SHANGHAI — After several years of upheaval in the world cotton market, Cotton USA is looking to Chinese consumers for renewed growth.
The recently rebranded international division of the National Cotton Council of America — formerly known as Cotton Council International and a related organization to Cotton Incorporated — has a new name and a fresh marketing campaign aimed at educating Chinese shoppers about the benefits of the world’s most popular natural fiber.
Though some major Chinese clothing brands, including Dazzle, Septwolves and Goodbaby, use American cotton, the mission for Cotton USA is to influence more brands to get on board.
“We do research on the middle class in China — right now there’s 300 million middle class in China,” said Karin Malmstrom, Cotton USA China and Northeast Asia director. “By 2025, it’s going to double.”
Malmstrom said, “We know from our research that people are prepared to pay more for natural fibers. Hands down, natural fibers are the number-one choice, so we feel as though we are in a very strong position.”
The boost is badly needed, especially for the U.S. industry, which has struggled since the global financial crisis in 2008 collided with price rises that encouraged more manufacturers to work with generally cheaper, synthetic fibers.
Last year, cotton proved one of 2014’s worst performing agricultural commodities, with benchmark New York futures falling 29 percent to their weakest year-end level since 2008.
Once the largest importers of cotton to China by a large margin, the U.S. has been overtaken by India and is neck and neck with Australia, with both countries capturing about 20 percent of China’s import market, according to figures from the U.S. Department of Agriculture.
U.S. production estimates are up in 2015, countering a drop in production from China, with the government here keeping the industry on tenterhooks as it switches from a government-mandated stockpiling policy to a direct-subsidy pilot program in the northwestern province of Xinjiang, China’s largest cotton-producing region.
“They ended up with almost 70 percent of the world’s cotton in China’s reserves, nearly 11 million tons,” Malmstrom said. “That set off a huge imbalance in the world’s cotton supply. If you look at the world’s cotton supply ex China, it looks pretty normal, actually pretty tight, so the world has been dealing with that.”
Meanwhile, the Chinese growth that is propelling hundreds of millions of people into the middle class has created pollution and product safety crises, refocusing public attention on the importance of clean, safe and natural consumer goods.
This trend could help the cotton industry, as it seeks to differentiate itself as a natural, biodegradable and green alternative to synthetics.
But it’s also set to help U.S. cotton in particular, as Cotton USA educates Chinese consumers through direct campaigns utilizing the country’s social media infrastructure about the difference between American cotton and its competitors from China, or other rising suppliers, such as India.
“We need to reach out to the consumer to educate them, not just about cotton in general, but about Cotton USA, because every country has a difference,” Malmstrom added. “We have nationwide standards, we are systemized. …It’s very uniform, so you know what you’re getting all the way back to the farm.”
Malstrom sees Cotton USA’s job in China to act more as an educator, as well as a connector, reaching out to customers more directly with their “Love My Cotton” campaign, which will showcase cotton fashions on social media platforms, then will point consumers to e-commerce, or brick and mortar retailers where they can purchase the featured products.
“This will become the largest consumer market for our target audience, that is, the people caring about their lifestyle and their health. They want to be informed and we can share information with them,” she said.
“We don’t have a crystal ball about import/export policy; we just don’t. So we’re doing something we can do. That’s in our control. Also, just more awareness for cotton, taking a closer look at what we can offer down to retail as Cotton USA and what that means as part of a fashionable and healthy lifestyle. That’s our direction.”