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Entering the European market for knitwear

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Italy was once the most important producer of knitwear for countries in the EU. That role has been taken over by China, Bangladesh, India, Turkey and others. If you want to be successful in exporting knitwear to Europe, you need to understand what qualities, styles and services are required by European buyers. First, let us look at the mandatory requirements you need to comply with when doing business with European buyers.

1. What requirements and certification must knitwear comply with to be allowed on the European market?

If you want to sell knitwear in the European market, you need to comply with several requirements. Some are mandatory, whether they are legal requirements or not. Others are voluntary, but meeting them can give you a competitive advantage. Some requirements only apply to certain niches in the knitwear market.

Mandatory requirements

There are many legal requirements for exporting knitwear to Europe, including those concerning product safety, the use of chemicals (REACH), quality and labelling. Check the EU Access2Markets online helpdesk for an overview. Additionally, many buyers have created non-negotiable terms and conditions for their suppliers to comply with. Although meeting these requirements is not required by law, they are still mandatory.

Follow these steps to ensure that your product complies with the relevant legal requirements:

  1. Make sure your product complies with the EU’s General Product Safety Directive (GPSD: 2001/95/EC). If your buyer supplied the product design, it is their responsibility to guarantee it is legally safe for consumers to use.
  2. Make sure you comply with the EU’s REACH Regulation. This restricts the use of chemicals in apparel and trims, including certain Azo-dyes; flame retardants; waterproofing and stain-repelling chemicals and nickel.
  3. Ask your buyer if they use a Restricted Substances List (RSL). These are often inspired by the guideline on safe chemicals use from the Zero Discharge of Hazardous Chemicals (ZDHC) foundation. Download the ZDHC Conformance Guidance here.
  4. Specify the material content of every item of knitwear that you export to the EU, in accordance with Regulation (EU) 1007/2011. Check the EU Access2Markets online helpdesk on how to do it.
  5. Do not violate any Intellectual Property (IP) rights and do not copy or share designs with other buyers. If your buyer provides the design, they will be liable if the item is found to violate a property right.


Non-legal mandatory requirements

In addition to the legal requirements mentioned above, you may be required to comply with non-negotiable terms and conditions that buyers have created for their suppliers. Such requirements are not required by law, but they are still mandatory.

Sustainable production and social compliance

Many buyers in Europe are increasing their demands in terms of sustainable production and social responsibility. At the very least, buyers will ask you to open your factory doors for them, so they can conduct personal inspections. Additionally, you may be requested to comply with the following standards and requirements.

  • Supply chain transparency is increasingly important for European apparel buyers. Both the German national fashion industry sustainability agreement and the similar Dutch fashion industry agreement call for members to disclose their suppliers, preferably all the way down to the raw materials. Currently, few manufacturers can trace their materials this far back. If you can, this will give you a competitive advantage.
  • Regarding harmful substances and organic production, European buyers may request standards such as the Standard 100 by Oekotex®, EU Ecolabel, BCI (Better Cotton Initiative), GOTS (Global Organic Textile Standard) or Bluesign®.
  • If you use natural protein fibres such as wool (including specialty wools such as merino, mohair, angora, cashmere) or silk, animal welfare is an important concern. Buyers may require that you only use RWS-certified wool. If you use merino, buyers may require that you use only non-mulesing wool. The use of Angora and Mohair is already banned by many European brands due to animal cruelty concerns.
  • Regarding social compliance in manufacturing, Amfori BSCI (Business Social Compliance Initiative) is the most popular (and often only) certification that European buyers will require. Other popular social standards are WRAP, SEDEX, ETI, SA8000, ISO 26000, FWF and Fair Trade.
  • Many European buyers increasingly appreciate the use of fabrics made with recycled content, a development supported by the EU’s ambition to become a fully climate-neutral, circular economy within 30 years. The most commonly used certifications for recycled content are the Recycled Claim Standard (RCS) and the Global Recycled Standard (GRS).
  • Another way to meet sustainability requirements is the use of fabrics dyed with only natural ingredients such as Rubia, Fibre Bio or Greendyes or dyestuffs made from recycled materials such as Recycrom.


  • Read how to comply with transparency requirements on the websites of the Clean Clothes Campaign and Human Rights Watch. Also, check the Open Apparel Registry, where many companies have already published their suppliers. To see how European brands are rated on transparency according to Fashion Revolution, check the transparency index.
  • For a complete overview of sustainability standards, check ITC’s standards map.
  • Provide buyers with as much information on your product as possible. The more information you can give about the origin of your materials, the better.

Packaging requirements

In most cases, your buyer will give you instructions on how to package the order, in a manual. If you agree with your buyer that they will clear customs in the country of import (which is the norm), it is their responsibility to make sure the instructions comply with EU import procedures. Your buyer will appreciate any efforts you make to reduce the environmental impact (and financial cost) of the use of packaging materials.

Payment terms

For a first-time order, European buyers may agree with a down payment (for instance, 30%). They will pay the rest (70%) after the order has been completed. The safest payment method for you as a manufacturer is the LC (Letter of Credit). An LC obligates a buyer’s bank to pay the supplier when both parties meet the conditions they have agreed upon. However, many buyers no longer favour LC payments, as this will block their cash flow. Be aware that LCs do not offer financial protection against bankruptcies!

For any further orders, most European buyers will ask for a TT (Telegraphic Transfer) after 30, 60, 90 or sometimes even 120 days. This means you as a manufacturer finish production and hand over the shipment to the buyer, including the original documents, before payment is due. The payment will be made after the number of days that you have agreed on with the buyer. This is a risky payment agreement because you are taking the full financial risk.


  • COVID-19 has shown the negative impact of extended payment conditions for manufacturers. It is advisable to negotiate a down payment on every order and a balance payment before handover. This reduces the risk of a cancellation due to a lockdown.

The buyer manual

When you do business with a European buyer for the first time, they will typically give you a contract and/or a manual to sign. By signing the contract, you confirm that you will comply with all the listed requirements. This means you will be held accountable in case of a problem after the delivery of an order. Especially complying with REACH can be challenging. With small orders, most European buyers will not ask for expensive testing, but if illegal chemicals are discovered after delivery, you will bear all expenses involved.

Acceptable quality limit

To guarantee product quality, your buyer may set an acceptable quality limit (AQL) for you. This refers to the worst quality level that is still tolerable. For instance, AQL 2.5 means that your buyer will reject a batch if more than 2.5% of the whole order quantity over several production runs is defective.


  • Read the CBI study on Buyer requirements for an extensive overview of the legal, non-mandatory and niche requirements you will face as an exporter of knitwear to Europe.
  • Check the EU Access2Markets online helpdesk for an overview of all legal requirements set for your product. Here, you can identify your product code to get a list of applicable requirements.
  • Check the freely accessible CSR Risk Check database to discover the social and environmental risks associated with apparel production in your country and ways to manage them.
  • Do not take financial risks with new buyers. Insure your orders via an insurance company or insist on a Letter of Credit.

What additional requirements do buyers often have?

In addition to non-legal, but mandatory requirements like standards and certifications, there are many services that buyers implicitly expect or at least highly appreciate if you want to do business with them. These requirements can differ from buyer to buyer.

Product design and development

European buyers are always looking for special production methods, materials or designs that will help them stand out in the market. First, it is important to understand the differences between the most common production methods.

  • The basic technique of handknit or v-bed machines has not changed for many years. These machines are still commonly used in many knitwear-producing countries. To reduce labour costs, such knitting machines are often replaced by fully automated STOLL or Shima Seiki machines.
  • Cut and sew manufacturing allows for high production speed and reduces waste by working around defects. Cut and sew lets you use the full width of the needle bed of a flatbed machine. With this technique, several linear yards of fabric can be produced as 1 piece.
  • Panel knitting is another popular way of knitting sweaters. The panels are knitted, and a separation thread is inserted between the panels to allow division. Several panels can be knitted at the same time side by side. After separation, the panels are cut based on the pattern and sewn together.
  • Fully fashioning or shaping manufacturing does not require any cutting. The fabric is shaped during knitting by decreasing or increasing the number of needles. The different pieces can then be attached by linking or stitching.
  • Knit-to-wear or whole garment knitting does not require any cutting or linking. The body and sleeve parts are knitted in tubular form and then attached together on the machine, using widening, narrowing and binding-off techniques, to produce a finished garment.


The design, quality and hand-feel of a knitwear item is for a large part determined by the type of yarn you use. Before you start the development of a knitwear collection, you need to source and develop yarns that comply with the buyer’s physical standards and price range. Especially pilling is a reason for many buyers to cancel an order.

Another important aspect for manufacturing knitwear is the hand-feel. It needs to be soft. This can be achieved by using a chemical softener, but it is better to use a natural yarn that already has these soft characteristics, such as merino, cashmere or blends.


Besides the material and knit pattern, the gauge determines the look of a knitwear style. A low gauge like 1.5 will give the piece a handknit appearance. This is popular in cold seasons and in lounge wear styles (a growing sub-category).

There is also an increased demand for 14-gauge or even 16-gauge pieces. Such fine-gauge items have an appearance that is much like a knitted jersey T-shirt.

The most mainstream gauge is the 12 gauge. If you use a fine yarn count on a 12-gauge machine, the sweater will look very similar to a 14 gauge.

Figure 1: Low-gauge knitwear has risen in popularity on the back of the loungewear trend

Low-gauge knitwear has risen in popularity

Photo by Valerie Elash on Unsplash


Smooth communication is an implicit requirement of all buyers. Always reply to every email within 24 hours, even if it is just to confirm that you have received the email and will send a more complete reply later. If you have a problem with a production order, immediately notify the customer and try to offer a solution. Another good tip is to create a time and arrival (T&A) for every order and share it with your buyer. This file will help you to manage expectations and monitor progress and is the best guarantee of on-time delivery.


  • Be proactive and prompt in your communication. Provide short updates to your buyer via text, photo or video, using WeChat, WhatsApp or Signal. To make free video calls, try Skype or Google Meet. Register all confirmations to prevent any unclarity in a later stage.

  • Make sure your buyer confirms the colour and quality of the yarn in advance. Send knit downs for testing and approval to prevent quality problems after delivery.


If you want to start a business relationship with a European buyer, be prepared to accept complicated orders first. Buyers will want to test your factory before giving you large, easy orders. Make sure at the start that a buyer will not continue to place only difficult orders with you and convenient orders elsewhere.

Expect a European buyer to require in their first order:

  • High material quality and impeccable workmanship;
  • Order quantities below your normal minimum order quantity (MOQ);
  • A price level that is lower than you would normally accept for small quantity orders.

Niche requirements

The following niche categories offer opportunities for knitwear manufacturers. The required qualities, styles and quantities may differ from mainstream production. This means you need to adjust your manufacturing and sourcing setup if you want to be profitable.

Sustainable knitwear

European buyers that offer ”sustainable” styles focus on different topics, ranging from supply chain transparency and animal welfare to organic production and recycled yarns. Animal welfare can be guaranteed, for instance, by the Global Animal Partnership standards. For wool, the TextileExchange offers the responsible wool standard (RWS).

Another niche is the use of recycled fibres. Knitwear is the only product group that can be made from 100% recycled post-consumer waste (cotton and wool). Styles made from wool and cashmere are recycled, for example, by Filpucci or Reverso. There are challenges. Recycled yarns can nap, which creates a (potentially undesirable) casual look and feel. The finest possible gauge for such yarns is 12 gauge. Determining the content (and the chemicals used) is also difficult when using post-consumer waste, so testing is needed.

Home wear/loungewear

Due to coronavirus restrictions, many Europeans have been forced to stay at home. This has increased demand for comfortable, casual styles. Home wear or loungewear is made from comfortable materials that have a soft hand-feel and do not wrinkle, including knitted items, especially with lower 1.5 and 3 gauge.

Mixed media

Luxurious styles that combine knitting techniques and materials (mixed media) are a growing niche in the European market. Combining techniques such as intarsia with high-quality blends like cotton, silk and cashmere can make a pullover look almost like a piece of art. Other mixed media styles combine knitted panels with woven panels (for instance, silk and cashmere for the luxury market or acrylic and polyester for lower markets).

2. Through what channels can you get knitwear on the European market?

For many European fashion brands and retailers, knitwear is a basic product group. This does not mean you should randomly approach potential buyers. First, you need to determine what market segment fits your company best and through what channel(s) you want to sell your product. The market is segmented by price and quality.

How is the end-market segmented?

European knitwear buyers can best be classified by price/quality level.

Table 1: Knitwear market segmentation

Consumer type

Price level


Material use

Order quantities

Luxury consumer


Very high retail prices

Highly fashionable, unique designs

Luxury materials like wool and cashmere. Complex patterns

Low order quantities

Fashion-conscious consumer


High retail prices

Styles in line with latest trends

High-quality, natural fibres and blends

Low to medium order quantities

Practical consumer


Medium retail prices

Practical, fashion-conscious designs

Medium-quality, machine washable materials like acrylic, wool and cotton

High order quantities

Price-conscious consumer


Low or extremely low retail prices

Basic and functional styles

Medium to low- quality, machine washable synthetic materials and cotton

High order quantities

Luxury consumers

High fashion consumers shop at luxury brands and retailers such as Galeries Lafayette and brands such as Missoni or Moschino. These consumers expect their knitwear to represent an exclusive brand image and the latest fashion trends. Knitwear brands in the luxury market require top-quality materials and manufacturing, the latest technical innovations and highly comfortable designs. This market is growing.

Fashion-conscious consumers

In the upper-middle market, lifestyle brands such as Marc Cain and Paul Smith cater to fashion-conscious consumers. These companies sell collections created around a brand image and natural materials and offer a good-quality product for a mid-to-high-level price. Products must have the technical look of a high-end product, but retail prices are substantially lower than in the luxury consumer market. This market is growing.

The middle market: practical consumers

Practical consumers shop in the middle market, where brands and retailers such as Minimum and Marc O’Polo sell functional and fashionable items. The focus is on washability, durability, fit and medium-quality materials. Buyers may require sustainable fabrics. Order quantities are high, retail prices low to medium. This segment is under pressure.

Price-conscious consumers

The budget market includes companies such as Primark and River Island, which cater to the price-conscious knitwear consumers. Design and technical innovation are less important, but the apparel item needs to give the impression that it is fit for its purpose and in line with the latest fashion trends. Prices are low and competition is heavy in this market segment, both in retail and manufacturing. This market is consolidating.

Through what channels does the product end up on the end-market?

Their place up the value chain determines how buyers will do business with you. Within each part of the value chain, you will find buyers of different market sizes, with different requirements regarding MOQs and price levels. Always try to find out in what part of the value chain your buyer is operating, what challenges they face in the market and how you can contribute to their sales strategy.

  • If you want to target European end consumers, try selling via platforms such as Alibaba, Wish, Amazon or Wolf & Badger for small independent brands. Most online consumers can be found in countries in Europe’s northwest. You will need to invest in a web shop, stock, order management and customer service. Your biggest challenges will be return policies and a lack of brand awareness.
  • Online multi-brand retailers such as Zalando, Asos and Yoox sell existing knitwear and other brands and often develop their own private collections, mostly value brands. They can detect market interest very fast and will immediately react upon sales data. Usually, such companies will place a small test order first. If the item is selling well, they will place the actual production order. Fast delivery is a must.
  • If you want to sell to retailers, the biggest names in knitwear are retailers such as Inditex and H&M. Next to big chains, most knitwear is sold in boutique shops that can be found in almost every European city. These shops sell existing brands, but some also order products specially developed and manufactured for them. This market level is less competitive and relatively easy to enter.
  • Apparel brands typically develop a collection 6-9 months in advance. You will need a large sample room, as brands require salesman samples (SMS) of each collection style. Every salesman sample needs to be current: meaning it must look exactly like the product will in the shop, with branded hangtags and accessories. It may take many months before orders are placed.
  • Intermediaries such as agents, traders, importers and private label companies will sell your product on to buyers up the value chain. They are extremely price focused and require flexibility in quantities and qualities. Some are located near or in the production countries and primarily do sourcing and logistics, such as Li & Fung. Others, such as Fully Fashion, work from Europe and also do market research, design and stock keeping. Their service level determines the commission rate they charge.

Figure 2: Apparel market value chain

Apparel market value chain

What is the most interesting channel for you?

As you move higher up the value chain, your margin will increase, but so will the service level that your buyer will require from you. When you have little experience with exporting to Europe, intermediaries and brands are likely the best starting point.


Agents or traders/importers/private label companies are the most adventurous type of buyer and are usually the first to investigate new sourcing destinations and factories. By working for this type of buyer, you will have access to many different buyers up the value chain, and you can learn how to service them by following their instructions.


Few European fashion brands specialise in knitwear (because it is a seasonal product), but for many brands, knitwear is a basic product group. There is usually more room for price negotiation with brands (especially in the higher market segments), but your service level also needs to be higher than what intermediaries would require from you.


Most large European fashion retailers sell knitwear collections and are used to doing business with manufacturers in developing countries. It can be very difficult to start a business relationship if you do not comply with all the mandatory requirements such buyers have. Besides delivering a good-quality product for a competitive price, your service level needs to be very high. Retailers may lack professional expertise on knitwear, so advice on product quality and development is highly appreciated.


  • Find potential buyers on the exhibitor lists of European trade fairs. Due to COVID-19, most physical trade fairs are cancelled, but many have shifted to online matchmaking. If you do plan to meet a buyer or potential buyer at an online fair, check what collections they have (research quality and hand-feel of the yarns they use) and prepare matching or improved samples. Also, work out the costing before you introduce your company and your samples to a potential buyer.
  • If you are not sure which intermediary is right for you, consider using an “agent for agents”, such as Anton Dell. Otherwise, try to find intermediaries specialised in knitwear by using an online search engine. Use keywords such as “full service”, ”garment”, ”agent” or ”knitwear” plus ”solution”. Trader’s websites usually show the brands they are working with.
  • Be on top of new technical developments in the market. Be an advisor as well as a producer to create advantages over the competition.

3. What competition do you face on the European knitwear market?

Knitwear is manufactured worldwide, so you will likely face stiff competition in this market. The most important ways to create a competitive advantage over manufacturers in other countries are: yarn sourcing, technical knowledge, product development, service level, flexibility, efficiency and beneficial trade agreements.

Which countries are you competing with?





Technical innovation, high efficiency, excellent customer service, high flexibility and the local availability of yarns and trims.

Increasing labour, transport and production costs, human rights concerns and no General Scheme of Preferences (GSP) that removes import duties to the EU.


Factories with fully automated knitting machines, specialised in cotton and wool. The country is increasingly developing added value products including cashmere. Bangladesh benefits from the GSP.

Less flexibility than in China. Although yarns are increasingly spun locally, Bangladesh still imports many materials.


Close to Europe, which results in very short lead times. The country produces high-quality knitwear in small quantities, and it has a European business culture. Turkish manufacturers will accept payment in euros.

Turkish prices are relatively high compared to Asia. Unauthorised sub-contracting may occur.


Cambodia supplies good-quality products at a competitive price level. Many factories in Cambodia have been set up by foreign investors, who also supply their expertise.

An inexperienced and relatively small workforce works against Cambodia. Social compliance concerns and political repression caused Cambodia to lose its duty-free GSP status in 2020.



India grows its own cotton and has a large industry of yarn and fabric making. India is focused on manufacturing knitwear items made from cotton and cotton blends and is highly flexible on quality, MOQ and design.

Human rights concerns in cotton, yarn and fabric production. Some dye houses may not comply with EU standards.



Vietnam’s apparel industry has developed a large capacity and a high efficiency level, thanks to investments from mainly Chinese factory owners looking to benefit from the low production costs and a new upcoming free trade agreement with the EU.

High MOQs, a lack of local spinning, accessories and trims and in general a lack of capacity (especially in the factories that operate in the north and south of the country exporting to the US).


  • Study the countries you are competing with, compare their strengths and weaknesses to yours and advertise the competitive advantages of doing business with you. Besides the GSP, consider factors such as distance to Europe, ease of doing business and transparency.
  • Check the freely accessible CSR Risk Check database to discover the social and environmental risks associated with apparel production in different countries, including your own. Use this information to mitigate risks and to advertise the advantages of sourcing from your country.
  • Check if and how other countries benefit from the Generalised Scheme of Preferences on the EU’s website on international trade.
  • Most online search engines will let you create a news alert on a topic, so you can automatically follow the latest developments in the apparel industry in a specific country.

Which companies are you competing with?

Neo-Concept is a Hong Kong-based company with a reputation of being a design-driven knitwear apparel manufacturer. The company started doing business with buyers in France such as Joseph and Agnes B and developed a reputation of being exceptional in innovation and product development. Its current manufacturing setup has expanded to Cambodia and Vietnam, enabling them to service buyers in every part of the value chain and price/quality segment.

Cobalt is a knitwear manufacturer with international offices on several continents. Inhouse spinning and manufacturing has made Cobalt 1 of the largest knitwear manufacturers in Hong Kong. The company can service a large variety of buyers.

Norban Group is 1 of the largest flat-knit manufacturers in Bangladesh with a vertical setup that includes spinning and knitting and a manufacturing capacity of 45,000 pieces per day. Its export focus is on both the United States and the EU.


  • Check the free online database Open Apparel Registry. This website lets you look up the suppliers of hundreds of European apparel companies, including knitwear brands and retailers.
  • Read the CBI study 10 Tips for Doing Business with European Buyers to learn how to approach and engage with buyers. This report also describes how you can get practical help with understanding European business culture, analysing your unique selling points (USPs) and doing business with European buyers.

Which products are you competing with?

Knitwear items such as pullovers and cardigans are a staple in many European fashion brands’ collections and end consumers’ wardrobes. This product category is growing (at the expense of woven styles) and only faces (some) competition from sweatshirts and from within the category.


Flat-knit styles are represented in the collections of almost every European fashion brand. Within this style, heavy-knit sweaters face some competition from sweatshirts (in line with the rise of comfortable loungewear and sporty styles).

Jersey T-shirts

Fine knits (gauges 14 and 16) are hard to manufacture, delicate and trend driven. They can face competition from T-shirts (including long-sleeves). A company that has a well-developed collection in basic knitwear including fine gauges is Massimo Dutti.

4. What are the prices for knitwear?

The price of your product, in fashion jargon often indicated as the free on board (FOB) price, is influenced by many factors, such as the cost of materials, the efficiency of your employees and your overhead and profit margin.

The following figure shows the average cost breakdown of a typical FOB price:

Note that these percentages may vary per factory and per order. Some factories accept lower profit margins during off-season periods or when order volumes are high. In addition, the percentages for labour versus yarns may differ, depending on the efficiency and wage level of the workforce and the price of the materials. Efficiency goes up and material prices go down when producing large volume orders.

Retail pricing

The retail price of a knitwear item is 4 to 8 times the FOB price on average, which is called retail markup. It follows that the FOB price is 12.5%–25% of the retail price of the product on average. Exceptions do exist. Retailers mark the FOB price up 4 to 8 times because they need to account for import duties, transport, rent, marketing, overhead, stock keeping, markdowns and value added tax (VAT) (15%–27% in EU countries), among other costs.

According to Eurostat’s 2019 comparison of retail prices for apparel, of the top 6 European importers of apparel and footwear, France has the highest price level at 107.7 points compared to the European average of 100, followed by the Netherlands (105.6), Italy (99.1), Germany (98.8), Spain (91.4) and the UK (90.7). Note that brands and retailers that sell in multiple European countries usually keep prices equal or deviate only slightly from the standard retail price.

Online commerce and a strong budget segment have made consumers in Europe accustomed to low prices. A focus on sustainability and higher production costs have, at the same time, put manufacturers, suppliers and buyers under enormous price pressure. Prices are expected to remain stable in the next 3 years thanks to increased efficiency, automation and production shifting to low-wage countries.

This study has been carried out on behalf of CBI by Frans Tilstra and Giovanni Beatrice for FT Journalistiek

Please review our market information disclaimer.

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If you approach a potential buyer on LinkedIn, don’t say you are the cheapest or make a generic offer. I get dozens of such messages every week. Instead study your prospect and be honest about your Unique Selling Points and your MOQs.

Willem van der Vis

Willem van der Vis, MTR Fashion Flair