Women's sleepwear: Widespread discounts revive upscale shift

Sleepwear makers in China are moving upmarket in order to avoid price competition in the low end.

Since August 2008, export tax rebates for apparel were raised several times to the current 16 percent. This has given suppliers the opportunity to lower quotes and keep buyers interested amid the global economic slump.

In fact, the average unit price of women's models in the first half of 2009 was $1.63, a decline of 11 percent from $1.84 in the previous six months and an escalation of only 1 percent compared with $1.61 in the same span last year. The mean quote for men's styles was $2.51 in 1H08 and $2.67 in 2H08, 6 and 12 percent higher than $2.35 in 1H09, respectively.

Elevated prices in the latter part of 2008 can be interpreted as a backlash of surging material costs in the earlier months, during which companies withstood the pressure to keep quotes down. The need to recoup losses eventually led to the increase despite the ease in manufacturing outlay.

More exporters are now trying to steer clear of this situation, especially as other garment-producing nations, including Bangladesh, Vietnam and Cambodia, are considered rivals alongside other local factories.

In addition, makers report that only shipments of basic models are declining due to economic challenges. Value-added versions such as intricately embellished nighties and pajamas in environment-friendly materials continue to be popular. This has motivated suppliers further to change their focus.

Less than 20 percent of the 2,000 sleepwear companies in China currently derive at least 10 percent of overseas revenue from upscale styles. While only 5 percent of these enterprises concentrate on the high end, others are planning to increase output of premium models so that they dominate sales.

About 5 percent of makers that create low-end designs exclusively intend to add more expensive varieties to their range. They are first, however, looking for potential clients before allocating greater resources for the endeavor.

The most common approach for upgrading products is to utilize natural and environment-friendly textiles, including traditional and organic cotton, silk, bamboo fiber, and soybean- and milk-protein. Versions that adopt these materials can be priced up to three times as much as those made of synthetic yarn.

Some buyers, especially those from the US and the EU, require organic cotton and bamboo fiber styles to comply with the Global Organic Textile Standard. In these instances, suppliers purchase fabrics from mills that have acquired GOTS certification. This usually adds 10 percent to quotes.

Another way to make releases "green" is to use natural dyes.

A few businesses are also establishing OBM lines. They are strengthening R&D capability in order to come up with designs, packaging and marketing materials that form a cohesive brand image.This allows them to price nightclothes that carry in-house trademarks at about 50 percent higher than OEM models. Production hubs

The provinces of Guangdong, Jiangsu, Zhejiang and Shandong are the main sourcing centers for sleepwear in China. Together, they account for nearly three-fourths of the country's exports in the line.

Guangdong is the largest supplier, shipping $1.2 billion worth in 2008. This represents 26 percent of national revenue. More than 90 percent of overseas sales are for women's models.

Jiangsu contributed about 21 percent, or $990.5 million, to last year's total exports. The hub is the top producer of men's designs even if these make up only 28 percent of shipments.

Zhejiang's 2008 foreign income amounted to $774.1 million, equivalent to a 16 percent share. The area ranks third and fourth among all provinces in terms of women's and men's varieties, respectively.

Output from the province is mostly made of silk because of the abundant supply of the fiber there.

Shandong's revenue of $501 million accounts for 10 percent of the country's international sales. Roughly 68 percent is for women's styles.

This article "Women's sleepwear: Widespread discounts revive upscale shift" is originally posted in Global Sources.

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