capacity to process our products, “said Mr. Jiang.
“There are many suppliers, like Huafu and Bros, that are offering stock service. Essentially, they are just playing with colors. We are different. Our product is custom-made based based on each client’s requirement,” said Job Zhou, merchandise manager at Jiangsu Guotai Int’l Group Guohua Corp Ltd.
However, while buyers might want custom products, they seem to want fast delivery even more.
“We see the orders getting smaller and smaller. The market is increasingly difficult and we have to work with big customers. If the orders are too small, it isn’t cost-efficient for us. Therefore we have to give up a lot of the smaller, higher-end brands,” said Mr. Zhou.