Chinese OEMs hard to replace for US firms
Bangladesh, Vietnamn still lag behind, can produce only basic apparel: expert
It will be difficult for US sportswear brands to find original equipment manufacturers (OEM) as satisfying as those in China over the short term, traders and experts told the Global Times, saying that it's important to bolster domestic sportswear brands' efforts in going global.
A representative of a trader mainly engaged in high-end sportswear OEM activity and exports to the US, based in Xiamen, East China's Fujian Province, told the Global Times Wednesday that its US clients are taking a very cautious attitude toward imports from China amid ongoing bilateral trade friction, especially since US President Donald Trump said on July 20 that he was prepared to extend tariffs on all $500 billion worth of imports from China.
“Our US clients are still placing orders with us, but they are reducing the size of the orders …” said the representative, who asked to remain anonymous.
Pan Hongyuan, secretary-general of the Fujian Shoemaking Industry Association, said most traders are alert to the potential risks. “So far, Fujian's sportswear exporters have not received any form of subsidy to tackle such risks.
“The association has also reminded related companies in Fujian to avoid the possible impact of tariffs. For example, when drawing up a contract with a US client, they must specify in advance who the responsible party will be if tariffs take effect,” Pan told the Global Times Wednesday.
“Since most of our exported products have strict functional requirements in terms of sweat absorption or waterproofing, they require sophisticated craftsmanship and advanced equipment, and those qualities can ideally be achieved in China,” the export representative said.
“The tariffs will really cause losses for both sides. If the tariffs are eventually imposed, US importers may seek OEM plants in other countries. But they would also concede it is hard to find suitable alternatives in a short period, although Vietnam is becoming
“Other sourcing countries cannot compete with China's manufacturing in sportswear and footwear.” Yang Ming, a professor at Hangzhou Normal University
their second-favorite source,” he noted.
“In Bangladesh, a simple T-shirt can be expected. But for sophisticated apparel, you cannot count on those factories,” he added.
Although China remains the US' primary source of apparel imports, its market share has been falling steadily, from a high of 39.2 percent in 2010 to 33.7 percent last year, and 29.8 percent for the first five months of 2018, the South China Morning Post reported on July 20, citing the US government data.
Yang Ming, a professor at Hangzhou Normal University, said at present, other sourcing countries cannot compete with China's manufacturing in sportswear and footwear in particular in terms of high-end and detailed products.
“Vietnam aims to win more such OEM orders with its lower labor costs, but China is still the best based on one to two decades' experience in this,” Yang told the Global Times Wednesday.
In the long run, China's sportswear makers need to restructure and upgrade from a reliance on volume to an emphasis on brands. They need to end their overreliance on the OEM mode, Yang warned, although it is likely to be a “painful” process and some
suffer threat companies will with sportswear “Compared collapse. pure less when from Chinese contractors, they players the export to tariff the “Chinese US market,” sports Pan brands like said Li-Ning, Peak and ANTA are all expanding percent of their overseas. More than 90 sales are in the domesg tic market now,” Yang said, noting there is huge scope for these companies amid the nation's manufacturing upgrade.
Sold on March 4, a special limited edition shoes of ANTA – KT3 Rocco – was released in San Francisco, wi buyers lining up for the shoes, news site jiomment emian.com reported.
ANTA refused to comment on its sales to the US amid the sensitive trade period when asked by the Global Times on Wednesday.
According to Yang, some Chinese sports brands have successfully made forays into the US, the world's leading and most masuch ture sports market, in segments as badg minton, speed boating and sward.