While a trend towards casualisation has given knitters an advantage over weavers in recent years, future business success will depend upon customising product quality and design and developing new applications in the technical textiles arena.
The global apparel retail landscape is evolving rapidly on the back of higher demand for better designs, trendier looks and more comfortable clothing. The consumer today is more value-conscious and expects quality apparel at affordable prices. The preference for a casual look and comfortable wearing has contributed substantially to the faster growth of knits compared with woven apparel. This trend towards casualisation will continue be the biggest growth driver for the knitting industry.
The knitting industry, being a part of the textile and apparel industry, is also moving towards geographies that offer comparative advantages in terms of low-cost manufacturing. The increasing shift of the knitting industry from Western markets to low-cost Asian destinations is substantiated by the shipments data for circular and flat-bed knitting machinery, published by International Textile Manufacturers Federation (ITMF).
Asia accounted for more than 90% of the shipments of knitting machines in 2011, followed by Eastern Europe. Data regarding the cumulative shipments of circular knitting machines, for the10-year period from 2002 to 2011, provide a better perspective on the countries that invest in knitting. China emerges as the single biggest country in terms of cumulative shipments, with a 67.8% share. The other top-ranking countries for the same period are India (4.2%), Turkey (4.1%), Bangladesh (3.7%), Brazil (2%), Indonesia (1.9%), South Korea (1.6%), and Thailand (1.2%).
The share of various countries in the total exports of knit fabrics and apparels also provides a comprehensive idea of the geographies that have a substantial presence in the knitting industry.
Undoubtedly, China is the biggest exporter of knitted fabric. Of the $27.7bn worth of knit fabric exported in 2012, China had a 34% share. While the global trade of knit fabric has grown at a CAGR of 4% from the period 2007 to 2012, the corresponding CAGR for China is 13%. Exports from South Korea, Taiwan and Turkey have also increased at a rate higher than the global CAGR in the same period. Vietnam, Thailand and India, though not among the top 10 exporters of knitted fabric, have demonstrated promising double-digit growth in the past five years, indicating their strengthening presence within the global knitting industry.
Global knit apparel trade grew from $171bn in 2007 to $212bn in 2012, at a CAGR of 4%. China had a 42% share in total apparel exports and is followed by Hong Kong, Bangladesh, Turkey, Germany, Italy, Vietnam, India, and Cambodia. The exports CAGR for Bangladesh, Vietnam and Cambodia was 18%, 17%, and 11%, respectively. This growth in exports demonstrates the growing export competitiveness of Asian countries in the global knit apparel exports market. The growth rates for China (7%) and India (6%) were higher than the global average of 4%, whereas Western countries like Turkey and Italy registered CAGRS of only -1% and 1% for the same period. Within Asia, Indonesia, Taiwan and Pakistan are the other major players in knit apparel exports.
Knit products markets can be broadly classified as markets for knit fabrics and markets for knit apparel. Asian countries that lack vertical integration depend on imports of fabrics and their subsequent conversion to apparel, for domestic consumption as well as for exports.
Key markets for knit fabrics include Vietnam, China, Cambodia, Indonesia, US, Mexico, Sri Lanka, Italy, Bangladesh and Russia. Vietnam was the biggest export market for knit fabrics in 2012 with an import value of $3.1bn. Imports into China, Cambodia and Indonesia were worth $2.4bn, $1.4bn, and $1.3bn, respectively. The knit fabrics imports of China, the US, Mexico, Sri Lanka and Italy are growing at a much slower rate than other (Asian) countries. Vietnam, Cambodia, Indonesia, Bangladesh and Russia have demonstrated double-digit, year-on-year growth from 2007 to 2012.
The key exports markets for knit apparel are the EU-27 countries, the US, Japan, Canada and the UAE. The combined share of these five geographies is about 74% of the total knit apparel imports of the world. However, these traditional markets are not growing as fast as some of the emerging nations like Russia, China, Kyrgyzstan, Chile, Brazil, etc. Growing disposable incomes, favourable demographics and increasing fashion consciousness is driving the knit apparel market in these emerging economies.
The key categories in the global knit apparel trade are jerseys, pullovers, cardigans, women’s suits, dresses, skirts, T-shirts and vests. These categories together make up 60% of the global trade in knit apparel. Women’s knit dresses and skirts recorded an impressive CAGR of 14% from 2007 to 2012.
Although circular and flat knitting technologies dominate the global knitting industry, warp knitting is also evolving. The use of warp-knit fabrics is growing in terms of technical textiles applications which cover a vast range including agriculture to home, industry, sports, packaging, building and constructions. In recent times, most innovations and technological advancements in knitting technology have been in the area of stitch bonding, multi-axial knitting and spacer fabrics knitting for composites manufacturing.
Technology deployment is gaining momentum across knitting industries. The bigger players in the industry are focusing on capitalising on precise designing and sophisticated design patterns for producing high-end, fashion-oriented products. Computer-Aided Designing (CAD) and other advanced knitting pattern design software are being deployed by industry players.
In order to make knit garments without any bulky hand-sewn seams, many players have also adopted the combination of seamless knitting and stitch-free seam welding. Seamless and welded knit apparel constructions have grown substantially in recent years as customers, retailers and brands find it beneficial to use and sell such apparel.
One of the daunting challenges faced by the knitting industry is the high shrinkage and spirality of knits. While most of the internal buyers/brands accept shrinkage of up to 3% in wovens, the allowable limit for knits is around 5-7%. Despite these higher tolerance limits, many players find it difficult to manage shrinkage in knits, so failing even the minimum of quality requirements set by reputed international brands.
Flexible structures created by the inter-looping of yarns in knits very often create challenges in their chemical processing owing to imbalances in tension and stress relaxation. On top of this, defects created in the yarn dyeing and processing stages come to notice only when the fabric is prepared. Any variation in chemical application distorts the appearance of the entire fabric; the effect is more prominent in solid colour fabrics/apparel.
Challenges related to technical parameters like shrinkage, spirality and even chemical processing require a sound understanding of machines, machine parameters and fibre characteristics. The fine-tuning of processing parameters can contribute substantially to reducing issues relating to shrinkage, spirality and chemical processing.
Another huge challenge faced by the apparel industry as a whole is the rising cost of production; the knitting industry is no exception to this. As reported by the ITMF, the total cost of producing knitted fabric from ring spun yarn has increased between 2008 and 2012 in seven of eight countries studied. These seven countries include India, Turkey, US, Brazil, Egypt, China and Italy. This increase in production cost is contributed by the increase in raw material price as well as the increase in manufacturing cost. The challenge of cost increase has to be managed by a higher focus on value-added product manufacturing and better design orientation.
At this juncture, the future of the knitting industry looks bright due to both market- and manufacturing-related growth drivers. Market-related factors like the increasing preference for casualwear and the growing demand for fast fashion products at reasonable prices, coupled with such manufacturing-related factors as relatively low capital required for setting up knitting manufacturing, the ease of modifying styles and designs, fast response time etc. are the drivers of the industry.
Although at present the EU, US and Japan remain the biggest markets for knit apparel, emerging economies like Brazil, China, India, South Africa, Indonesia and Middle East countries are emerging as high growth markets for the knitting industry.
The future of the industry’s players in these growing markets for knits will depend on their ability to customise product quality, product design and retail formats as per the specific requirements of target customers. The ability to innovate in product design and styling will determine the success of players in the fashion knit apparel segment, while, in technical textiles, the ability to innovate in terms of product quality parameters and newer applications will be the most critical success factors.
Knit fashion items are popular due to their easy-care and wrinkle-free properties. But industry players, instead of taking the growing demand and popularity in an easy and carefree manner, have to design delicately-crafted strategies to maintain a sustainable business in this competitive market.