China : Textile brand building – sure way to earn huge profits

Textile agreements with EU and the US are set to expire by the end of this year and the next year, respectively. China’s textile industry will then face new challenges that will significantly affect overall trade of the industry.

After the end of pacts, both EU and the US will most probably enforce anti-dumping and other such duties on Chinese textile imports. This will add to the existing problems of enterprises.

In 2006 China lost considerable share of its export markets to Asian countries like India, Bangladesh, Pakistan and Indonesia. This trend has continued, making theses countries tough competitors for China. Internal problems of the sector like labour issues and quality concerns create bigger obstacles.

Industry is struggling to develop strong self-owned brands, which is the main source of profits. Though, in the past one year China has persistently earned huge surplus, it does not mean huge profits.

Infact, experts explain that exporters and textile products manufacturers only take about 10 percent of profits, while the rest goes to importers and brand owners. Thus, analysts advise that the domestic traders should build brands and engage in promotional activities to make them popular. They believe that this was the sure way to make bigger profits and strengthen their foothold on international arena.