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Chinese Manufacturing Goes Upmarket

A combination of domestic demand and a maturing market is a key driver for growth in high-end intimates in China.

SHANGHAI — Price pressures, increased domestic demand and the development of a skilled workforce have led to an increase in the production of high-end embroideries for intimate apparel in China.

Aronne Faccio grew up in the embroidery business that his mother and father started in the Sixties, and in 2001, he set out on his own from his home in Italy to Asia, a market he believed would be the next frontier in upscale embroidery production.

Back then, China’s intimate apparel manufacturing sector was almost exclusively mass market, with the highest-end European and American brands reluctant to rely on Chinese-produced materials. Now, Faccio’s factory, based just outside of Shanghai, manufactures for affluent clients such as Chantelle, Simone Pérèle and La Perla.

“China is manufacturing high-end [intimates] for European brands, much more than 10 years ago. Now the salaries are higher and the people are very specialized in the bras and panty segments. Before, they were doing a little bit of everything,” Faccio told WWD.

Just as wages and specialized skills to produce luxury lingerie have both been on the rise in China, other countries are now stepping into the mass-market category. Countries such as Myanmar and Cambodia are offering cut-price production for as little as 20 percent of the cost of manufacturing in China, luring international brands such as H&M and Victoria’s Secret.

Faccio believes the future of manufacturing lingerie in China lies in luxury goods.

“China will rely more and more on high-end products.…Let Cambodia and Myanmar take over the low end.…The competition who is doing mass market will not survive,” he commented.

Also part of the changing landscape is increasing domestic demand from Chinese consumers for upscale intimates and luxurious fabrics, laces and embroideries.

Liu Chi, head of the Intimate Clothing program at Xi’an Polytechnic University, pointed out that although the innerwear industries in the U.S. and Europe have a long history of quality-made goods, Chinese companies have steadily been narrowing the gap.

“The rapid growth of the industry is the result of a new niche market that is demanding high-end products,” explained Chi. “In China, many film stars and businesswomen require private custom-made bras for attending important occasions. The average price for these kind of bras can be more than 10,000 yuan [$1,628] each.”

Regarding embroideries, Faccio goes so far as to say the quality of the embroideries he produces in China is superior to European offerings.

“Even though we have the same machines, which cost a lot of money, you only need one person to operate the machine. But this is only one step — you also need to check the embroideries and repair any problems, and you need many people to check every centimeter of the embroidery. This you can’t have in Italy. In China, we have people who check every single centimeter,” he said.

Marie-Dominique de Fondaumiere, exhibition manager for the Shanghai Mode Lingerie trade fair, who credited a combination of domestic demand and a maturing market as a key driver for growth in the high-end arena, agreed. “Chinese manufacturers are also taking Europe’s lead and getting more involved in R&D, often with the assistance of European experts,” she said.

“By keeping production in China, but offering the services of European designers or trend offices, [Chinese manufacturers] can bring a ‘European touch’ to Chinese products,” said de Fondaumiere.