Newsletter: November 2004  

Malaysian Share in the USA Apparel Market

The United States of America is one of the largest consumer markets for apparel. Over 290 million consumers spend a sizable portion or their income on apparel and related products. In 2003, the US Office of Textile and Apparel announced total apparel imports reaching US$55 billion. The USA imported US$29.7 billion worth of knit apparel and woven apparel valued at US$33.2 billion in 2003. Apparel was among the USA’s top ten imports from Malaysia, with knit apparel ranked fourth at US$410.7 million and woven apparel, worth US$293.14 million, ranked seventh. 

Knit Apparel accounted for 1.6% of Malaysia’s total exports to the USA in 2003. Malaysia’s top exports of knit apparel were sweaters, pullovers and vests, women’s or girl’s suits and baby garments and accessories. Malaysia was 23^rd largest supplier of knit apparel to the USA in 2003. 

Woven Apparel represented 1.2% of the USA’s imports from Malaysia. The USA’s imported US$33.2 billion of woven apparel in 2003 recording a growth of 7.3%. Malaysia’s export of woven apparel was US$293.14 million, comprising mainly men’s or boys’ shirts, suits and overcoats, women’s or girls’ blouses and suits.

Consumer Trends
As consumers in the USA are becoming increasingly discerning, they are very much aware of the ratio between quality and price. They will pay more for a product or brand that is perceived as being stylish or of high quality, while saving money on other products. Consumers are rapidly embracing the cross-shopping experience, a label given to the trend that sees consumers, for example, purchasing branded handbags while buying discounted t-shirts from department stores.

Consumers in the USA are also buying dress down, casual apparel for all occasions. As such, Malaysian manufacturers entering the USA should consider a number of options, for example, manufacturers of men’s formal suits should consider other product categories. Given that consumers are also brand-conscious, spin-off clothing categories can reflect some of the prestige associated with the original brand.

The growth of the large size market in the USA should also be taken into account. There is increasing demand for oversized apparel in the market. As such, the more size groups a company is capable of producing, the larger the potential number of buyers.

The USA Sourcing Market
Retailer in the USA and their private brands, are increasingly sourcing the production of their apparel overseas. There are a number of potential market sectors for Malaysian apparel firms.

The group referred to as branded merchandisers, or marketing firms, are firms that conduct product design, research and development, sourcing, quality control and advertising. They do not own any apparel manufacturing facilities, but instead source their apparel form all over the world, the five major umbrella firms in this segment are Kelwood Co., Jones Apparel Group, Phillips-Van Heusen Corp., Liz Claiborn, Inc. and V.F Corp.

Apparel made for retailers of private label merchandise today accounts for over 36% of the total market. Private labels are brands created for a specific store. As retailers seek differentiation, private labelling has come to encompass not just basic apparel groups but niche, fashion and value-added categories as well. Among the categories of retailers selling private label apparel are national specialty chains, department stores and buying offices, catalogue firms, mass merchants, retail clubs and outlet stores.

Other potential market sectors are private label development companies that work with major retailers and chains in product development and sourcing, overseas buying offices and speciality clients.

Staying in the US market
With the dismantling of textile quotas in January 2005, Malaysian exports will face stiff competition from low cost producers in Asia. Malaysia textile companies should focus on building niche and specialty markets to cope with the competition.

When it comes to sourcing apparel, there are a number of factors that companies in the USA take into account. Price is an important consideration. Timing is also an important factor, as retailers seek to source fabrics and trims as quickly as possible.

For exporters, a good way of ensuring continued business is to form trading groups or clusters within a region. This allows a variety of service providers and manufacturers based in the same area or sector to offer a full package service to retailers. It is also prudent to monitor the regions where firms from the USA are sourcing and to learn about competing companies.

In order to sustain market share, Malaysian exporters should venture into higher-end apparel, as well as pursue brand building, advertising and participate in promotional activities including trade shows and exhibitions.

Source : Matrade

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