In the first quarter of 2024, as China continues to implement a combination of national macro policies, the economic performance of the apparel industry remains stable and shows a positive trend. Key indicators such as production, sales, and efficiency are steadily growing, while market vitality and business confidence are on the rise, marking a stable economic beginning for the industry. Looking ahead throughout the year, the global economy and trade are showing signs of recovery. A growing number of favorable factors are coming together. In particular, China has introduced the Action Plan to Promote Large-Scale Equipment Renewals and Trade-Ins of Consumer Goods, which will significantly boost the development of the apparel industry. However, enterprises still need to work hard to address the complexity and uncertainty of the international economic environment and actively develop new quality productive capacity to strengthen the industry’s economic recovery.

A

Production

 

According to the National Bureau of Statistics data, from January to March, the industrial added value of apparel enterprises above the designated size declined by 0.5% year-on-year, 7.1 percentage points lower than the performance of 2023. The garment production of enterprises above the designated size totaled 4.79 billion pieces, up by 1.89% year-on-year. 

Figure 1: The Growth Rate of China’s Apparel Industry Production in Q1, 2024 

 

Source: National Bureau of Statistics 

 

B

Domestic Sales

 

In the first quarter, China’s demand for apparel consumption increased steadily. This rise can be attributed to the growth in residents’ income, the adoption of new consumption patterns that blend online and offline channels, and higher spending during the Spring Festival holiday. As a result, the domestic sales market experienced consistent growth. 

According to the National Bureau of Statistics, from January to March, the total retail sales of consumer goods amounted to 273.23 billion yuan, up by 2.2% year-on-year. 

Thereinto, the retail sales of clothing by major retailers above the designated size up by 3.6%, 2 percentage points faster than the first two months. New forms of e-commerce, like live streaming and instant retailing, have greatly contributed to the growth of online shopping. The total online sales of wearable items increased by 12.1% year-on-year in the January-March period, marking a rise of 1.3 percentage points compared to 2023. 

 

Figure 2: Sales of Clothing in the Chinese market in Q1, 2024 (Above the Designated Size)   

Source: National Bureau of Statistics 

 

C

Export

 

According to the Customs Newsletters, China’s garment and accessories exports totaled US$ 33.82 billion in the first quarter, increasing 1.4% year-on-year. 

From the categories, the exports of commuter clothing like suits, casual suits, and T-shirts with higher added value maintain growth. Among them, the exports of casual suits and T-shirts surged by 33.1% and 9.9% year-on-year. 

From the main market’s perspective, China’s apparel exports to the United States and the European Union showed a positive growth rate. The decrease in clothing exports to Japan reduced, while exports to ASEAN, countries along the Belt and Road, and other emerging markets continued to grow at a faster pace. 

 

Table 1: China’s Apparel Exports by Destinations, Q1,2024 

Source: China Customs 

 

From the perspective of China’s major apparel exporters, Guangdong Province has seen a consistent decline in exports compared to the other top five exporting provinces. On the other hand, the clothing export growth rates in the other four provinces have become positive. Additionally, the central and western regions are maintaining a faster growth rate in exports. 

 

Table 2: Apparel Exports Performance of China’s Major Exporters, Q1, 2024 

Source: China Customs 

 

D

Benefit

 

According to the National Bureau of Statistics, from January to March, the main business income of apparel enterprises above the designated size totaled about 269.76 billion yuan, with a year-on-year growth of 1.37%; the total profit was 9.52 billion yuan, up by 5.69% year-on-year. The margin of operating was 3.53%, 1.54 percentage points lower than the performance of 2023. 33.13% of apparel enterprises operated in deficit, which decreased by 0.18 percentage points year-on-year. 

The turnover rate of finished products was 10.17 times/year, up 0.19% year-on-year; the turnover of accounts receivable was 6.11 times/year, seeing a year-on-year decline of 0.33%; and the total asset turnover was 1.06 times/year, down 0.02% year-on-year.

 

 Figure 3: Main Economic Indicators of China’s Apparel Industry in Q1, 2024 

 Source: National Bureau of Statistics  

 

E

Investment

 

In the first quarter, as production and sales recovered and efficiency improved, business confidence increased significantly. This growth was further boosted by the low-base factors from last year, resulting in accelerated investment growth in fixed assets within the apparel industry. 

According to the National Bureau of Statistics, from January to March, the fixed-asset investment in China’s garment industry increased by 17.5% year-on-year, 20.8 percentage points higher than the first quarter of 2023. 

 

Figure 4: Fixed-asset Investment in China’s Textile Industry, Q1, 2024

 Source: National Bureau of Statistics  

Source: CHINA TEXTILE LEADER Express