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Children's T-shirts: Stable quotes to invigorate exports

Makers are adopting alternative materials, and revising sourcing and production strategies to avoid the need for markups.

Under efforts to boost overseas demand, manufacturers of children's T-shirts and tank tops in China are keeping prices low despite narrowing profit margins.

Children's T-shirt
  Nanjing Textiles is offering model 6T2198, a 95:5 cotton-spandex T-shirt with cap sleeves and a ballerina motif.

Orders from abroad declined at the height of the economic slowdown in late 2008 and have shown little improvement in the months that followed. Exports in the line were valued at $2 billion last year. The amount is 23 percent less than that of the previous corresponding period.

Purchases from the US, in particular, decreased by about 30 percent. Shipments to the EU and Japan dropped significantly as well.

Maintaining quotes at competitive levels, however, is becoming difficult for most suppliers, especially because material costs have been on an upward trend since 2H09. Pure cotton single jersey fabric, for instance, is roughly 5 percent more expensive now at $4.50 per kilogram.

Nevertheless, makers are opting to shoulder the additional outlay even at the risk of suffering losses. In the meantime, various steps are being taken to reduce expenses without sacrificing quality.

Many companies are strengthening relationships with long-term providers of textiles and accessories, enabling them to renegotiate payment and delivery terms. Some have agreed to give cash upon receiving the materials so that they can ask for larger discounts.

Others are choosing to adopt less-expensive grades of cotton and polyester in their new models. Fancy trimming boost the products' perceived value.

Manufacturers employing higher-quality fabrics, on the other hand, offer releases in simpler constructions and use the material's properties as the main selling point.

Decorations are kept to a minimum because the textile itself is already expensive. Alternatively, visual appeal is enhanced by adopting bold and bright colors, including pink, green and blue.

For larger profits, several businesses, particularly those in Guangdong and Jiangsu provinces, are discontinuing low-end production and focusing on upscale models instead.

In addition, makers are lessening the risk of bad debt by offering different terms for various transactions. Longtime clients are usually asked for a 30 percent deposit, with the balance paid later via TT. An L/C is preferred for large orders. Companies sometimes get export credit insurance when dealing with buyers that they are not familiar with.

Materials, prices & trends
Industry composition
Materials, prices & trends

Quotes for children's T-shirts and tank tops made in China depend primarily on the type of fabric and trimming used.

Pure cotton is often employed because it is naturally soft, breathable, moisture-absorbent and hypoallergenic. Further, products in this type of textile are comfortable and easy to care for.

Blended fabrics are also adopted in several releases. Cotton-polyester is preferred for less expensive models, while cotton-spandex is popular for providing better stretch.

The textiles usually have a single jersey, interlock or pique construction.

Embellishments can be in the form of prints or embroidery. Other trimming options include applique, rhinestones, beads, sequins and woven tape.

In general, products sporting bigger and more elaborate motifs command a higher price because a larger amount of material is utilized.

Low-end T-shirts and tank tops, which go for $1.50 to $2, are typically made of 65:35 or 60:40 cotton-polyester in a single-jersey knit. They have small and simple decorations.

Upscale models come in 100 percent cotton or cotton-spandex interlock or pique. Organic fabrics are also adopted in a number of releases. Priced between $2.50 and $6, midrange and high-end styles usually feature complex trimming with multiple colors. Special design application techniques are sometimes utilized.

Most products under these categories meet the Oeko-Tex Standard 100, and EN and REACH requirements.

Contrasting elements are prominent among the latest children's T-shirts and tank tops from China. In certain models, the color of the thread used for stitching stands out against that of the fabric. Other designs have collars and sleeves in a shade different from the bodice.

As regards embellishments, suppliers are more inclined to adopt prints due to safety and cost concerns. Applique, beads and other similar trimming are likely to pose a choking hazard when not sewn properly or become detached. Further, printing is the most economical design-application technique available to manufacturers.

Motifs can have as many as 11 colors. Silk-screening and heat-transfer printing are the common methods utilized.

Water-based, rubber or glitter ink is employed. Plastisol types are sometimes used in high-end models.

Industry composition

Mainland China is home to about 10,000 makers of children's T-shirts and tank tops. This number is down approximately 10 percent compared with that of early 2008.

Most manufacturers offer other types of children's wear, including dresses, pants and suits. They often produce men's and women's garments as well.

At least 85 percent of the supplier base is composed of private locally owned businesses. SOEs account for 5 percent and the rest are foreign-, Hong Kong- or Taiwan-invested.

Sixty percent consists of small plants, which generate revenue of $5 million at most each year. These companies have fewer than 300 personnel.

Run by up to 600 workers, midsize operations represent 30 percent of the manufacturing base. Their annual sales top out at $10 million.

Large enterprises have more than 600 people in their employ. The yearly revenue usually exceeds $10 million.

Most makers procure textiles from local providers, and perform only cutting and sewing. Trimming application is subcontracted.

Bigger factories, however, are often equipped for in-house fabric production, printing and embroidery.

Under efforts to guarantee safety, companies require material providers to submit data sheets certifying that fabrics and accessories are free from azo, lead, nickel, cadmium and formaldehyde.

As an additional measure, samples are sent to independent testing organizations such as SGS, Intertek, MTL or STR for toxicity analysis.

Makers also carry out their own examinations. These are primarily to determine physical properties, including color, yarn count and weight.

Visual and tactile inspections are performed, both inline and prior to packaging. Finished products should have uniform sizing, correctly placed prints, securely attached embellishments and no skipped stitches.

Suppliers test output for tear strength, flammability, colorfastness, shrinkage and wrinkle resistance. Many have established in-house facilities dedicated to these measures.

Manufacturers of children's T-shirts and tank tops in China are mostly located in the provinces of Jiangsu, Zhejiang and Guangdong.

Jiangsu boasts a long history in garments and textiles. This has cultivated a strong supply network ranging from fabrics and accessories to production and exports.

Factories there are able to turn out models with complex constructions because their workers are skilled and have years of experience. The area's proximity to Shanghai is an advantage as well, allowing for convenient transportation and logistics.

Many small and midsize plants are based in Zhejiang. They offer mostly low-end and midrange designs. Well-established auxiliary industries have made it possible for suppliers to gain easy and inexpensive access to textiles and trimming. There are also plenty of dyeing and finishing specialists within the province.

Businesses in Guangdong, several of which have Hong Kong or Taiwan investment, focus on upscale releases. They often utilize advanced production techniques. Models from this location generally have intricate workmanship and are, consequently, more expensive than those from other sourcing centers.

Anhui, Jiangxi and Sichuan are emerging hubs for the line. T-shirts and tank tops from these inland provinces are mainly for the low-end and midrange markets.

This article "Children's T-shirts: Stable quotes to invigorate exports" is originally posted in Global Sources.

Note: All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.

Disclaimer: All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. We, our affiliates, and our affiliates' respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party.

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