China continues to be the world’s largest supplier of children’s wear, with exports still achieving double-digit annual growth. Overseas shipments are expected to remain strong this year, mainly due to the elimination of all garment quotas in the EU, the country’s largest market.

What you’ll get:

 - In-depth profiles of 42 major suppliers with a comprehensive look at their product and pricing strategy, manufacturing and export capability, verified contact details, and more — this information is not available anywhere else
- Profile tables of 14 additional suppliers, with key information such as production capacities, export capabilities, primary export markets and main machinery

Executive Summary:

China’s exports of children’s wear are expected to remain strong in 2008, despite the challenges besetting the industry domestically and overseas. A key driver of optimistic projections is the lifting of the EU’s quota restrictions, which gives suppliers the opportunity to increase shipments to the region. The EU is currently the largest market for all China-made garments, accounting for nearly 25 percent of exports during the 11-month period ending November 2007.

Even as suppliers anticipate growth, however, caution tempers expansion plans for the year. Most makers are wary of increasing their capacity too much, in light of the fact that authorities in China and the EU are still jointly monitoring shipments of categories that were previously restricted. Many are worried that limits may be imposed once again in the event that exports surge.

Reports of an economic slowdown in the US are also keeping capacity increases to a minimum. The country is currently the second-largest market for China-made garments, accounting for about 21 percent of export value.

Price increases implemented in 2007 and adjustments that will be made in coming months are additional factors that suppliers believe may dampen demand. Rising production costs, a lower export tax rebate and the continued appreciation of the yuan have driven most companies to raise quotes by 5 to 10 percent in 2007 and many are projecting similar rates of increase for this year.

The following are some of the other key trends we see in the children’s wear industry of China:
• With exporting generally becoming more expensive, more makers are expected to focus on the domestic market. 
• Investment in building up capacity will revolve around upgrading existing facilities. Companies are also looking to increase subcontracting if orders in coming months exceed their existing capacity. 
• Makers will generally move higher up the value chain to obtain better margins. In line with this, branding will be a key trend, the use of technical fabric will increase and designs will also feature more functional and decorative elements. 
• To support the shift toward high-value designs and streamline operations, many companies will invest in management and production systems that are more advanced and cost efficient. Several will also try to gain better control over their cost drivers through vertical integration.

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