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Since the start of this year, rising costs have been a major concern for the apparel industry. Factors such as increased prices of raw materials like cotton and higher labor expenses have led to widespread expectations of clothing price hikes. But how are these price changes actually affecting the market today? Are consumers still buying as before, and will prices rise significantly? What are the trends in pricing across different brands?
Leading brand companies have seen their retail prices rise alongside increasing production costs and wages. These are well-established enterprises with strong brand recognition. For example, Xtep's semi-annual report showed that the average selling price of its products increased by 13.9%. Anta reported a price increase of 7.1%, bringing the average to 49.6 yuan in the first half of the year. Li Ning announced a 17.9% retail price increase for the fourth quarter, while Youngor stated that new product lines would see an average price rise of 15–16%. These figures reflect the broader trend among top-tier brands.
For these established brands, price increases don’t seem to be a major issue. Their customer base tends to prioritize quality, brand loyalty, and emotional value over price sensitivity. As a result, they can pass on cost increases without significantly affecting sales.
On the export front, the first half of the year saw a notable profit boost, driven by strong demand and improved margins. Export performance was particularly strong for knitted garments and fabrics. There was even a “price and volume†growth trend: from January to June 2010, the average export price of knitted garments rose to $2.52 per piece, up 6.33% year-on-year. Wool knitted garments saw an even steeper increase, with an average price of $5.96 per piece in June, a 27.08% rise compared to the same period last year.
However, many export-oriented companies are struggling with rising costs. While prices have gone up, their profit margins have shrunk due to pressure from raw material and labor expenses.
For smaller domestic companies, especially those without a strong brand presence, raising prices is not an option. Many SMEs have stated they won’t increase prices and will keep them similar to last year. This is especially true in the wholesale market, where unbranded or small-label clothing is often sold at stable prices. These businesses are forced to absorb the rising costs by cutting their own profits.
One wholesaler shared, “We’re being pushed to raise prices due to rising costs, but we’re afraid it’ll scare off retailers and customers. The only choice is to cut costs.†Unlike larger manufacturers, who can more easily pass on costs to consumers, smaller players are left with little room to maneuver.
According to industry experts, some companies are trying to reduce costs by simplifying production processes, using cheaper materials, or producing simpler styles. However, not all companies are equally equipped to handle these pressures. Smaller firms may find it harder to survive under these conditions.
In conclusion, the apparel industry is experiencing a complex shift in pricing dynamics. While leading brands can maintain stability through brand equity, smaller players are struggling to keep up. Merchants should assess their own situations carefully and adapt accordingly to navigate the current market environment.