Which countries are the best alternative to China for outerwear production?

Alternatives to Chinese outerwear production

The apparel sector is always changing because of consumer and supply developments. Placing orders in China, especially for coats and jackets, is currently challenging. The reasons are previous COVID-19 lockdowns and the closure of factories due to environmental regulations. Other reasons include the delay in material deliveries and higher costs for fabrics and shipping. So, European buyers are looking for alternative countries for outerwear production.

Coats and jackets from China

For a long time, China primarily made coats and jackets for the European market. In recent years, European companies have found alternatives to China for other clothing categories. But, few countries can produce outerwear like China does, as the country makes its own fabrics and hardware. Also, factories in China have the technical expertise to produce high-quality coats and jackets for competitive prices.

European demand

European buyers are now looking for alternatives to China for outerwear production. This is because Chinese suppliers cannot keep up with demand right now. Chinese factories may not take on new orders, especially not smaller, complicated orders. This is partially due to the closure of factories in recent years to reduce environmental pollution. Another reason is the quick recovery of European consumer demand for outerwear after the COVID-19 pandemic.

"The market for coats and jackets is currently a sellers' market. Demand is bigger than supply. This creates an opportunity for manufacturers that can offer good quality and flexibility," says Pieter van der Gaast, a buyer and sales expert at PG Fashion. So, what opportunities are there for producing countries?

Factories outside of China

Countries such as Bangladesh, Vietnam and Myanmar meet a part of the increased European demand. So do newcomers Rwanda and Ethiopia. Chinese manufacturers have set up many outerwear factories in these countries. The manufacturers want to benefit from the Generalised Scheme of Preferences (GSP) trade deals these countries have with the European Union (EU). China supplies these factories with machinery, skills training, fabrics and hardware.

Production near Europe

For other product categories, European buyers have moved production back to Europe and surrounding countries such as Türkiye, Morocco and Tunisia. Production nearby reduces transportation time and costs and is more flexible. These countries have already started producing simple outerwear styles.

Opportunities for producing countries

The skills to make complicated and padded winter jackets are not yet available in nearby countries. But, these skills can be developed with the help of Chinese investments. Chinese investments are also necessary for fabrics and trims. There are opportunities for manufacturers to move into the outerwear market through collaboration with Chinese manufacturers. Pink Mango in Rwanda is a good example. It is 50% Chinese and 50% Rwandese-owned. Pink Mango started in 2019. Since then, the company has created 4,300 jobs for people producing outerwear in Rwanda.

Besides this, many alternatives to China are complicated. Bangladesh hardly accepts orders of less than 5,000 pieces. Such minimum order quantities are too large for many European companies. Myanmar is also no longer an option for many European companies due to a military coup in 2021. And many European buyers do not have much experience with African countries.

Learn more

Would you like to learn more about the opportunities for outerwear apparel in the European market? Read this CBI study on coats, jackets and blazers.

Giovanni Beatrice and Frans Tilstra from FT Journalistiek wrote this news article for CBI.

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