comparative analysis of pakistan and china apparel industry

8/8/2019 comparative analysis of pakistan and china apparel industry

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MUHAMMAD ABUBAKERBET-FA-07-001


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COMPARATIVE ANALYSIS OFAPPAREL INDUSTRY BETWEENPAKISTAN AND CHINA


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Pakistan & China ApparelIndustry

Strength:

4th largest Cottonproducer 64% of countrys

export volume 1.4 Mn people

employed with 50%in apparel Low labor cost at US$

0.39 per hour

Strength: Italian exporters have demonstrated

a strong commitment topenetrating the Chinese market.

Italy currently amounts to 17.2% ofChinas total garment andaccessories import value, rankingit first worldwide and beingremarkably higher than othercompeting countries.

Chinese consumers regard Italiangarments and accessories to beof superior design, quality andstyle. Italian products have topbrand images, which show thegood taste and status of thepeople who wear them.

PAKISTAN CHINA


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Opportunities

Better laid down factories

on best practices

Potential of improving

confidence in buyer by

working directly &

closely

Home Furnishing from

Pakistan have made a big

name worldwide

Womens wear has a huge

potential

Opportunities China has been the largest garment and

accessories market in the world. The

market has been growing at an average of

over 10% annually and is expected to keep up the momentum in the future.

The Chinese garment and accessories industryis over-crowded with numerous

small manufacturers, who are competingagainst one another in the low-end

market. While in the high-end market segment,local brands are generally still

weak in quality and design, especially inresearch and development of new styles.

The demand for high-end products, on theother hand, is increasingly growing,

due to the rising income of Chineseconsumers, and an increasingly growing

number of white collars and the newly richwho are concerned with quality of life,

their own personal image, and western stylesof living.

PAKISTAN CHINA


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Threats:

Rising Cotton

Prices

China and India

being considered

as countries for

high value added

garments

Price Pressures

Threats:

Influenced by the global financialdisaster, the export value of garmentand

accessories from Italy to China reducedby 14.8% in Y2009, which could leave

more space for other foreigncompetitors and domestic producers

to develop their business in the Chinese garment

market.

Producers are geographically scatteredthroughout China, and competition in

China is increasing as China furtherintegrates with the world economy.Italian

garment and accessories companiesare facing increasingly intensecompetition

PAKISTAN CHINA


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Pakistan & China Textile &Apparel Industry

% Share in Global tradeWorld Trade Share

China, 24%

Hong Kong, 9%

Italy, 7%Taiwan, 2%

Pakistan, 2%

Mexico, 2%Indonesia, 2%

Other, 27%

Germany, 6%

Turkey, 4%Belgium, 3%

France, 3%

United States, 4%

India, 3%

Korea, Republic

of, 3%


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Cost parameter Pakistan India China Bangladesh

Indonesia Egypt

Average Labour wages

including all benefits 39 47 57 27 52 60

Factor Cost - Labour wages including all benefits (US Cents per hour)

Source: Country data / Gherzi analysis

Labour wagesabour wages

29

Vietnam

Labour costs still differ greatly in the reference countries and range considerably within the reference

countries. Based on industry sources we estimate the hourly average wages as follows:

INDEX 100 120 146 70 133 154 74

Although labour costs in Pakistan are low, due toa lower labour productivity in many mills, thisadvantage is neutralized.


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Pakistan Textile Exports Major Categories

Fabric

24%

Ready Made Garm

12%Knitwear (Hosie18%

Madeups Incl. Bed21%

Tents & C anv

1%

Art Silk & Sy n.

3%

Towel

6%

Other textil

2%

Yar

12%

Raw C ott

1%


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Global Trade is Growing

201 232258

281

351397

0

100

200

300

400

500

600

700

2005 2008 2010

Textile Apparel

CAGR: . %extile 5 8: . %pparel 9 6

82 Bn83 Bn

55 Bn

rojections of World Textile and Apparel Trade

:ou r ce I TC


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-arket Share of Total Apparel for USA Market 2010

Asian countries would gain inUS

14%11% 9% 6%

14%13%

12%12%

5%5%

5%

3%

15%18% 27% 38%

12% 12%

14%

17%

14%

13%11%

12%

11%16% 14%

5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2003 2005 2010

Rest of theWorldSSA

Asean

Taiwan &KoreaSouth Asia

China & HK

Europe

Canada

CBI

Mexico

:Source KSA


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As Well as in EU

56% 54% 53%

35%

9% 10% 13%

25%

7% 8% 9% 15%

11% 11% 12%10%

9% 9% 8% 7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2010

Rest of the

World

Romania &

Bulgaria

Euro Med

ASEAN

South Asia

China

Intra EU Trade

:Source KSA

- -arket Share of Total Apparel for EU 15 Market 2010


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How we improve ourself

Building Logistic Capabilities

Developing long term relationships with

Clients

Collaborating with buyers on forecasting

and inventory management

Investing in IT infrastructure andcompliance


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How we improve ourself

Think Value Not Price

Be on the Cutting Edge of Performance Reduce Cycle Time, Improve Flexibility

Align With a Few Truly StrategicPartners


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thanks

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comparative analysis of pakistan and china apparel industry