Rising Labor Costs In China, Increasing Orders For Laos Clothing Industry

It is said that the labor cost of China's garment manufacturing industry has increased by 30%, resulting in some orders shifting to countries with lower production costs, such as Laos, Thailand and Vietnam. Although the Laos clothing industry has not had any new investment this year, orders received over the past few months have increased by 15% over the same period last year.

Faced with rising labor costs, Chinese clothing

Supplement:

In addition to garment enterprises, other footwear enterprises are also generally troubled by rising costs.

Now raw materials are rising fiercely, raw materials at home and abroad are rising, clothing costs are also rising, which is a thorny problem.

A few days ago, Chen Lingmei, chairman of Shenzhen winner clothing, told the author that the company is the leader of the high-end high-end women's clothing in China.

What makes Chen Lingmei feel awkward is the rising labor cost besides raw material costs.

The author learned yesterday that in order to alleviate the cost pressure, many brands of clothing in this year have raised the sword of raising prices. At present, the retail price of brand clothing has generally risen by 10%-15%.

Some clothing companies said that the price will continue to increase in the second half of the year. Some people in the industry expect that the wholesale price of clothing products in autumn and winter will also increase by 10%-15% this year.

Collective price increase of clothing brand

Rising prices have become the mainstream of this year's clothing industry.

The author consulted the latest earnings and quarterly reports of several listed companies, and found that many clothing brands were making up the price this year.

In the field of sportswear, XTEP (01368.HK) announced semi annual report yesterday that the average selling price of footwear products increased by 6.6%, and the average selling price of clothing products increased by 13.9%.

After the price increase, the average selling price of XTEP footwear products was 85.7 yuan, and the average selling price of clothing products was 52.5 yuan.

The other two brands, Lining and Anta (02020.HK), also raised their prices in the first half of this year: among them, Anta reported that in the first half of this year, the average selling price (wholesale price) of Anta footwear increased by 2% to 96.9 yuan, and the price of clothing products increased by 7.1% to RMB 49.6 yuan.

Li Ning Co also announced in June this year that the average retail price of footwear products increased by 7.8% in the fourth quarter of this year, and the retail price of clothing products increased by 17.9%.

In the field of casual wear, Haitong Securities research materials also show that YOUNGOR launched new products in 1-5 months this year, the average price increased by 15-16%, resulting in its clothing sales increased by 4-5%, sales volume increased by about 20%, and gross profit was more than 50%.

The price increases provide a guarantee for the major garment enterprises to maintain their performance.

XTEP said its overall revenue rose 22% to 2 billion yuan in the first half of the year, 2.1 percentage point to 40.7% in gross profit margin and 2.4 percentage point to 22.2% in sales in the first half of the year.

Anta semi annual report also showed that the company's turnover increased by 22.6% to 3 billion 453 million yuan in the first half of the year, net profit rose 25% to RMB 760 million, gross margin increased 2.2% to 43.7%.

Anta explained that one of the main reasons for the increase in turnover was the increase in average selling price and sales volume.