Parkas & Windbreakers Report — Industry Overview — Sample Pages: Sourcing Parkas & Windbreakers from China

Industry Overview: Parkas & Windbreakers

China suppliers of parkas and windbreakers are raising prices by up to 15 percent and taking measures to enhance efficiency in response to rising raw material costs and an ongoing labor shortage, and a number of makers are also improving product quality. Raw materials are the most pressing challenge: most fabric and accessories used to make the jackets are petroleum-based, and with fluctuating crude oil prices their cost has increased by as much as 30 percent in a year. The labor shortage, initially limited to Guangdong, is now widespread in Fujian and Zhejiang, the main production hubs for jackets; a number of factories have only half their required permanent workforce at any given time, since most workers prefer temporary work, and skilled workers are enticed away by companies offering higher salaries and better benefits. Manufacturers must match those offers with higher pay, better housing and training, raising operating costs, and the lack of skilled workers has forced many companies to increase subcontracting by up to 30 percent to other jacket makers — often factories producing for the domestic market — which pushes costs higher still and can create scheduling and quality problems.

Because of these factors, makers have no choice but to increase prices: most suppliers will raise quotes by up to 5 percent, and a handful plan increases as high as 15 percent. To stay competitive, a number of companies are shifting to value-added models with functional treatments designed for comfort and durability; these are priced 20 to 50 percent more than regular designs, but there is less competition in the line. The most significant improvement is in water resistance: the most popular types carry ratings of 2,000 to 5,000 mm, while some suppliers now offer designs rated from 8,000 to 20,000 mm. Many companies produce parkas and windbreakers in high-performance materials such as Drilon, Entrant, Dermizax, Supplex and Thinsulate, imported from the US and the EU. On industry composition: China produces about 30 percent of global parkas and windbreakers supply, and exported more than 475 million pieces worth US$3.8 billion in the first 10 months of 2005, with export sales up 14 percent on the corresponding period of the previous year.

How to Read This Overview as a Buyer

Read the overview for decisions, not background. The cost figures tell you how much room a supplier has to negotiate: a maker absorbing most of a cost increase will either raise prices soon or cut somewhere you cannot see, and both possibilities belong in your order planning. The competition analysis tells you where your enquiry has leverage — crowded, standardised segments compete on price, while design-led segments compete on capability — and the supplier survey turns the industry's own expectations about prices, sales, research focus and capacity into a planning horizon for the year ahead. In this report, Quanzhou is profiled as the production hub, a fact the full overview develops with production and survey detail.

The overview also frames the 87 profiles that follow it. A profile's prices mean little until they are set against the overview's price trends; a factory's expansion plan means more when two-thirds of its competitors are expanding too. Buyers who read the overview first consistently shortlist better, because they know which claims to test when they reach the profiles and the product gallery.

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