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The main features of the German textile and garment industry
Jun 26, 2018

1. Production globalization layout. In order to reduce production costs, German companies have seized the opportunity of economic globalization and transferred production bases to other countries where raw materials and other costs are relatively low. In recent years, due to rising labor costs in China, India and other Asian countries, some German companies have relocated their factories to Poland, Bulgaria, Hungary, and Turkey. In addition to production costs, the convenience and controllability of transportation costs and quality monitoring are also considerations for garment companies. Therefore, in the context of comparable labor costs, Eastern European countries have more advantages than distant Asia.

2. Focus on the research and development of new products and new technologies. German textile and apparel companies invest hundreds of millions of euros each year for the development of new products or new technologies. In 2014, 32% of companies invested in research and development, 19% of companies carried out new or new technology research and development for three consecutive years, and sales of new products accounted for 18.5% of total sales. Through research and development of new technologies, production costs have been effectively controlled and reduced. In 2014, the cost of the textile industry decreased by 1.3%, and the production costs of apparel and leather companies decreased by 2.9%.

3. The export rate of textile and apparel products is relatively high. Germany is the world’s fourth largest exporter of textile and apparel products after China, India and Italy. In 2015, 49.1% of textiles and 37.3% of apparel products were exported to Germany. Because of its strong ability to innovate, Germany’s brands and designs are highly influential in the world and are very popular among consumers.

4. The network and stores are the main sales channels. With the rise of e-commerce, the German consumer shopping habits have undergone tremendous changes. In the third quarter of 2016, the transaction volume of the German e-commerce industry amounted to 12.5 billion euros, while apparel sales accounted for the largest proportion, accounting for 22.4% of the total sales. Experts predict that by 2017, network sales of textile and apparel products will increase by 50%. In addition to online sales, store sales in the vertical business model are also major distribution channels. More and more garment manufacturers have stepped up their efforts in laying retail outlets to display and promote products and brands as much as possible to win more users.

5. The textile and clothing industries face very different market prospects. In the textile industry, Germany has successfully changed the economic growth mode of the industry by developing functional and intelligent textiles, improving the quality of textile products, and increasing the added value of products. German textile companies take full advantage of technological innovation, management, marketing and brand advantage to occupy the mid-to-high end market.

Unlike the thriving textile industry, the development of the German apparel industry has been declining.

6. Industrial technological textiles and "smart textiles" lead the German textile and garment industry.

The prosperity of the German textile industry is largely due to the success of industrial high-tech textiles. In 2015, the sales of industrial high-tech textiles grew strongly by 14.4%, and sales accounted for nearly 50% of the overall sales of the textile industry. Industrial high-tech textiles are textiles that have been specifically designed and characterized by engineering structures. They are widely used in medical and health care, construction, transportation, aerospace, and new energy sources. Germany's industrial textiles manufacturing level has been at the leading level in the world. The biennial German high-tech textile exhibition in Frankfurt is the world's largest industrial textiles exhibition.

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