Since the start of this year, rising costs have been a major concern for the apparel industry. With increasing prices for raw materials like cotton and higher labor expenses, many have anticipated a significant rise in clothing prices. But how accurate are these predictions? Are consumers still buying as before, and what exactly is happening with price trends across different brands?
Leading brand companies have already seen their retail prices go up in line with rising production costs. These are large and medium-sized enterprises with strong brand recognition. For example, Xtep reported a 13.9% increase in average selling price in its semi-annual report, while Anta saw a range from 7.1% to 49.6 yuan. Li Ning announced a 17.9% increase in fourth-quarter retail prices, and Youngor said new product prices would rise by 15–16%. These increases reflect the pressure on established brands to pass on costs to consumers.
For these dominant brands, price hikes haven’t significantly impacted 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 without losing market share.
On the export front, the first half of the year brought a boost in profits due to strong demand. Knitted garments and fabrics saw continued growth in exports. Notably, the average export price of knitted garments rose by 6.33% year-on-year, reaching $2.52 per item. Wool knitwear even saw a 27.08% increase in June alone, reaching $5.96 per piece.
However, many export-oriented companies face a different reality. While prices have gone up, profit margins have not kept pace. Rising material and labor costs continue to squeeze their earnings, making it difficult to maintain profitability despite higher selling prices.
In contrast, domestic SMEs are struggling to raise prices. Many small and medium-sized manufacturers lack brand recognition and cannot afford to increase prices without risking sales. In fact, some have stated that prices remain nearly the same as last year. This trend is especially visible in the wholesale market, where unbranded or small-brand clothing is often sold at stable prices.
One wholesaler shared, “We’re forced to raise prices due to cost pressures, but we’re afraid that doing so will scare off retailers and customers. We have no choice but to cut costs wherever possible.†Unlike larger brands, smaller players don’t have the same flexibility to shift costs onto consumers.
Industry experts suggest that garment companies can reduce costs by simplifying production processes, using cheaper materials, or designing simpler styles. However, not all companies are equally equipped to handle these challenges. Smaller firms often find it harder to absorb rising costs, leaving them vulnerable in a competitive market.
As the industry continues to evolve, businesses must adapt strategically to navigate the current economic landscape. Whether through pricing adjustments, operational efficiency, or brand positioning, the key is to stay agile and responsive to changing conditions.
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