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March 4, 2022updated 26 May 2022 3:28pm

ANALYSIS: China market share of US apparel imports rises after four-year lull

China's share of US apparel imports has grown for the first time since 2017, with new figures suggesting sourcing executives relied on the country at a greater rate in 2021 – despite the industry being awash with talk of re- and near-shoring.

By Beth Wright

Just Style has analysed full-year import data from the US Office of Textiles and Apparel (OTEXA) which reveals the top ten apparel suppliers to the US in 2021.

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The evaluation of each supplier country’s share of US apparel imports over the course of the year has revealed China’s slice was the largest at 37.76%. This marks a 4.9% increase from its 36.60% share in 2020 and is the first year-on-year rise since 2017.

Five others, including the third-largest supplier of clothing to the US – Bangladesh –  saw a year-on-year rise in their share of US apparel imports. Bangladesh saw its holding rise 7.70% to 8.84% in 2021 from 8.17% a year prior, while Honduras and El Salvador’s shares also increased, to 2.96% and 2.23%, respectively.

Pakistan and India booked the largest increases with the South Asian countries seeing their respective shares rise 11.40% and 11.30% year-on-year to 3.04% and 4.35% overall.

Biggest losers of US apparel imports market share

At the other end of the scale, Cambodia saw the biggest drop in market share with its slice of apparel imports to the United States falling 13.30% in 2021 to 4.22% from 4.87% in 2020.

Neighbouring Vietnam, the second-largest supplier of garments to the US behind China, also reported a decline with its share of imports dropping to 14.84% from 16.37% a year prior.

Indonesia and Mexico also saw their shares recede, falling to 3.76% from 3.99% and to 2.80% from 2.94%, respectively. 

Drilling down

When taking a broader look at the data, it is clear that China’s closest competitor, Vietnam, has been steadily increasing its share of apparel imports to the US year-on-year. In fact, its drop in 2021 to 14.84% marks its first since Just Style started analysing OTEXA data in 2010. 

Next in line Bangladesh has been increasing its share since 2018 but is still some distance from closing the gap with Vietnam at 8.84%, despite its competitor’s decline in 2021.

Cambodia’s drop last year was the country’s first after five years of growth. It is worth noting, however, that both Cambodia and Vietnam’s year-on-year declines in 2021 follow rises in their shares of US apparel imports in 2020. These 2020 gains suggest sourcing executives turned to these countries when the pandemic hit. Specifically, Cambodia saw its share surge by 29.52%, while Vietnam saw its share rise by 15.04%.

Bangladesh and Pakistan also saw increases in their share of imports from 2019 to 2020, of 12.70% and 26.4% respectively.

Mexico also saw a rise, albeit a smaller one of 3.52%, in its share of US apparel imports in the period, suggesting some sourcing executives opted to look closer to home amid the crisis. One year on, however, Mexico’s share has fallen by 4.80% – which may be attributed in part to it being one of the priciest markets to source apparel from on a per-unit price basis. For the US to source apparel from Mexico, it is paying around $3.43 per unit, according to 2021 data.

China resurgance

China’s 37.76% share of US apparel imports marks a 4.9% rise from its 36.60% share in 2020. The increase is the first year-on-year rise since 2017 when China’s share of apparel imports to the United States stood at 41.91%, up from 41.53% in 2016. 

Since 2017, China’s share has continued to slide, edging down to 41.90% in 2018 and falling to 39.83% a year later in 2019. 

The downward trend over the course of the last few years has played out against a backdrop of political tension with the US-China trade war sparking tit-for-tat tariffs and allegations of forced labour in China’s Xinjiang region, which is responsible for 80% of the country’s cotton production.

Reducing dependence on China has also been top of mind for apparel sourcing executives in recent months, but many countries fail to compete with the country due to the sheer size of its supply base, wide skillset, quality and variety of products, and the completeness of its supply chain.

It is also the most competitively priced of the ten largest US apparel suppliers, with its per-unit price of garments standing at US$1.76 in 2021. This compares to $1.79 a year earlier – a fall of 1.7%.

The country outlined its latest five-year growth plan in March of last year, with the strategy aiming to push clothing production westwards – including the contentious province of Xinjiang – and grow the domestic market in the world’s largest producer of apparel, footwear and raw materials.

The Chinese government usually sticks firmly to its five-year plans, and even though the words ‘textiles’ and ‘garments’ are nowhere to be found in its latest one, the country’s broad goals will have a direct impact on the industry’s supply chain.

Spotlighting Pakistan and India

Meanwhile, the Asian sourcing hubs of Pakistan and India reported the largest gains in US apparel import share in 2021, at 11.40% and 11.30% respectively. 

With a 3.04% share overall, Pakistan’s holding might be in the lower quarter of the top ten suppliers but it is has been steadily increasing since 2018. In fact, its 2021 holding marks its best performance since Just Style started monitoring OTEXA data in 2010. 

What’s more, market share to the US and the European Union not only increased but accelerated during 2020, with buyers from both markets looking to Pakistan for its competitive prices. As the industry is local there are no shipping costs and despite the global logistics crisis there are no added lead times.

The country has also been applauded for its conduct during the initial Covid crisis, with manufacturers offering discounts and holding-up deliveries which has helped create an image of stability and reliability in the eyes of Western buyers in a post-pandemic world.

India’s large and diverse apparel sector is eyeing the position of “preferred sourcing partner” for the global textile industry and is said to be flourishing through sustained domestic sales growth and lucrative government incentives.

The country’s increased reliance on man-made fibres (MMF), a sharper focus on technical textiles and the construction of mega-production units have been major features defining its progress.

Until now India’s textile and clothing manufacturing industry has thrived on the reliable supply of domestically produced cotton. However, with the country’s ministry of textiles setting a target to increase the country’s textile and clothing exports to US$100bn by 2026 – up from US$30.4bn in the financial year ending March 2021, MMF will be key.

In September 2021, the central government announced a Production-Linked Incentive Scheme to boost MMF apparel and technical textiles manufacture, which provides direct subsidy incentives of up to 15% on companies’ additional sales over a base year for five years.

While Pakistan’s slice of the US apparel imports pie pales in comparison with China’s mammoth holding at almost 40%, it will be interesting to see how it progresses in the coming years.

Will countries such as Pakistan and Bangladesh, which have been doggedly increasing their market share every year since 2018 continue to chip away at China’s dominance? Will slow and steady ultimately win the race, or will China prove too great a competitor with its manufacturing prowess and rock-bottom price?

Earlier this month Dr Sheng Lu provided his exclusive analysis of the OTEXA data and revealed the trends and critical issues to watch in 2022 that will impact US apparel imports.

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Free Report
img

How can brands navigate the post-COVID-19 Apparel market?

In 2021, the Global Apparel market remained at 3% below pre-pandemic levels, with Europe and LATAM lagging behind. If they want to see full recovery, brands must look ahead. GlobalData is therefore offering this free report, Future of the Apparel Market Post Pandemic, to assist companies in adapting to the future market. This report explores the following topics:
  • Latest forecasts for the online apparel market out to 2025
  • How different regions and categories will perform, including which regions are lagging behind and which are performing at pre-pandemic levels
  • Which categories within the Apparel market are displaying resilience
  • Which brands are driving online spending
  • Impact of inflation on the Global Apparel market
  • What the biggest trends are that apparel businesses must adopt to succeed
Read our report on the Future of the Apparel Market Post Pandemic to gain valuable insights on how to best position your brand in a post-COVID-19 world.
by GlobalData
Enter your details here to receive your free Report.

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