Analysis of China’s textile and apparel industry chain in 2022

Edited by Zhao Xinhua

Textile and apparel industry is divided into three layers:upstream industry is raw materials sector,midstream industry is textile and apparel manufacturing industry,downstream industry is apparel trade industry.The important factor of the textile and apparel industry is the textile manufacturing sector,which is still in development and has a low technical level.

The analysis of the upstream industry

Cotton

Raw materials include cotton,chemical fiber,leather,wool,etc.The cost of cotton accounts for 50-70 percent of the cost of textile manufacturing enterprises under normal circumstances.China’s cotton import volume is limited by quotas,and the fluctuation of cotton prices is obvious.

China’s cotton output was 5.731 million tons in 2021,down 180,000 tons or 3.0 percent from 2020.Of which,Xinjiang cotton output was 5.129 million tons,down 32,000 tons or 0.6 percent from the previous year;cotton output in other areas was 602,000 tons,down 147,000 tons or 19.6 percent from the previous year.ASKCI expects China’s cotton output to reach 6.02 million tons in 2022.

Silk

With the continuous increase of residents’ income,the continuous promotion of consumption upgrading demand,personalized consumption,green consumption,cultural consumption,the demand for silk products in the domestic market is gradually released,and the domestic sales of silk products is good in recent years.Data show that the output of silk and woven fabric (silk≥50 percent) in China fluctuates greatly in individual years,with the average annual output in the range of 500-700 million meters in the main years.The market supply is relatively sufficient,but the industry output continues to decrease in recent years.China’s production of silk and woven fabric (silk ≥50 percent) was 350 million meters in the first 11 months of 2021,down 1.8 percent year-on-year.

Data source:National Bureau of Statistics,ASKCI

Data source:National Bureau of Statistics,ASKCI

Wool

Wool spinning industry is an important sector of textile industry.It is a manufacturing industry that uses animal hair fiber and wool-type fiber as raw materials for wool primary processing,wool top manufacturing,wool spinning,wool weaving,wool dyeing and finishing and wool finished product processing.The expansion of domestic demand and upgrading of consumption will be the biggest driving force for the development of the wool textile industry,with the market size of the wool textile industry increasing from 5.25 billion yuan to 7.18 billion yuan in 2016-2019.However,in recent years,the profit of the wool textile industry has been declining due to the impact of multiple factors such as the sluggish international market,the slowing domestic economic development,the rapid rise of labor costs and the pandemic.It is expected to be relatively better in 2022,with the market size further rising to 7.61 billion yuan.

Chemical fibers

Chemical fiber industry is the upstream sector of textile and apparel industry,mainly providing chemical fibers for downstream processing.After a slight decline in 2017,China’s chemical fiber output has maintained steady growth,reaching 61.393 million tons as of November 2021,up 10.3 percent year-on-year.

The analysis of the midstream industry

The climate index of the textile and apparel industry declined in 2019 affected by the slowdown of China’s economic growth and trade frictions between China and the United States.The climate index of the textile industry has maintained expansion,and the utilization rate of production has improved quarter by quarter since 2020.In January of 2021,the market climate index of textile and apparel industry fell to the lowest level in the year due to the approaching of the Spring Festival holiday and the spread of COVID-19.The market climate index of textile and apparel industry recovered obviously in September,textile and apparel specialized market manager climate index was 50.27 and the business climate index of professional market merchants was 50.76 in December.

Data source:ASKCI

Data source:National Bureau of Statistics

Data source:CATA

Data source:MIIT

Data source:MIIT

Data source:MIIT

Apparel output

In recent years,China’s clothing consumption has shifted from a single consumer demand to a consumption trend of fashion,culture,brand and image.The clothing industry is facing the pressure of transformation and upgrading,and the growth rate of the industrial scale continues to decline.Apparel production rebounded slightly to 24.472 billion pieces in 2019,up 3.28 percent year-onyear.19.1 billion pieces of clothing were produced from January to October 2021,up 8.9 percent year-on-year.

Enterprise revenue

The gross margin of the downstream of the textile and apparel industry chain is relatively high.Brands and retailers have much higher margins than processors,at 40-50 percent,while clothing manufacturers have gross margins of around 15 percent.

From January to October in 2021,there were 12,591 enterprises above designated size in the apparel industry,with a cumulative operating revenue of 1,182.5 billion yuan,up 8.3 percent year-on-year.Its profit totaled 53.4 billion yuan,up 4.6 percent year-on-year;the profit margin was 4.5 percent,up 0.15 percentage points from January-September.

The downstream industry

The core competitiveness of downstream brand retail industry is mainly reflected in sales channel layout,brand development and operation ability,product design and development,supply chain management and other aspects.

Market size

The domestic textile and apparel market recovered steadily in 2021,which played a stronger role in promoting the steady recovery of the economic operation of the industry.The retail sales of clothing,shoes,hats and knitted textiles above designated size reached 1,384.2 billion yuan in 2021,up 12.7 percent year-on-year,according to the National Bureau of Statistics.

Segmentation of apparel market size

The Chinese men’s clothing market has been developing well in recent years.The retail revenue of China’s men’s clothing industry increased year by year from 2016 to 2018.The retail revenue of China’s men’s clothing industry reached 687.6 billion yuan in 2016,which is expected to grow at a compound rate of 9.6 percent between 2018 and 2023.It is estimated that the retail revenue of China’s men’s clothing industry will reach 1,307 billion yuan in 2023.

Women’s education status has been improving year by year,which greatly increases the opportunity to get a good job,directly promoting the increase of female income,indirectly stimulating female’s demand for high-end brands.The growth rate of the overall market size of women’s wear industry still increased slightly in 2019,reaching 8.56 percent.The market size of China’s women’s wear industry was about 1,057.3 billion yuan in 2019.The market size of women’s wear decreased to 940.7 billion yuan due to the pandemic in 2020.Although the market size has declined significantly,it is still about twice the size of the men’s wear market.ASKCI estimates that the China’s women’s wear market size will reach 1,044.6 billion yuan in 2022.

With the improvement of people’s living standards,the public’s demand for children’s clothing has begun to show a diversified trend.Domestic children’s clothing brands have gradually risen,and overseas children’s clothing brands have also entered the domestic market.However,the overall development of China’s children’s wear market compared with men and women’s wear,is still at a low level.

In the long run,the total retail sales of children’s wear market in China will further increase driven by multiple factors.China’s children’s wear market will reach 320.1 billion yuan in 2022,according to ASKCI.

Data source:MIIT

Data source:National Bureau of Statistics

Data:General Administration of Customs

Import and export of apparel

China’s apparel export dropped year after year from 2016 to 2020.China’s apparel export reached USD 137.38 billion in 2020,down 6.4 percent year-on-year.China’s apparel export reached USD 159.27 billion from January to November 2021,up 25.4 percent year-onyear and 15.9 percent over the same period of 2019,hitting a new high for the same period since 2015.