Sleepwear Report — Industry Overview — Sample Pages: Sourcing Sleepwear from China

Industry Overview: Sleepwear

Uncertainties in the global garment trade environment and challenges at home have given China's sleepwear suppliers a more cautious outlook for the year. Speculation about US and EU restrictions, coupled with government-imposed export taxes that were abolished only late in the previous year, were among the reasons behind a move to produce more midrange and high-end designs. The bilateral agreement with the EU in September 2005 and with the US in November came as a relief to makers because sleepwear is not included in the categories with import limits. The volatile export environment has already affected expansion plans: instead of investing in new or bigger factories, many suppliers are upgrading their existing facilities. Suppliers also face rising production expenses from a continuing labor shortage — initially limited to Guangdong and now widespread in Zhejiang and Jiangsu, the main production hubs for sleepwear — as skilled workers are enticed to other sectors by higher wages and better benefits, forcing makers to match those offers with higher pay, better housing and training.

Rising costs for synthetic fabric, plastic and lace trims and other garment accessories have squeezed margins further. As many as 40 percent of sleepwear makers in China will increase product prices by between 5 and 10 percent in coming months, but the majority will keep prices stable to stay competitive. Some established makers are cutting operating expenses by investing in automated machinery and vertical integration, while the bulk of suppliers are increasing R&D capability to improve designs and widen their style ranges. Many companies are expanding product lines, improving buyer services or enhancing quality through new fabric types: models in functional fabrics such as modal and Tencel add softness and luster, and natural materials such as silk, linen and bamboo blends have become popular for breathability and anti-bacterial features. The industry behind the report is vast: China is home to more than 10,000 manufacturers of sleepwear, exporting about US$1.5 billion worth of the product annually, and more than 90 percent are small and midsize companies producing from 10,000 to 500,000 pieces a month.

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, Jiangyin is profiled as the production hub, a fact the full overview develops with production and survey detail.

The overview also frames the 75 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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