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Lingerie sets: Efficiency measures enable low quotes

Suppliers are countering deep discounts through the precise planning of production lines and material consumption.

Makers of women's underwear in China are implementing cost controls as price competition intensifies within the industry.

While consumer demand remains weak, suppliers are facing pressure from buyers to lower quotes. In fact, Guangdong Weiermei Underwear Co. Ltd and Zhejiang Huinongsi Knitting Underwear Co. Ltd, two companies interviewed for this report, have decreased prices in the past quarter. Reductions in the latter even reached 20 percent, merely allowing the manufacturer to break even. All other featured exporters kept prices stable.

Lingerie set
Guangdong Weiermei uses an allover print to approximate the look of lace in models 8740 and 6739.

Rising material outlay and a small MOQ are exacerbating the situation. For example, cotton yarn increased by $293 per ton within a span of 30 days. Rates are expected to continue climbing in the next three months due to declining crop yield.

Makers intend to stock up on fabrics that are projected to become more expensive, but as clients now usually purchase a few pairs of various underwear models, they are finding it difficult to order textiles in bulk. Sourcing fewer meters at a time results in prices that are 2 to 5 percent higher.

To sidestep this limitation, suppliers are asking customers to substitute chosen materials and embellishments with less costly versions. For instance, lowering the amount of cotton in a cotton-polyester blend can create adequate savings.

Embroidery is sometimes reduced in size or replaced with a printing technique that can convey the same design spirit.

Companies are also taking steps to improve efficiency and minimize wastage. These will help them protect profit margins and maintain sufficient cash flow.

R&D personnel are being more careful in calculating the unit consumption of materials for each style and size. They also monitor component stocks to check on the implementation of these estimates.

Further, factories are coming up with production plans that hasten processing. Lines are designed to avoid steps that do not add value to the item, including counting and transferring semifinished pieces. The strategy aims to lessen bottlenecks as well.

An emphasis on incoming QC is another approach. The rejection of a few well-made models due to stains and other defects can be prevented by weeding out flawed textiles immediately and thoroughly.

In addition, several manufacturers are cutting labor expenditure, mainly at the management level. Executives' salaries have been lowered by 5 to 10 percent. Bonuses are being adjusted based on the monthly gains of the business. A few organizations were also streamlined by letting go of supervisors.

Industry composition
Product range & trends

Lingerie set
Model JY-W01 from Jinjiang Jiayuan is a boyleg panty in 95:5 combed cotton-spandex and 90:10 nylon-spandex lace.
Industry composition

China is home to nearly 2,000 suppliers of bras and panties, 500 of which are traders. While most bra makers can produce panties, the reverse is less common. The usual sidelines are nightclothes, swimwear and men's undergarments.

The industry's annual output is estimated at 3.8 billion bras and 5.5 billion panties. About 60 percent of yield is exported.

Bra shipments in the first nine months of 2009 exceeded 1 billion pairs worth $1.3 billion. The figures reflect a 32 and 40 percent drop in volume and value YoY.

During the same span, foreign sales of panties exceeded $851 million for 1.9 billion pairs. Compared with the previous corresponding period, revenue declined by 20 percent while the quantity fell by 23 percent.

Japan, the US, the UK and Germany are the main destinations. Together they account for 48 percent of the country's exports.

Guangdong province is the top hub for both bras and panties. From January to September 2009, it shipped more than 2 billion pairs of women's underwear worth $1.2 billion, or 56 percent of China's overseas sales in the line. On volume terms, the share is 69 percent.

Suppliers in Guangdong are concentrated in the cities of Zhongshan, Shantou, Foshan and Shenzhen. Many of them are owned fully or partly by Hong Kong or Taiwan investors. Some are local factories that have formed joint ventures with companies in Japan or France.

Liaoning and Zhejiang are the next key sourcing provinces for bras.

The former exported 29.8 million pairs worth $106.3 million in the same period. With an average price of $3.57 compared with the $1.28 national mean, models from the hub are typically high-end. Material costs are also relatively higher than those in the southern coast because the network of providers within the province is not as extensive.

Most makers have small operations of about 100 employees and are located in Dalian and Yingkou. Their clients are generally in Japan.

Zhejiang's shipments in the nine months to September 2009 exceeded 95.8 million pairs worth $94.3 million. The majority of companies there are locally owned, offering mainly low-end and midrange products. Yiwu is the largest manufacturing center and exports mostly seamless designs.

For panties, Fujian and Shandong provinces are also major production centers. Their revenue amounted to $126.6 million and $92.9 million, respectively. These represent 15 and 11 percent of national revenue in the category.

Product range & trends

China-made bras and panties come in a variety of materials, the most common of which are cotton, polyester and nylon. Pure and blended versions of the fibers are utilized, with spandex as a conventional addition. Silk is also employed for upscale models.

In addition, suppliers are adopting functional and environment-friendly fabrics such as rayon from bamboo, bamboo charcoal, and soybean protein. Guangdong Weiermei uses a type of nylon that contains diatomite. The substance aids in absorbing sweat, making the textile more comfortable for the user.

Bras may have cut-and-sew or molded cups with full or demi coverage, front or back closures, and racer back, convertible or traditional straps. They are fitted with underwire or come wire-free. Manufacturers also have the capability to create one-piece designs.

Panties come in thong, T-string, G-string, bikini, boyleg and tanga configurations. They may have a high or a low waistband and are either seamless or stitched.

Solid-colored, printed and lace-embellished styles are available. According to interviewed companies, plain models are popular among clients in Europe, while buyers in Asia prefer those trimmed with lace. Bows, whether small or large, are also common ornaments.

Prints are currently not in favor, possibly because the trend for "green" processing remains a costly option. Suppliers are still developing patterns, however, such as bold and tiny flowers, polka dots and leopard spots.

Bra prices start at $0.65 and can exceed $5, while quotes for panties are generally between $0.30 and $2 per pair. These vary depending on the materials, design complexity and size. Products are marketed individually and in sets.

This article "Lingerie sets: Efficiency measures enable low quotes" 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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