Since the start of this year, rising costs have become a major concern for the apparel industry. Factors such as increased raw material prices—especially cotton—and higher labor expenses have led to widespread expectations of clothing price hikes. But how are these price changes actually affecting the market? Are consumers still buying as before, and is a significant price increase on the horizon? What trends are emerging across different brands in the fashion sector?
Leading brand companies, which include well-established, large and medium-sized enterprises with strong brand recognition, have seen their retail prices rise in line with increasing production costs. For example, Xtep’s semi-annual report revealed a 13.9% increase in average selling price for its products. Anta reported a price increase of 7.1%, bringing the average cost to 49.6 yuan per item in the first half of the year. Li Ning also announced a 17.9% rise in retail prices for its fourth-quarter products, while Youngor stated that new product lines this year would carry a 15–16% price increase.
For these top-tier brands, price increases don’t seem to be deterring sales. Their customer base tends to prioritize quality, brand loyalty, and emotional value over price sensitivity. As a result, they can absorb cost increases more easily and maintain stable demand.
On the export front, the first half of the year brought positive results. The Chinese garment industry saw improved profits, driven by strong export performance. Knitted garments and fabrics continued to show robust growth. There was even a trend of “mass and price increases,†with the average export price of knitted garments reaching $2.52 per piece from January to June 2024—a 6.33% rise compared to the same period last year. Wool knitwear, in particular, saw a sharp increase, with an average price of $5.96 per piece in June, up 27.08% year-on-year.
However, many export-oriented companies say that while prices have gone up, profit margins have not kept pace. Rising costs of materials and labor have squeezed their earnings, making it difficult to sustain profitability despite higher selling prices.
Domestic small and medium-sized enterprises (SMEs), especially those without strong brand presence, are under even greater pressure. These companies are hesitant to raise prices, as they fear losing customers. Many have stated clearly: “We won’t be raising prices; our prices are almost the same as last year.†This is particularly evident in the wholesale market, where unbranded or small-label clothing is being sold at similar prices to previous years, with little sign of inflation.
A wholesaler noted, “Manufacturers are forced to raise prices due to cost pressures, but we’re worried that increasing prices might scare off retailers and end consumers. We have no choice but to cut costs.†He added that larger companies have more flexibility to pass on costs to consumers, while smaller players struggle to keep up.
According to industry experts, some manufacturers are trying to reduce costs by simplifying production processes, using cheaper materials, or producing more basic styles. However, not all companies are equally capable of absorbing these changes. Smaller firms, in particular, face challenges in maintaining profitability amid rising costs.
In conclusion, the apparel industry is experiencing a complex landscape of price fluctuations, with different segments reacting in unique ways. While leading brands can manage cost increases with relative ease, SMEs and exporters are under more pressure. Merchants and businesses must assess their own situations and adapt accordingly to navigate this evolving environment.
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