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

Industry Overview: Swimwear

Swimwear suppliers in China are increasing their focus on value-added and upscale designs as the low end of the supply market continues to saturate, while dealing with a labor shortage and coming to terms with US restrictions on imports of China-made swimwear. The large number of suppliers has produced intense price wars: competition is especially fierce in the high-volume low-end segment, the focus for most of the 3,000 companies in the industry. Well-established suppliers, about 20 percent of the industry, and specialists in swimwear can offer the lowest export prices in any price range, so smaller companies must keep up with price trends or upgrade design capability. Even many large companies are moving to upscale manufacture: prioritizing R&D, expanding product lines, improving quality and releasing new models more frequently, with value-added features including performance fabric, better embroidery, special prints and more accessories, supported by investment in advanced equipment such as Gerber pattern-making machines, plotters and cutters from the US and automatic printing machines from Japan.

The labor shortage is a problem for many companies: the need for skilled workers raises production expenses and affects capacity, and swimwear production is more complicated than most other garments, so training takes time and money. In off-season months, when capacity runs at about 35 to 50 percent, suppliers usually ask some workers to take leave on basic pay; some of those workers find better-paid jobs elsewhere, leaving companies short-handed in peak months. US safeguards are a further challenge: the two countries signed a Memorandum of Agreement in November 2005 restricting imports of a number of garment and textile categories, including swimwear. Larger makers shipping mainly to the US will continue to do so — US buyers place large-volume orders that usually do not have difficult design requirements — and some suppliers have set up offshore facilities in countries without export restrictions; the safeguard presses hardest on smaller suppliers, some of which have turned to markets without quota limitations such as Eastern Europe, the EU and Asia, or shifted to other garments entirely. On composition: about 3,000 manufacturers make swimwear in China, about 80 percent export directly or through trading companies, most makers are midsize companies with 300 to 800 workers and monthly capacity of 200,000 to 400,000 pieces, and small and midsize suppliers offer mainly low-end and midrange models for markets such as the Middle East, South America, Africa and Eastern Europe.

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

The overview also frames the 65 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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