T-Shirts and Polo Shirts

China exported US$3 billion worth of T-shirts in 2003. By August 2004, exports had grown by more than 30 percent year-on-year.

With the lifting of quotas, that number is growing even more dramatically, creating a wealth of new sourcing opportunities for you and also a number of potential pitfalls you should be aware of.

With this report, you'll benefit from profiles of 73 key China suppliers that will let you benchmark those manufacturers that best meet your needs.

Plus, a complete industry overview will update you on the latest design trends, QC developments, pricing forecasts and other key issues affecting this dynamic but volatile supply market.

What you'll get

15 in-depth profiles of major T-shirt and polo-shirt manufacturers, providing detailed information on product offerings, manufacturing capabilities and future plans

Short profiles of 58 additional suppliers with key facts such as output capacities, production checklists, export ratios and major export markets

A Product Gallery of 102 best-selling T-shirts and polo-shirts for men and women, with full-color pictures and detailed descriptions

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

This report covers: men's T-shirts, men's polo-shirts, women's T-shirts and women's polo-shirts

How you'll benefit

Single out manufacturers that produce T-shirts and polo-shirts for retailers such as Wal-Mart and Kmart, and for sports brands like Nike, Adidas and Reebok

Find out how new materials — such as DuPont's Sorona fibers (polymers that lend better stretch, recovery and stain resistance to fabrics) — will be used in upcoming T-shirt and polo-shirt designs

Get a detailed price guide that includes basic features and price ranges of low-end, midrange and high-end T-shirts and polo-shirts

Identify suppliers that have vertically integrated production systems, in which the knitting, printing and dyeing of fabrics are done in-house

Discover the comparative advantages of sourcing from trading companies vs. manufacturers

Executive summary

China's booming T-shirt and polo-shirt industry is poised for more than 30 percent export sales growth in 2005.

At US$3.3 billion, exports in the first nine months of 2004 already surpass 2003 shipments of US$3.2 billion. By the end of this year, exports are expected to cross the US$4 billion mark.

Japan is China's largest export market, absorbing close to US$2.5 billion worth of T-shirts and polo-shirts from January 2003 to September 2004. South Korea and Australia are second and third, importing US$447 million and US$361 million worth, respectively, in the same period.

The garment and textile quotas that have been in place since 1974 limit exports to the United States and the European Union. The US is currently China's fourth largest importer, absorbing some US$268 million worth in the same 21-month span, while exports to the EU amounted to US$559 million.

The quota system ends this year, and despite the possible safeguards that might be imposed on China T-shirts and polo-shirts, suppliers are already preparing for an exports surge post-quota.

The following are some of the key trends we see in China's T-shirts and polo shirts exports industry:

• Exports to the US and the EU are expected to increase by 20 to 50 percent after quota removal.

• Most suppliers will keep prices at current levels. Prices should drop once per-piece quota fees are removed, but suppliers still face rising raw-material and production costs. In addition, uncertainties over possible safeguards make suppliers wary of changing current price strategies.

• Suppliers are aware they cannot compete on low prices alone and are boosting R&D capabilities and moving up from low-end to midrange and high-end production to remain competitive.

• Production capacities are being expanded to meet the anticipated increase in demand. Many suppliers are building new factories.

China's more than 2,000 export manufacturers produce T-shirts and polo shirts for men, women and children. About half of these suppliers have direct export capability and the rest ship their products through trading companies. This report focuses on men's and women's designs and does not cover children's models. Most China makers of men's and women's T-shirts and polo-shirts do not produce children's models, and those that do usually offer these as a sideline.

T-shirts account for more than 90 percent of shipments, with men's T-shirts taking up more than half the export share. More than 70 percent of suppliers' output is produced for OEM clients. China suppliers manufacture T-shirts and polo-shirts for major fashion retailers such as Wal-Mart and Kmart, and for sports brands Nike, Reebok and Adidas. The remaining output carries suppliers' in-house brand names.

Industry overview

China's 2,000 export manufacturers are projected to export more than US$4 billion worth of T-shirts and polo-shirts by the end of 2004. This figure is expected to increase by more than 30 percent in the next 12 months.
The remaining garment and textile quotas will be lifted in 2005. Suppliers in China are gearing up for the expected surge in demand by expanding their capacities and upgrading equipment. They are also preparing for the inevitable cutthroat competition that will ensue.

Japan is currently China's largest importer, absorbing close to US$2.5 billion worth of T-shirts and polo-shirts from January 2003 to September 2004. Combined imports to the European Union amounted to US$559 million in the same period. Shipments to the United States, however, totaled only US$268 million, but this is expected to increase significantly next year.

This is despite the possible safeguards the US and EU might impose on imports of polo shirts and T-shirts from China. Such restrictions are possible because prior to China's accession to the World Trade Organization in 2001, the US signed a bilateral agreement with the country, under which the US can reimpose quotas on China's garments and textiles if a significant increase in imports is proven to harm local industries.

There is at least one precedent to this. In November 2003, the US capped imports of China-made dressing gowns, knit fabrics and brassieres — garment and textile categories with quotas lifted in 2002 — to 7.5 percent growth.

This year — even before quotas are lifted — the American Manufacturing Trade Action Coalition has filed 10 safeguard petitions against imports of China's garments and textiles, including cotton knit shirts.

Regardless of whether safeguards will be imposed or not, China suppliers are preparing for a post-quota exports surge. Many companies are constructing additional factories and purchasing more sewing machines in order to raise production capacities by at least 20 percent.

Suppliers are also gearing up for intense competition in the quota-free era. Without quotas, some China makers that rely primarily on quotas as their competitive edge will lose to suppliers that offer better-quality polo-shirts and T-shirts at competitive prices. As such, suppliers are improving manufacturing capability and product quality while cutting costs to boost their competitiveness in the quota-free market.

Apart from the anticipated post-quota price competition, makers have had to deal with rising production costs as a result of the labor shortage, power rationing, and the spiraling prices of chemical and synthetic fibers. Most suppliers are, therefore, increasing R&D expenditure substantially in order to come up with more effective means of reducing costs. Some makers are finding new ways of reducing fabric wastage. Cutting fabrics following CAD patterns instead of hand-drawn outlines has enabled makers to effectively reduce wastage by at least 2 percent.

Samples of supplier profile

Alion Textile Co. Ltd
Guangdong-based Alion produces 500 tons of knitted fabrics and garments each year and registered total sales of US$18 million in 2003. Established in 1998, the ISO-certified company is a joint venture between three Hong Kong-based companies and the China Textile Machinery (Group) Co. Ltd, a conglomerate of machinery manufacturers, scientific research organizations, and non-industrial and share-holding enterprises distributed throughout 12 provinces and municipalities in the mainland.

T-shirts and polo-shirts make up 78 percent of Alion's total sales at a value of US$14 million, and the rest comes from sales of outerwear, trousers and skirts. Although exports account for only 19 percent of total T-shirt and polo-shirt sales, this percentage has already increased 12 percent over the past year and is expected to grow by up to 20 percent in 2005.

Alion's main export market is the United States, absorbing 40 percent of the company's shipments. The European Union is next with a 25 percent share followed by Asia with 20 percent. The remaining exports are shipped to Eastern Europe and the Middle East.

Forty-three percent of export orders are produced on an OEM basis. Some of Alion's clients include Tomen Corp. of Japan and Chickeeduck of Hong Kong.

Products
Alion produces low-end to high-end T-shirts and polo-shirts, which are mainly sold to the domestic market under the company's in-house SI+ brand name. Export models are priced from US$1 for low-end styles made from pure cotton fabric, with basic round neck and print, to US$15 for high-end versions, using modal blends with quick dry functions. The company's best-selling models are the midrange mercerized shirts with quick dry properties priced at about US$8.

Men's models account for 70 percent of Alion's total polo and T-shirt output, and more than half of this percentage is polo-shirts.

Alion's 32-member R&D team focuses product development on improving the features of polo shirts and T-shirts using anti-sweat and quick dry fabrics. The team also coordinates with the sample production group to produce counter samples, and the cutting group to optimize lay out and fabric cutting using CAD systems.

Manufacturing
Alion produces 80 percent of its fabric requirements using circular knitting machines installed at its 10,000sqm factory in Foshan, Guangdong. Printing, dyeing and other finishing processes are subcontracted to neighboring factories.

Sample of product gallery

Men's T-shirts & polo shirts Alion Model: ALN-341T Minimum order: 500 pieces Packaging type: Polybag and export carton Delivery time: 45 days Indicated price: US$4.57 Description: Pure 180gsm cotton; short sleeves; round neck; piece-dyed and washed; with shoulder-pad stitching and embossed print

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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.

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