Export Marketing Survey: German Market for Textile and Clothing

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This Project is financed by the European Union Support to Export Promotion and Investment Attraction in the Republic of Moldova EuropeAid/126810/C/SER/MD This Project is implemented by a Consortium led by GFA Consulting Group Market actors and retail Market access requirements Moldovan export opportunities and constraints that the clothing export quota has increased from 10% in 1970 to 44% nowadays. German apparel brands, in particular, have a strong potential in the growing markets such as Asia or Eastern Europe. Exports by Germany include to a big extends so called re‐exports – imported products, which are exported to other countries, mainly EU. It is estimated that about 35% of German clothing imports are re‐exported. The traditional functions of the different market actors are changing. There is the general trend of integration in the value chain, which means: • Forward Integration: more and more manufactures open their own brand stores (mono‐label) in order to control the point of sale (higher margins, better knowledge of consumer demand) • Backward Integration: retailers set‐up their own design departments and source supply with own buying departments or agents With regard to the retail business textile discounters and the non‐specialists (hypermarkets with strong non‐food component) as well as mono‐label stores have shown a remarkable growth. Also globally operating apparel retail chains like H&M or Zara have enlarged their market share. In turn the formerly strong independent retailers as well as the department stores have declined strongly. There are legislative (set by the EU and national government) and non‐legislative (set by the trading partner) market access requirements. With regard to outerwear these requirements are based on environmental, consumer health and safety, as well as on social concerns. There is no quality standard for clothing. Opportunities for Moldova include: • Proximity to EU market which allows to benefit from the Fast Fashion trend • Upgrading within the textile value chain, using income and contacts gained from contract work: from CMT to value added production • Explore niche markets, e.g. work with own agents on commission Obstacles Moldova face: • Limited investment capacity to upgrade production • Limitation of labour force and absence of design capacity • Missing business skills and contacts (e.g. sourcing) to upgrade within the value chain • Lack of sector support structure: efficient association, fashion centre and competence centre 4
This Project is financed by the European Union Support to Export Promotion and Investment Attraction in the Republic of Moldova EuropeAid/126810/C/SER/MD This Project is implemented by a Consortium led by GFA Consulting Group 3 OVERVIEW OF THE GERMAN TEXTILE AND CLOTHING MARKET The following pages provide an overview of the German market for textile and apparel, focussing on clothing. The pattern and trends in consumption are outlined, as well as the business and strategies of the German clothing companies. 3.1 PRODUCTION Outline of the textile and clothing sector The German textile and clothing industry, characterised by mid‐sized companies, is the second largest consumer goods industry only excelled by the food and beverage industry. The turnover amounted to 19.2 billion € in 2008, with textile production accounting for approximately 58%, and clothing for 42% of the total. Basic Data of the German Textile & Clothing Industry Turnover (in Mio. €) Production (in Mio. €) Imports (in Mio. €) Exports (in Mio. €) Employees (number) 2000 2006 2007 2008 Change 2007 to 2008 26.409 19.742 19.949 19.169 ‐3,9% 16.375 12.820 12.863 12.213 ‐5,1% 31.730 30.864 31.721 30.398 ‐4,2% 18.943 21.395 22.618 21.833 ‐3,5% 185.195 104.299 102.020 97.026 ‐4,9% Source: German Ministry of Economy, “Branchenfokus Textil und Bekleidung”, 2010 In 2008 both, the textile and the clothing industry, recorded a decrease in production, turnover, employment and number of companies: Decrease in production, turnover, employment and number of companies Textile industry 2007 2008 Change 2007 to 2008 Production (in billion €) 11.2 10.8 ‐3,4% Turnover (in billion €) 11.6 11.1 ‐4,5% Employees 68.152 65.155 ‐4,6% Number of companies 496 481 ‐3,2% Clothing industry Production (in billion €) 1.63 1.4 ‐16,5% Turnover (in billion €) 8.35 8.1 ‐3,1% Employees 33.624 31.871 ‐5,5% Number of companies 207 201 ‐2,9% Source: German Ministry of Economy, “Branchenfokus Textil und Bekleidung”, 2010 5
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