MUHAMMAD ABUBAKER

BET-FA-07-001
COMPARATIVE ANALYSIS OF
APPAREL INDUSTRY BETWEEN
PAKISTAN AND CHINA
Pakistan & China Apparel
Industry

PAKISTAN 
CHINA
Strength:

Strength:


 4th largest Cotton  Italian exporters have demonstrated

a strong commitment to
producer penetrating the Chinese market.
Italy currently amounts to 17.2% of
 64% of country’s

China’s total garment and
export volume accessories import value, ranking
it first worldwide and being
 1.4 Mn people remarkably higher than other
competing countries.
employed with 50%  Chinese consumers regard Italian
in apparel garments and accessories to be
of superior design, quality and
 Low labor cost at US$ style. Italian products have top
brand images, which show the
0.39 per hour good taste and status of the
people who wear them.





PAKISTAN 
CHINA






Weakness:


• Low Price Image
Weakness:


• Lower marketing

initiatives  While Italian garments and accessories
enjoy a good reputation in the
• Limited use of modern Chinese
 market, reservations have been voiced
technology as to purchase price and promptness
of
• Confusion in political /  customer service.
 Some sales agents complain that Italian
religious scenario garment companies do not
understand the
• Low levels of managerial  distribution and sales system in China,
thus making business negotiation a
big
capabilities
 headache.
  It is not clear whether the Italian
 PAKISTAN
 

Opportunities

• Better laid down factories
on ‘best practices’
• Potential of improving
confidence in buyer by
working directly &
closely
• Home Furnishing from
Pakistan have made a big
name worldwide
• Women’s wear has a huge
potential
 
 CHINA


Opportunities
 China has been the largest garment and
accessories market in the world. The
 market has been growing at an average of
over 10% annually and is expected to
 keep up the momentum in the future.
The Chinese garment and accessories industry

is over-crowded with numerous
small manufacturers, who are competing

against one another in the low-end
 market. While in the high-end market segment,
local brands are generally still
weak in quality and design, especially in

research and development of new styles.
The demand for high-end products, on the

other hand, is increasingly growing,
 due to the rising income of Chinese
consumers, and an increasingly growing
number of white collars and the newly rich

who are concerned with quality of life,
their own personal image, and western styles

of living.

PAKISTAN CHINA


 


Threats: 

• Rising Cotton Threats:




Prices  Influenced by the global financial
disaster, the export value of garment
and
• China and India  accessories from Italy to China reduced
by 14.8% in Y2009, which could leave
being considered  more space for other foreign
competitors and domestic producers
to develop their
as countries for  business in the Chinese garment
market.
Producers are geographically scattered
high value added

throughout China, and competition in
 China is increasing as China further
garments integrates with the world economy.
Italian
 garment and accessories companies
are facing increasingly intense
• Price Pressures competition
Pakistan & China Textile &
Apparel Industry…
% Share in Global trade
World Trade Share

China, 24%
Other, 27%

Indonesia, 2% Hong Kong, 9%

Mexico, 2%
Pakistan, 2%
Taiwan, 2%
Korea, Republic Italy, 7%
of, 3% Germany, 6%
Belgium, 3%
Turkey, 4%
France, 3%

India, 3%
United States, 4%
Labour
Labour wages
wages
Labour costs still differ greatly in the reference countries and range considerably within the reference
countries. Based on industry sources we estimate the hourly average wages as follows:

Factor Cost - Labour wages including all benefits (US Cents per hour)
Cost parameter Pakistan India China Banglades Indonesia Egypt Vietnam
h

Average Labour wages 47 57 27 52 60 29

including all benefits 39

INDEX 100 120 146 70 133 154 74

Although labour costs in Pakistan are low, due to

a lower labour productivity in many mills, this
advantage is neutralized.
Source: Country data / Gherzi analysis
Pakistan Textile Exports – Major Categories
A rt Silk & Sy n.Tex Other textiles
3% 2%
Tents & C anvas
1% Raw C otton
1%
Y arn
Towels 12%
6%

Fabric s
Madeups Inc l. Bedwear 24%
21%

Ready Made Garments

K nitwear (Hosiery )
12%
18%
 Global Trade is Growing
Projections of World Textile and Apparel Trade
CAGR
Textile : 5 . 8 %
700
Apparel : 9 . 6 % 655 Bn
600
500
583 Bn
397
400 482 Bn 351
281
300

200
US$ Bn

232 258
100 201
0
2005 2008 2010

Textile Apparel

Source : ITC
Asian countries would gain in
US…
Market Share of Total Apparel for USA Market - 2010
100%
5%
11% 14%
16% Rest of the
90%
12%
World
80% 14%
SSA
11%
13%
17%
Asean
70%

14% Taiwan &

60% 12% Korea
12%
South Asia
50%
15% China & HK
18% 27% 38%
40%
Europe
5%
30% 5%
5% Canada
14% 3%
20% CBI
13%
12%
12%
10% Mexico
14% 11% 9% 6%
0%
2000 2003 2005 2010

Source: KSA
…As Well as in EU
Market Share of Total Apparel for EU - 15 Market - 2010
100%
9% 9% 8% 7%
Rest of the
90%
World
11% 12% 10%
80% 11% Romania &
Bulgaria
70% 7% 8% 9% 15% Euro Med
60% 9% 10% 13%
ASEAN
50% 25%
40% South Asia

30% 56% 54% 53% China

20%
35%
Intra EU Trade
10%

0%
2003 2004 2005 2010

Source: KSA
How we improve ourself


 Building Logistic Capabilities

 Developing long term relationships with
Clients
 Collaboratingwith buyers on forecasting
and inventory management
 Investingin IT infrastructure and
compliance
How we improve ourself


 Think Value Not Price

 Be on the Cutting Edge of Performance
 Reduce Cycle Time, Improve Flexibility
 Align With a Few Truly Strategic
Partners





thanks