Children's Wear

China accounted for 30% of global children's wear output in 2004. This figure was expected to rise dramatically, but the outlook is not necessarily bright for manufacturers.

US and EU apparel safeguards have forced many China suppliers to put their capacity expansion plans on hold and adopt a wait-and-see policy.

Now you can discover how these obstacles and other challenges are affecting your sourcing decisions, with the comprehensive industry overview in this report.

You'll also find profiles of 82 children's wear manufacturers, updates on hot products and design trends, QC developments and other issues impacting this volatile supply market.

What you'll get

Deep profiles of 15 major suppliers that offer details on manufacturing capabilities, quality controls, future development plans and more. Based on personal factory tours and interviews with senior managers, this information is available nowhere else

Profile tables of 67 additional suppliers, with key information such as production capacities, export capabilities, key export markets and main machinery installed

A Product Gallery featuring 157 of the most popular export items, with key specifications and full-color pictures

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

This report covers: newborns' clothing, babywear, toddlers' apparel and schoolchildren's apparel

How you'll benefit

Improve your competitive edge — discover the latest children's wear designs from China in advance

Use the comprehensive Price Guides as benchmarks when dealing with suppliers

Handpick suppliers that best suit your requirements using the detailed easy-to-compare profile tables

Know how manufacturing processes and production equipment differ at small, midsize and large suppliers

Discover the benefits of sourcing from the different key production hubs of Guangdong, Zhejiang, Jiangsu and Fujian

Executive summary

China accounted for approximately 30 percent of the world's output of children's wear in 2004. The elimination of quotas resulted in a 30 percent surge in exports in the first four months of 2005. However, it has also brought enormous challenges to the industry, threatening to hinder growth.

After the two largest markets for China-made children's wear, the US and the EU, imposed safeguards on various types of apparel, China suppliers have had to explore other options to stay in business. Small companies producing low-end apparel have been the worst hit, as many of them work on thin profit margins and do not have the resources to survive.

The following are some of the key trends and issues we see in China's children's wear industry:

Many makers are trying to boost exports to other regions, such as Japan and the Middle East, in view of the US and EU restrictions. Some large companies are even moving production to other regions in Asia or re-exporting via other countries.

Some suppliers producing low-end, high-volume garments are moving up the value chain, focusing on the production of midrange and high-end apparel. They are increasing investments in design capability to be able to offer more value-added products.

Even with increasing production expenses due to rising material costs, the export tax and labor shortage, most suppliers will be keeping prices stable in the next 12 months.

Schoolchildren's apparel will continue to dominate children's wear exports from China, followed by toddlers' apparel.

Suppliers offer a range of styles in both these categories, mainly because designs now follow adult clothing trends. Suppliers in China export four categories of children's wear — newborns' clothing, babywear, toddlers' apparel and schoolchildren's apparel. These are also the scope of this report.

Almost all children's wear manufacturers produce apparel for schoolchildren, and there are some that specialize in the line. More than 75 percent of suppliers featured in this report produce all four categories of children's wear for export, and almost 30 percent have schoolchildren's clothing as their main line.

The Products & Prices section in this report discusses the main features of each category of children's wear and its price ranges. It also explains the differences among low-end, midrange and high-end models 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 types of fabric and accessories used by China makers.

The Manufacturing section lists the key steps in children's wear production and how these differ in small, midsize and large companies.

The majority of children's wear companies in China are locally owned, while a few are foreign-owned. Reflecting this structure, 76 percent of suppliers featured in this report are private locally owned, while 23 percent are private foreign-owned or invested.

Industry overview

China is the largest and one of the most price-competitive suppliers of children's wear in the world. The industry, however, is currently in a state of flux as it deals with numerous challenges, including the export restrictions to the US and the EU, a government-imposed export tax, increasing material costs and labor shortages.

Exports of newborns' clothing and babywear sharply increased after quotas were partially lifted in 2002 and total overseas shipments of children's wear have continued to rise steadily in the succeeding years.

In the first four months after the last phase of quota removal in January 2005, children's wear exports to the US and the EU increased by 30 percent over the corresponding period in the previous year.

The surge in exports was expected, and to alleviate concerns of disruption in the US and EU markets, the government of China imposed a levy on more than 100 types of apparel, including children's wear. Since the beginning of the year, exported garments have been taxed at US$0.024 to US$0.060 per piece.

However, the export tax failed to limit the dramatic surge in exports, forcing the US to impose safeguards on a number of categories, including some types of toddlers' and schoolchildren's apparel.

As of July, the US had restricted four categories including cotton and man-made fiber knitted shirts, cotton trousers, and cotton and man-made fiber underwear. The quota for cotton knitted shirts, cotton trousers and underwear has already been met, while boys' woven cotton shirts have used up more than half of their allocated share.

In the case of EU, China agreed to limit export volume growth by 10 to 12.5 percent till the end of 2007. The quota for pullovers has already been reached, while that for knitted shirts, boys' trousers, girls' woven shirts and dresses are fast approaching their limits.

Although children's wear suppliers in China were anticipating the safeguards, the restrictions have nevertheless adversely affected the industry.

The quota limits on apparel categories apply not only to children's garments, but to men's, women's and children's combined. This has resulted in fierce competition not only among children's wear makers but with adult garment suppliers as well.

The situation has forced companies to rethink their business strategies. Many suppliers have put their capacity expansion plans on hold, adopting a wait-and-see policy.

Instead, companies are trying to boost exports to other markets such as Japan and the Middle East. Some large suppliers are moving production to other countries in Asia.

Meanwhile, a few are shipping goods to countries such as Bangladesh and Mexico, to be re-exported to the US and the EU. However, this effectively raises the price of garments, making them less competitive than apparel from other countries not affected by the new US and EU quotas, such as India and Vietnam.

Aside from the concerns arising from US and EU safeguards, suppliers have had to deal with other issues.

The cost of cotton, the main material used for children's wear, increased 30 percent in 2004 and by an additional 10 percent during the first half of this year. However, keen competition has prevented makers from raising product prices, even on value-added models. Many large companies have in fact lowered the prices of their basic designs by 10 percent in response to rival makers not only in China but in other garment- exporting countries such as India and Vietnam as well.

Instead of inflating prices, these large suppliers are looking at ways to reduce production costs. Some of them are computerizing processes to increase efficiency and cut costs.

Companies expect that investing in these new machines will enable them to reduce material wastage, minimize rejection rates and lower export prices.

In addition, the export tax, which is levied on a volume basis, has adversely affected suppliers focusing on low-end garments. Many of them are upgrading R&D capability to release value-added models, which yield higher profits.

Samples of supplier profile

Helios Textile & Apparel Co. Ltd
Established in 1997, Helios produces children's garments, casual wear for adults and sporting goods. The company's total sales amounted to US$6 million in 2004, with children's wear accounting for 60 percent, or US$3.6million. Export sales of children's garments grew 20 percent last year to reach US$2.5 million.

Since this Shanghai-based company is a joint venture between investors from Japan and China, all of its exports are currently shipped only to Japan. Seventy percent of orders are produced on an OEM and ODM basis, with clients including Itochu and Sumikin Bussan. The company has recently been licensed by England's BBC to produce and market the Teletubbies line of children's wear.

Running on 50 percent of its installed capacity, Helios produces 1.2 million pieces of children's garments a year.

Products
Helios manufactures both knitted and woven children's wear. Toddlers' designs dominate exports at 50 percent, school children's garments account for 30 percent, while baby clothing makes up the rest. The company releases collections for spring/summer and autumn/winter. Tops and bottoms each make up 40 percent of exports, while sets take up the remainder.

Prices of children's wear depend on the size and material used. T-shirts, short pants and outerwear for babies range from US$2 to US$4 per piece, and toddlers' clothing is priced betweenUS$2.50 and US$6. Casual wear and jackets for schoolchildren start at US$5, and go up to US$12.50 for an insulated water resistant jacket. Helios will keep prices stable until the end of 2005.

The company's 12-member R&D team develops more than 2,000 designs annually. Illustrator and CorelDraw are used for designing, while GGT and CAD systems are used for patternmaking and grading. The team mainly focuses on improving the overall quality of clothes, coming up with innovative prints and developing functional garments such as those with detachable sleeves.

Fabric used by the company conforms to environmental standards set by JIS and GB of China. About 5 percent of materials including polyester, nylon and cotton are imported from Japan and South Korea. Accessories such as buttons, zippers, labels, elastic bands and beads are sourced locally.

Manufacturing
The Global Sources team visited Helios' factory located in Changzhou city in Jiangsu province. The10,000sqm facility has separate workshops for cutting, sewing, ironing, and packing and inspection.

The company has 500 workers and a full range of garment-making equipment that includes five computerized, 175 lockstitch and double-needle, and 25 overlock sewing machines. The facility is also equipped with numerous bartackers, buttonholers, fusing machines, cutting machines and steam irons.

Helios has 45 QC staff in charge of examining fabric as it comes in, conducting in-process inspections and checking finished garments visually and with the help of needle detectors.

Sample of product gallery

Newborns' clothing Cliff Knitwear Model: BABY-COTTON-2 Minimum order: 500 pieces Packaging type: Carton Delivery time: 60 days Indicated price: US$15.00 Description: Girl's two-piece set; pure cotton; top: round neck, 3/4 sleeves; bottom: elasticized hem and waistband; sizes 0 to 12 months

And more... To see the full Executive Summary order now .

Global Sources Industry-specific China Sourcing Reports

All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.

If you'd like to order the China Sourcing Reports, please go to Global Sources website - http://www.globalsources.com, or click here. It is simply and convenient.