Cheaper imports gain favour at the expense of locally produced goods
Melbourne, Australia (PRWEB) October 27, 2012
The Women's and Girls' Wear Manufacturing industry in Australia has performed poorly over the past five years. Increasing international pressure in the form of cheap imports has damaged the industry as tariffs have slowly reduced. Import penetration has been the major concern for the industry, yet its performance was not helped by a soft retail market due to the onset of the global financial crisis and falling consumer spending as sentiment fell dramatically. According to IBISWorld industry analyst Jeremy Edwards, “a high Australian dollar exacerbated import competition, as consumers turned to mediums such as online shopping to purchase relatively cheaper goods”. As a result, industry revenue declined by a compound annual growth rate of 6.3% over the five years through 2012-13. Conditions have begun to improve, yet declines are still evident as industry revenue dropped a further 2.8% in 2012-13 to total $602.9 million.
Low wage and capital costs in parts of Asia (particularly China) have provided companies with significant incentive to move production offshore and capture greater profit margins. “The future of the industry is less daunting, yet declines in revenue are still expected,” adds Edwards. The Australian dollar is expected to remain high over the much of the period, ebbing in 2015-16. The industry's key downstream market, women's and girls' wear retailing, is also expected to improve. Consumers are also turning to new mediums such as online shopping to purchase clothing, resulting in greater access to global markets. The industry is expected to move towards manufacturing more versatile and customisable products over the next five years, as competitive advantage lies in high value added production. In the next five years, industry revenue is expected to decline but lower than the previous period, indicating an improvement in conditions.
The Women's and Girls' Wear Manufacturing industry in Australia is characterised by a low level of market share concentration. Cue Design is the sole major player in the industry, with a low market share. The rest of the industry is comprised of small-scale operations specialising in the production of boutique goods for niche markets. The high degree of import penetration in the industry has made it exceedingly difficult for any one brand to capture significant market share, as product differentiation is hard to achieve. The industry is expected to remain at a low but increasing level of concentration, as businesses continuing to leave the industry will result in greater scope for larger market share concentration over a small industry.
For more information, visit IBISWorld’s Women's and Girls' Wear Manufacturing report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry comprises operators that manufacture women's or girls' outerwear from purchased or transferred-in materials, except waterproof clothing or clothing made from fur, leather, plastic or rubber. Firms within this industry purchase fabrics and materials from textile producers. These fabrics are then cut and sewn to produce women's and girls' outerwear apparel. Retail and wholesale firms purchase these clothing items to sell.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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