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Women's sweaters: Hangzhou, Huzhou highlight R&D

Makers in these Zhejiang cities bank on strong design capability as they focus on models made of synthetic fibers to boost sales.

Combining to account for about 50 percent of Zhejiang's 5,000-strong supplier base, Hangzhou and Huzhou are the key sourcing centers for sweaters and pullovers in the province. Zhejiang is actually China's second-largest manufacturing hub for the line, following Guangdong province.

Women's sweater
  Zhejiang Orient Multitex offers model SS 010, a 12GG sweater for men made of 40 percent wool, 30 percent angora and 30 percent nylon.
Hangzhou relies mostly on homegrown talents to firm up its position as a major R&D center for women's garments, particularly sweaters and pullovers. Most makers' design teams have members from established arts and fashion institutions in the country, enabling them to cater to ODM and OBM clients. In fact, orders from these segments account for more than 50 percent of some local companies' total production, significantly higher than China's entire garments industry. Products made primarily of synthetic fibers such as acrylic, polyester, nylon, spandex and rayon dominate its output.

Huzhou, meanwhile, is a key manufacturing and export base for wool and cashmere types, shipping out 690,000 pieces valued at more than $9 million in 1H09 alone. The city is backed by a mature industry chain, skilled workforce and well-entrenched transportation networks.

Suppliers in both cities also offer sweaters and pullovers in pure cotton, angora or blends of natural yarns. Lurex or metallic yarn is used in some women's lines as adornment. Models are available from 1.5 to 16GG and weigh from 120 to 410gsm. Some heavier versions, typically for winter, weigh up to 600gsm. Designs come in V-, round and turtlenecks and mostly with long sleeves, although some have short sleeves.

Releases are more fashionable, coming in loose and long styles covering the hips. They usually have dolman sleeves, waist belts, ruffles, paillettes, embroidery, printed motifs, cutout designs, and stripe and dotted patterns. These versions are available in vivid colors such as red, pink, orange, purple and green. Some styles have knitted front and woven back panels.

Although a few businesses turn out knitted wool dresses, pants, headwear, scarves, gloves and other accessories, sweaters and pullovers still make up more than 70 percent of their total output.

Models sourced from the two cities are shipped by way of Shanghai, Ningbo and Hangzhou. The major destinations are the EU, the US and Japan.

From January to October 2009, about 770 million pieces worth more than $4 billion were exported from Shanghai. These figures are 3 and 5 percent lower than 2008 data for the same period.

A similar trend was recorded in Ningbo. The customs office there registered total export volume of 180 million pieces valued at $680 million, a 12 and 3 percent decline from the previous year.

Hangzhou, meanwhile, recorded an approximately 48 percent increase in export volume and revenue, shipping out 30 million pieces for $40 million. This growth, despite the widespread downturn in other areas in China, has been attributed to the city's competitively priced synthetic-yarn and cotton sweaters and pullovers. The items, averaging

$1.30 and $2.18, respectively, are almost 70 and 46 percent lower than the country's unit prices. Cashmere and wool versions go for roughly $33 and $18.

"Buyers are slowly shifting from upscale designs in cashmere or wool," said Roy Liu, general manager of Hangzhou-based Jindaier Garment Co. Ltd. "Preference is moving toward models made of cotton, acrylic and polyester."

The growing popularity of pieces in the last two materials is evident in export figures. Volume and value increased 50 and 80 percent in the first 10 months of last year. As for the cotton line, shipment volume grew by almost 50 percent, but total revenue dropped nearly 27 percent, an indication that unit prices are decreasing.

These developments have prompted suppliers in both Hangzhou and Huzhou to focus on products made primarily of synthetic fibers to boost sales.

Wool or cashmere models blended with other yarns such as cotton and man-made fibers are beginning to gain ground as well.
Challenges & strategies

Challenges & strategies

As in many industries in China, the sweaters and pullovers line in Huzhou and Hangzhou was not spared by the economic slowdown of 2008.

Declining demand from overseas buyers has forced out small and OEM-dependent players in the past two years, shrinking the supplier base by about 10 percent.

Sharply increasing raw material costs and the possible resurgence of the yuan are compounding the situation for local companies further.

Interviewed suppliers said outlay for cotton, polyester and wool has grown by more than 15 percent since October 2009, following a series of oil price increases.

To mitigate the impact of these challenges, large manufacturers cut back profits, while others consolidate resources to minimize production expenses. Despite narrowing margins, local players opt to maintain quotes at current levels or raise export prices by 5 percent at most to stay competitive.

Moreover, enterprises intend to transact in euro and other foreign currencies, particularly in settling raw material and component procurements.

This article "Women's sweaters: Hangzhou, Huzhou highlight R&D" 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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