Market Analysis for Textile and Apparel Mauritius is not exporting much of its textile products to Malawi. There is a niche market to tap despite the strong presence of second-hand clothing characterising the Malawian textile and clothing market. “Kaunjika” is the Malawian name given to second-hand clothing market targeting the mass. Size of Market USD Thousand Malawi's Imports of Main Textile and Apparel items - 2012 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 HS 52 Cotton HS 53 HS 54 HS 55 HS 56 HS 61 Vegetable Manmade Manmade Wadding, Articles of textile fibres filaments staple fibres felt, apparel, nes, paper nonwovens, accessories, yarn, woven yarns, twine, knit or fabric cordage, etc crochet Product categories Source: Trademap In 2012, Malawi’s imports of main textile and apparel products stood at USD 31 million with manmade staple fibres category accounting for a large proportion of USD 19.3 million, followed by articles of apparel at USD 3.1 million and cotton products at USD 3.0 million. Swot Analysis for Textile and Clothing Market Strengths of Mauritian products Opportunities for Mauritian Exporters Good image of Mauritian High demand for value added products products among key players High demand for kidswear, printed High quality Competitive price Niche market for branded products Duty free (COMESA/SADC) High potential to invest in Malawi’s shirts, polo shirts, etc. cotton production, spinning and finishing processes. Weaknesses of Malawian market A devalued currency Low purchasing power and low disposable income Prohibitive freight costs Inadequate supply of foreign exchange. Threats for Mauritian products Second hand clothing – (imports from US and Europe) Competition from South Africa, China, Dubai, Turkey and India Imitation of popular brands e.g Lacoste, etc. Sourcing Markets The main sourcing markets for Malawian Textile and Clothing industry are: China Thailand India South Africa Demand Analysis – Key Importers The market for textile and apparel can be segmented as follows: Fully owned South African subsidiaries incorporated in Malawi – big players Local Malawian companies (small to medium size). The decision making process of South African companies in Malawi is centralised at the head office based in Johannesburg/Pretoria/Cape Town. The major Malawian importers for textile and apparel are: 1. T-Shirts, Polo Shirts, Blouses, Shirts and Jeans – Mr Price, Pep Stores and Dapp 2. Kidswear and Babywear – White Rose, Kidsworld, Pep Stores and Dapp 3. Lingerie and Swimwear – Pep Stores, Mr Price and Game Stores. South African Stores Segment PEPco Malawi PEP is a South African company based in Cape Town with presence in Malawi, Mozambique, Zambia, Angola, Zimbabwe and Nigeria. In Malawi, the group has 22 retail garments stores. It has a central procurement system with sourcing mainly from Cape Town. PEPco Malawi may source from local Malawian companies if some product lines are more competitive. Mauritian companies may target the retail stores by appointing a local agent. PEP group is already sourcing textile garments from Mauritius. Local Importers Segment White Rose White Rose is a retail shop which sells a wide range of garments. The company currently imports from Dubai. It used to source from China but has ceased due to the long leadtime involved. With a view to explore the potential for exporting textile and apparel products to Malawi, a meeting was arranged with Ms Patel of White Rose. She was of the view that the market is currently invaded by second hand clothing from the USA. The lower segment of the market which cannot afford buying in retail shops has the choice of always buying second-hand clothes from the informal market (Kaunjika market). The samples were rated as good quality but expensive though. A three-piece set is sold at USD 5.20 while a similar set from a Mauritian Manufacturer is sold at USD 3.25 fob. Moreover, she claimed that Malawian consumers look for fancy clothes with embroidery, print and so on. Ms Patel stated that she has clothes which have been in the shop for more than a year. Hence, she is not interested to import from Mauritius given the high price and the fact that she is unable to clear the present stock. Devraj Store According to Mr Savjani, the Director, the company is currently sourcing from India, Thailand and Turkey. Upon presentation of the samples, Mr Savjani found the Jeans to be of good quality and suitable designs. He further mentioned that retail price for high quality jeans ranges between USD 50-60. It is to be pointed out that the company usually imports 400 pair of Jeans on a monthly basis and he has expressed interest in sourcing Jeans from Mauritius. Product Analysis – Mauritian Samples Samples presented to the various textile companies are: Denim garments T Shirt (short and long sleeves) Ladies top Kidswear Polo Lingerie and Swimwear. OPPORTUNITY MATRIX: TEXTILE AND APPAREL We have mapped out the feedback gathered on market growth and trend from importers and the potential of Mauritian products to compete on the Malawian market below: MARKET GROWTH High Swimwear Long Sleeves Shirts Lingerie Kidswear T-shirts Polo Shirts Ladies Blouse Low Jeans MARKET POTENTIAL Low High It can be concluded that Kidswear, T-Shirts, Polo shirts and Ladies Blouse have high potential to penetrate Malawi and the market is expected to grow. On the other hand, swimwear, long sleeves shirts and lingerie have low potential to penetrate the market, demand being very low and not expected to increase in the future. Swimwear Being a landlocked country, Malawi does not attract demand for beachwear attire naturally. However, beachwear products can be marketed in hotels’ textile boutiques and a few upmarket shops in the cities. The potential to penetrate Malawi can be described as low. T-Shirts In general, T Shirts marketed in Malawi are of average quality compared to the Mauritian samples. There is definitely scope for good demand for T-Shirts in Malawi. However, the present constraint put forward by Malawian businessmen is that the price of trend clothing is not competitive for the Mauritian products despite its premium quality. According to the businessmen, the fob prices for short sleeves t-shirts if proposed at less than USD 4, stand a better chance to penetrate the Malawian market relative to the imported garments from China, India and Bangladesh, which are of average quality. It is worth noting that marketing strategy will have to lay emphasis on quality/cost combination. Long sleeves T-Shirts have absolutely no market potential, on account of the warm climate. T-shirts with print have good potential. Surprisingly although the mass market looks for low price T Shirts, a good percentage is ready to pay a premium for higher quality. Denim Garments Mauritian Denim products are described to be of high quality. However, these products, according to Malawian businessmen, are largely meant for the upmarket with a proposed fob price of less than USD 12. Mass market usually consumes denim products at less than USD 10. Kidswear Babieswear and kidswear sourced from Mauritius are of very good quality compared to what are presently available on the market. Even the prices are relatively competitive. Good market potential for babieswear and kidswear is definitely present, with fob prices ranging between USD 3.15 to USD 4.00.