Taiwan's textile and apparel production has been in steady decline for the past five years, with exports falling 3% between 2002 and 2006. However, trade statistics fail to highlight an important trend: Taiwan's apparel industry is cultivating its own brands which are made and sold in China. By Vicky Sung.

Even though Taiwan's textile and apparel production has been on a steady decline for the past five years, it still has no fewer than 21 textile and apparel associations with 1,861 members and 5,673 registered factories.

According to Taiwan's Department of Statistics, fibre/textile/apparel's share of the total manufacturing pie has decreased from 6.2% in 2002 to 3.9% in 2006. Of these three sectors, apparel (and related accessories) takes the smallest share and the trend looks set to continue.  

The number employed in the whole sector has dwindled from 234,020 in 2002 to 190,513 in 2006. For apparel, it has fallen from 79,000 to 55,668.

Textile and apparel exports had just a 5% share of total export value in 2006, whereas in 2002 it was 9%.

Of the three sectors, apparel had a 13.6% share in 2002 while textiles had 61.7% and fibres 24.7%. But by 2006, apparel claimed just 9.5%, textiles 57.4% and fibres 33.1%.

Taking 2001 as a base of 100, the production index of Taiwan as a whole rose to 142.51 in 2006. But for apparel and accessories it dropped to 54.6, textiles to 72.43 and manmade fibres to 92.28.

Textile exports fall 3%
Exports of all textile products including fibres fell from US$12.177bn in 2002 to US$11.789bn in 2006. The sector had represented 9% of Taiwan's exports by value in 2002, but only accounted for 5% in 2006.

By value, fabric exports accounted for more than half of textile shipments in 2006, at 58%, while apparel and accessories were only 10%. Exports of fibres and yarn increased, whereas apparel and accessories fell from US$1.903bn to US$1.159bn and from a 15% share to 10%.

As in past years, the US was the major market for apparel shipments in 2006. In apparel and accessories, the US took 68%, dwarfing the 4% each to China and Hong Kong and Vietnam's 3%.

In woven apparel, the US took the lion's share at 83%, followed by Germany, Canada and the UK. In knitted apparel, the US again topped the list with 82% of the pie, followed by Canada, China and Germany.

Minute increase in imports
Imports of textile products remain small but showed a minute increase from US$2.505b in 2002 to US$2.730b in 2006 (including re-exports).

Apparel and accessories accounted for 43% of textile and clothing imports by value in 2006, rising considerably from US$795.716m in 2002 to US$1.152b. Major sources included China at 32%, HK at 20%, Vietnam at 11% and Italy at 8%. China is the biggest source for woven apparel, knitted apparel, as well as accessories. 

Trade balance
The textile trade balance between Taiwan and China continues to rise according to Taiwan's Customs Statistics, from US$337m to US$1,561m.

Taiwan's export value to China soared from US$540m in 2002 to US$2,149m in 2006, while imports from China rose from US$203m to US$588m. Taiwan occupies a small 0.5% share of China's textile export market, while it takes a 13.2% share of China's textile imports according to China's Custom Statistics.
Textile exports from Taiwan to China via Hong Kong, however, declined from US$1.511bn in 2002 to US$1.246bn in 2006. Fabrics and yarns constitute a majority 97% share of this trade.

In contrast, China's exports to Taiwan via Hong Kong continue to rise, from US$71.866m to US$150.981m. The biggest increase came in 2005 and 2006, with a jump of 32% and 46% respectively, with apparel taking the biggest share and the fastest rise.

Brand development
However these statistics mask another important trend: Taiwan's apparel industry is cultivating its own brands and penetrating the Chinese market.

Design and brand development carried out in Taiwan, but with production and marketing in China, is not reflected in the trade figures. But this commercial strategy was clearly seen at the recent Taipei in Style (TIS) event organised by the Taiwan Textile Federation and the Taiwan External Trade Development Council.

Held as part of the government' Branding Taiwan project, which seeks to assist Taiwan brands in building distribution networks overseas, more than 100 delegates attended the event from China, including representatives from trade associations, department stores, designers, and trading groups.

Taiwan fashion businesses that have already made a successful entry into the Chinese market include C&C Luggage Manufacturing Crown Group which has made Crown the top luggage label in China and the second most popular in Japan.

The company has now developed a new luxury brand called 'Infinitus' and is preparing to launch its ladies' handbags, cosmetics and luxury items in mainland China. Its strategy is to enter second and third tier cities, since the top international luxury brands are already in the major first tier cities such as Beijing and Shanghai.

C&C says the key to success is finding a good partner in China.

Jockey International's marketing strategy is tailored to each region and country and makes use of all channels - TV, print and electronic media, events, bill boards, and department store promotions and exhibitions.

Mr Justin Huang, secretary general of Taiwan Textile Federation described Taiwan's apparel market as having plenty of low cost products, strong in international luxury brands, but weak in mid-range products.

This creates an opportunity for not only local brands but also foreign brands who wish to fill this gap.

As the Taiwanese market is relatively small, one of Huang's goals is to help Taiwan brands to export outside of the island. China was targeted because of the common language, history and customs plus the fact that numerous Taiwan manufacturers have either already moved to or are establishing production operations in China.

The Olympic Games being held in Beijing next year should also present an excellent opportunity for Taiwan's textile and garment manufacturers to expand their branded products in China.

Next month Taiwan plays host to the International Apparel Federation's 23rd World Apparel Convention. The theme of this year's IAF conference is "Asia: An Emerging Consumer Market from a Global Production Base". There are four sessions to be presented under the theme, including Trade Liberalization vs Barriers, Asia Market: Risks & Opportunities, Capacity Growth vs Profitability, and Technological Development and its Application to Production and Marketing.

The event, which takes place in Taipei, is hosted by the Taiwan Textile Federation (TTF) and runs concurrent with TITAS 2007, the Taipei Innovative Textile Application Show.