The industry has been waiting for some good news – and they got it at SPINEXPO Hong Kong. After a very difficult 2022, most spinners felt that things were finally turning the corner in 2023. This wasn’t just ‘beginning of the year optimism’ – the way everyone feels when they have an entire year ahead to meet sales targets.
Leading spinners said that orders were starting to pick up.
“I just spoke with the head of knitwear at Asda’s George brand and he told me that knitwear sales were up 150% percent,” said Mark Snape at Xinfang.
“Business is definitely getting better,” said Peja Yang at Xinao. “Buyers are now looking for something special, with more potential,” added Felicity Lee.
Even those whose sales were still slow felt that 2023 would see a recovery. “At least now we are not talking about Covid anymore,” said Sophia Hu at Esen, part of the GTIG group.
Ready for a Rebound
It was clear that there is a new energy flowing through the industry – or at least the knitwear sector.
SPINEXPO Hong Kong was buzzing with activity. Brands were eager to find new products and were particularly happy to see a wide range of innovative yarns and knitwear in close proximity to their offices.
“SPINEXPO is the ‘It’ fair for knits,” said Sabrina Lee at Loyal Light. “Sourcing offices came here looking for something new.”
“It’s been very, very busy. Ridiculously busy, on both days,” said Mark Snape. “People are really eager to find new things.”
“I’m not normally optimistic, but all the signs are there: Interest is high. More orders are being placed. Everyone seems more energetic.”
Smaller Orders, Short Leads
While enthusiasm is gaining momentum, spinners say that order sizes are well below 2019 levels.
Most spinners said that orders were about 20-30% smaller than pre-pandemic levels, with some reporting as much as 50% reduction in order size.
“More clients are placing trial orders. Buyers are still very cautious.”, said Stanley Ma at Regal.
“Order sizes are a lot smaller now as brands are still trying to clear old stock. We’re also seeing orders being placed a lot closer to the season,” said Sophia Hu.
“There’s still a lot of uncertainty in the market. Order sizes are down about 25-30%. Buyers are being careful,” said Mark Snape.
Sustainability Drives Sales
New, stricter regulations around sustainability and, more recently transparency and traceability, are pressuring brands to look for materials that can meet these standards.
Almost every spinner said that buyers were asking for yarns that had some sustainable touchpoint – and ideally were backed up with certifications.
“There’s more demand for sustainable products and we’ve invested very heavily in recycling and upcycling,” said Julie Wilkens at Novetex. The company’s Hong Kong-based Billie recycling facility is a pioneer in garments.
“We launched Billie in 2019 but now it is gaining a lot of interest,” said Vince Ho. “We can customize the fiber content of any of our upcycled yarns to meet the customers’ requirements.”
To further both its recycling program and its virgin fiber yarn program, Novetex has created a state-of-the-art Meta space that allows buyers to interact with yarns and create 3D garments that look remarkably realistic.
In addition to yarns made with some recycled fiber content, there was also a demand for natural fibers.
“We are getting a lot of requests for both sustainable and functional yarns. Buyers also want more natural fibers,” said Peja Yang, adding that his linen/wool yarns and merino/cotton yarns were getting a good reaction for spring/summer 2024.
Esen also said that yarns with responsibly sourced wool (RWS) and cotton were in demand.
“Sustainable and traceable products are very big now. Recycled nylon/wool blends are popular for fall 2023. For spring/summer 2024 we’re seeing demand for cotton, viscose and linen – but cotton is the most requested,” said Yvonne Pong.
Putting More Pressure on Price
With inflation still at relatively high levels in key export markets, brands were looking to bring products in at lower prices.
“Buyers are looking for cheaper yarns. Price is the main concern right now,” said Yvonne Pong at Zhong Ding.
“One of our bestsellers is a cashmere-like yarn. It’s 100% polyester but it feels just like cashmere and costs $4/lb.,” said Sabrina Lee.
“Customers are pushing hard on price. We need to source cheaper materials but maintain the hand feel,” added Sophia Hu.
The Road to Recovery
While most spinners agree that business is not likely to be back to where it was in the ‘good old days’, there is demand and opportunities for those who have the right products.
“It’s about adapting to the market. It’s not what you are able to produce – it’s being able to understand what’s selling. You need to be able to match the market,” said Sabrina Lee, noting that sales at Loyal Light were up 20% in 2022.
“Overall, business is not bad. It’s not as good as pre-pandemic, but is it not as bad as what we had been hearing,” added Mark Snape.
