Local threads

The booming domestic garment market is overtaking the lucrative exporting business, a report with the China National Garment Association indicates.

According to the National Bureau of Statistics, China's apparel manufacturing exports accounted for 41.33 percent last year, dropping by 10 percent within five years. The domestic market has become the major arena.

The market consists of three main segments: imported luxury brands, such as Armani, Valentino and Zegna; foreign brands which are licensed or franchised to local partners, such as Pierre Cardin; and 100 percent local brands.

First-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen are still the major focus for brand competition. But in the meantime, players attach increasing importance to provincial capitals and other key markets, with more investment on distribution channels, such as self-owned boutiques and counters.

The report points out the capital is playing crucial role in the development of the industry. To maintain sustainable growth, enterprises need to innovate and upgrade the existing manufacture facilities and marketing approach, which requires financial injection.

International collaboration is also the trend. At the beginning of this year, Ningbo-based men's ready to wear producer Younger acquired a 100 percent stake in Smart, a subsidiary of US apparel giant Kellwood, with the investment of $120 million. Such a move will open a prelude for domestic firms to further reach out to the international stage.

(China Daily 05/03/2008 page2)