Hats & Caps

China exported 3.4 billion hats and caps worth more than US$1 billion in 2004, up 22.7% from the previous year. The removal of quotas is expected to result in even greater growth in 2005.

As a result of this increase in demand, many China suppliers are constructing additional factories or expanding existing ones to boost capacity by as much as 50%.

This report prepares you to tap new opportunities in one of the world's fastest-growing — and most competitive — supply markets.

Benefit from 64 profiles of China hat and cap manufacturers, plus inside information on new products, prices and designs that make it easy to pre-qualify suppliers who meet your needs.

What you'll get

Impartial, in-depth profiles of 15 key suppliers in China, including details on manufacturing capabilities, products and prices, and forecasts for the year ahead. Based on personal factory tours and interviews with senior managers, this information is available nowhere else

Short profile tables of 49 additional manufacturers, highlighting key information such as product ranges, monthly output figures and number of sewing, cutting and forming machines installed

At-a-glance data on 110 popular export models, including detailed specifications and full-color pictures

The results of Global Sources' latest supplier survey, forecasting price, product, production and R&D trends for the next 12 months

This report covers: sports caps and visors, fashion hats and caps and winter headwear

How you'll benefit

Improve your competitive advantage with an advance look at the latest design and material trends in China's hat and cap manufacturing industry

Discover how producers are making their hats more functional — thereby boosting their "customer appeal"

Pinpoint the differences in quality and features between low-end, midrange and high-end hats and caps made in China

Benefit from quick-to-use summary listings covering all featured suppliers, with easy-to-compare statistics, as well as verified contact details

Executive summary

China's US$1 billion hat and cap industry is gearing up for increased demand as more overseas buyers shift their sourcing to the country's nearly 3,000 export suppliers. The lifting of US quotas on cotton and polyester hats and caps is also a factor behind steadily growing demand.

In 2004, total outbound shipments increased 22.7 percent from 2.7 billion to 3.4 billion pieces. The US and the European Union are the country's top export markets.

One of the biggest challenges facing China's labor-intensive hat and cap industry today is the increasing cost of production. Higher material prices and rising worker salaries pushed total manufacturing and operating costs up by as much as 30 percent last year.

The following are some of the key trends we see in China's hat and cap industry:

The majority of hat and cap makers will be significantly increasing capacity to meet overseas demand. Most suppliers are building new factories or expanding facilities, while smaller companies are looking for more companies to subcontract production to.

Increasing production costs will continue to be an issue of concern for hat and cap makers in China. While about half of the suppliers are keen on keeping export prices stable in the next 12 months, the other half will definitely raise quotes.

OEM production will continue to drive exports for the next few years.

The US and EU will remain the country's major destinations for hats and caps, while the Middle East and Asia, Japan in particular, are emerging markets.

Sports caps will continue to dominate exports because they are the easiest to produce. Apart from this, sports caps are more versatile and can be used for promotional purposes, sports or as a fashion accessory.

Suppliers in China export three types of hats and caps — sports caps and visors, fashion hats and caps, and winter headwear. These are also the scope of this report.

Almost all hat and cap manufacturers produce sports caps, and there are some that specialize in the line. More than 70 percent of suppliers featured in this report produce all three kinds of hats and caps for export, and more than 50 percent have sports caps and visors as their main product line.

The Products & Prices section in this report discusses the main features of each hat and cap type and their price ranges. It also explains the differences between low-end, midrange and high-end products in each product category.

Product development and design focus are discussed in the R&D/ Design section, while the Materials & Components module details the main fabrics used by China makers.

The Manufacturing section lists the key steps in hat and cap production and how these differ in small, midsize and large companies.

Industry overview

Steadily increasing overseas demand is pushing China's hat and cap suppliers to boost production capacity, many by as much as 50 percent. But even as exports continue to rise, the industry is reeling under the pressures of labor shortages, increasing raw material costs and intense competition.

China exported 3.4 billion hats and caps worth more than US$1 billion in 2004, up 22.7 percent from the overseas shipments of the previous year. At $155.7 million, exports in the first two months of 2005 were already up 29.7 percent compared with the same period last year.

Higher overseas demand is the main reason for the export growth. Many buyers from the United States and the European Union that used to source hats and caps from Indonesia, Thailand, Vietnam and Mexico are now importing from China because suppliers there can offer greater value for money.

In addition, many existing US buyers have increased their imports from China, some by as much as 50 percent, mainly because US quotas on cotton hat and cap imports were removed in early 2004, and those on polyester items were lifted this year. The removal of quotas on cotton hats and caps, which account for at least 80 percent of China's total hat and cap exports, resulted in a 22 percent growth in exports of the product category in 2004. Post-quota overseas shipments of polyester hats and caps are expected to register an even higher growth of 30 percent.

Because of the increase in demand, many China suppliers are constructing additional factories or expanding existing facilities. Many of those with in-house embroidery capability will purchase computerized machines to improve efficiency. Most of the new facilities will begin operating by the end of 2005, while some will open in early 2006.

However, despite these expansions many suppliers might not be able to achieve their targeted capacity increases because of the labor shortage that companies in the southeastern coastal regions have experienced since last year. The hat and cap industry is particularly affected because of the labor-intensive production process, which involves cutting and finishing each panel by hand before the hat or cap is formed.

The shortage of labor has forced some companies to increase subcontracted production in order to meet orders. Many makers in Guangdong, one of the provinces most affected by the shortage, are subcontracting to factories in Jiangxi and Anhui provinces, where the labor situation is not as bad. However, the logistics of subcontracting, especially to factories in a different province, are difficult and costly. In addition, quality control and consistency can become a potential problem with this arrangement.

Therefore, a few makers are trying to retain their employees by improving working conditions and giving additional benefits. Some are even building more comfortable dormitories and better staff canteens, while others are offering free meals. Many suppliers have increased salaries of technicians and skilled workers 10 to 30 percent over the past year.

Samples of supplier profile

Asianhats Co. Ltd
Established in 2001, Asianhats is a trading and manufacturing company that produces hats and caps, scarves, gloves, socks, sportswear, T-shirts and other casual garments. Total sales were $3.2 million in 2004, with sales for hats and caps accounting for 88 percent.

The company's head office is in Shanghai and a factory dedicated to hat and cap production is in Yangzhou, Jiangsu province. The facility produces more than 41,000 dozen per month.

All of the company's output is exported, with 30 percent each going to the United States and the European Union, 15 percent to Eastern Europe, and the rest to the Middle East and Asia. OEM orders make up about 60 percent of exports, with Greece's NEY SA as one of Asianhats' main clients.

A 4,000sqm hat and cap factory is being constructed in Nanjing, Jiangsu. This factory is expected to double production capacity once it begins operations by the end of this year.

The company also has pending ISO 9001 and SA8000 applications.

Products
Hat and cap prices start at US$0.46 and US$0.56, respectively, and depend on design and embellishments. A model with special embroidery or prints can cost 30 to 50 percent higher than the base price.

Asianhats spends US$23,000 a year on its six-person R&D team, which releases 300 new models a year. New designs for winter headwear and fashion hats have heavy embroidery or large prints. Sports caps and visors have functional add-ons such as safety reflective tape, a flashlight or miniature battery-operated fan. Some caps have a bill that rotates 360 degrees, allowing the user to place the visor in any position.

Woven hats are made of cotton, polyester and acrylic, canvas, denim, nylon, corduroy, PU and genuine leather such as sheep and pigskin. Knitted hats are made of acrylic, wool, polar fleece and cashmere.

Sample of product gallery

Sports caps and visors Asianhats Model: TJ001 Minimum order: 1,000 pieces per color Packaging type: Plastic bag Delivery time: 10 days Indicated price: US$1.10 Description: Pure cotton twill sports cap; 58cm; adjustable; six panels with embroidered eyelets; embroidered logo at centerfront

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