China is the world's largest exporter of swimwear, accounting for approximately 70 percent of global shipments.
With steadily growing demand, exports continue to show strong growth. Most suppliers are anticipating overseas shipments to increase by at least 20 percent in 2006. Exports in the beginning of 2006 have already increased by more than 20 percent in value.
In 2005, the country shipped more than 259 million pieces of men's, women's and children's swimwear worth about US$383 million. Exports increased 26 percent in volume and 38 percent in value compared to the previous year.
The elimination of all WTO textile quotas in 2005 helped propel the US to become the top importer of China-made swimwear.
In that year, the US purchased US$79 million worth of the product, an increase of more than 500 percent in value from 2004.
Regionally, however, the EU takes the top spot with 92 million pieces worth US$128 million in imports. Germany, the UK, Italy, France and Spain are the main destinations for shipments.
OEM orders make up the bulk of shipments from China, especially those bound for the US and the EU. About 70 percent of the country's swimwear exports are for OEM clients. Many small companies devote their entire production to OEM business.
OBM products are shipped mainly to Eastern Europe, South America and Africa.
The following are some of the key trends we see in China's swimwear industry:
• More suppliers are expected to produce upscale designs in 2006, mainly because of the fierce price competition in the low end. Makers continue to enhance models by using performance fabric, unique prints, beadwork and embroidery.
• Buyers can expect more functional releases from China makers. UV resistance, shape retention and chlorine-resistance are among the common features that will be available in new products.
• Many companies are upgrading their facilities to improve production efficiency and design capability. A number of makers have invested in advanced equipment from Japan and the US.
• Women's swimwear will remain China's largest export product in the line. But more suppliers are venturing into the production of children's designs. The line has high growth potential mainly due to increased demand from the EU and Asia.
This report covers China suppliers that produce swimwear for men, women and children.
The Products & Prices section details both current and upcoming trends for swimwear. The features and prices of each type are discussed according to low end, midrange and high end. The different materials used and where they are sourced from are detailed in this section.
The R&D section discusses how makers are improving the quality of fabric and accessories as part of their efforts to release more functional and value-added designs.
Industry Overview
Swimwear suppliers in China are increasing their focus on value-added and up scale designs as the low end of the supply market continues to saturate. In addition, companies are dealing with the labor shortage and coming to terms with the US restrictions on imports of China-made swimwear.
The large number of suppliers in the swimwear industry has resulted in intense price wars among makers. Competition has become especially fierce in the high-volume low-end segment, which is the focus for most of the 3,000 companies. Well-established suppliers, which make up 20 percent of the industry, and those that specialize in swimwear are able to offer the lowest export prices for swimwear in any price range. Smaller companies are, therefore, forced to keep up with price trends or upgrade their design capability to gain an edge. Even many of the large companies are moving to upscale manufacture to avoid price competition in the low end.
Makers wanting to move to higher-end production are prioritizing enhancement of their R&D capability. They are expanding their product lines, improving the quality of swimwear and releasing new models more frequently. Many are also enhancing designs through value-added features including the use of performance fabric, better embroidery, special prints and more accessories.
To aid in the development of new products and enhance manufacturing capability, these companies are investing in advanced equipment such as Gerber pattern-making machines, plotters and cutters from the US, and automatic printing machines from Japan.
China's labor shortage is also a problem for many companies. The need for skilled workers is raising production expenses and affecting capacity. During off-season months when capacity runs at about 35 to 50 percent, suppliers usually ask some of their workers to take leave with basic pay. In these months, some of the workers are able to find better jobs that can guarantee higher income. Companies then find themselves short of workers during peak production months.
Makers do have the option of hiring additional workers to ensure steady production during busy months. But doing so means investing time and money in training, especially because swimwear production is more complicated than most other garments.
Safeguards imposed by the US, the largest importer of swimwear from China, is a challenge for some suppliers. The two countries signed a Memorandum of Agreement in November 2005 restricting imports of a number of garment and textile categories into the US, including swimwear.
Even with export restrictions, companies shipping mainly to the US, especially the larger ones, will continue to do so. These makers still prefer to export to the US because of large volume orders from buyers that usually do not have difficult design requirements.
Some suppliers, on the other hand, have set up offshore facilities in countries where there are no export restrictions.
In fact, the US safeguard is a pressing problem only for smaller suppliers. These trade policies have made it difficult for some small companies to survive because of limited shipping capability and the increased cost of acquiring quota from large businesses with direct export rights.
In response, some of the suppliers that used to focus on the US market have opted to explore countries and territories with no quota limitations, such as Eastern Europe, the EU and Asia. A number of them have even started shifting to other garments with no export restrictions.
Industry Composition
There are about 3,000 manufacturers of swimwear in China. About 80 percent of these, or 2,400, export their products directly or through trading companies. It is estimated that 60 percent of companies with export capability course their shipments through trading companies.
The majority of swimwear makers in China are midsize companies that have between 300 and 800 workers, and monthly capacity of 200,000 to 400,000 pieces. Small companies generally have less than 300 workers and can produce 50,000 to 200,000pieces a month. Small and midsize suppliers offer mainly low-end and midrange models for export mainly to the Middle East, South America, Africa and Eastern Europe.
Supplier Profile
Antex (De Qing) Fashion Co. Ltd
Established in 2004, Antex is a large maker and exporter of garments. The company posted sales of US$30 million last year, a 100 percent increase from earnings in 2004.
Swimwear takes up 45 percent of total sales. All output is exported, mainly to Italy, France and Spain. Italy's Golden Lady and Verdissima are among the company's major OEM clients.
The company has a factory in Zhejiang province and another in Hanoi, Vietnam. The latter has an area of 2,000sqm and has 150 employees.
Products
Women's swimwear, priced from US$2.20 to US$12 per piece or set, takes up 70 percent of output. The rest is divided equally between men's and children's models.
Designs for men are priced fromUS$2 to US$5 per piece, while children's models are US$1.20 to US$6. The company will keep prices stable this year.
Nylon and spandex blends are the most common materials used in designs. These are sourced from the provinces of Zhejiang, Jiangsu and Guangdong.
For upscale models, fabric is imported from Hong Kong or purchased from international suppliers such as Invista, Eurojersey and DuPont.
Most accessories are sourced locally, with some imported from Italy.
The company has a 62-member R&D team that includes designers from Italy. The team can release 1,000 to 1,700 new models annually.
Design and pattern development are done using CAD software, a digital input device, and equipment from Lectra and Algotex.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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