EPI Report: Apparel Market Research

This report market research was conducted to identify the most promising opportunities for locally-owned apparel factories in the Georgia and expand their customer portfolio through targeted exports. The study focused on retail fashion apparel. Conducted in August 2011, it included desk and field research in Germany, Ukraine, and Turkey.

In recent years, local entrepreneurs have embarked on important efforts to revitalize Georgia’s once-thriving apparel sector. With one notable exception, Georgian-owned factories today are primarily supplying the domestic market. Several company owners, however, have expressed a desire to expand their customer base to include export. To assist these companies with up-to-date, actionable market intelligence, EPI contracted a market study for three high potential countries.

The methodology included shortlisting target countries within a reasonable trading sphere for Georgia. From an initial list of 33 countries in Europe, the Former Soviet Union, and Turkey, three countries were selected for further study: Germany, Ukraine, and Turkey. Extensive desk research on demographic, economic, and trade data plus the consultant’s knowledge of retail environments and industry sourcing patterns drove the selection of the three.

In August 2011, a market survey was undertaken in the three countries (Berlin, Frankfurt, and Munich in Germany, Kyiv in Ukraine, and Istanbul in Turkey). Based on the current capabilities and equipment of the Georgian-owned factories, seven product categories were selected for the survey: printed T-shirts, polo shirts, ashed jeans, cargo pants, trench coats, wool and wool-like overcoats, and casual jackets such as parkas and anoraks. There were 451 individual products surveyed for brand, price (full retail), and country of origin. The survey was undertaken through visits to 107 retailers and covered 143 different local and international brands.

Based on the data collected, the following conclusions were drawn:

  • German and Turkish brands and retailers represent excellent targets for Georgian-owned factories;
  • The Ukraine can best be approached through German and northern European brands, including one notable Estonian brand;
  • Printed T-shirts are not recommended as a target due to the dominance of low cost labor and vertically-integrated supplier countries, specifically Bangladesh, India, and Pakistan;
  • Trench coats, wool, and wool-like overcoats represent an excellent target for selected Georgian-owned factories with extensive coat experience, or high quality military uniform experience; even the Turkish brands are sourcing their trench coats in China. With a recent (July 2011) 30% Turkish import tax on apparel from China, this represents a particularly good opportunity for Georgia;
  • Cargo and similar casual pants represent a good retail opportunity for Georgian-owned factories accustomed to manufacturing woven uniform pants with assorted pockets and trim;
  • European and Estonian brands currently sourcing in Eastern Europe/Balkan countries such as Bulgaria, Bosnia, Macedonia, Romania, and Serbia represent good targets for Georgian-owned factories due to the wage differential; these include brands such as those of Germany’s Betty Barclay Group, Estonian Baltika Group’s Monton brand, Italy’s Sixty Group, and Germany’s Luisa Cerano.
  • Uniform, corporate and promotional attire, and sports apparel (golf, tennis, and hunting) also represent good market potential for Georgian-owned factories. However, further research is needed to identify specific companies.

While trade shows have historically been important in marketing to the apparel brands and retailers, a combination of industry sourcing consolidation, economics, and migration to electronic communications platforms have greatly diminished the importance and variety of apparel trade shows in the past 18-24 months. Georgian companies are therefore advised to develop a strategy and practice for cold calling, targeting high potential brands and retailers, to present their factories and capabilities. Contact information for many brands and retailers whose products were surveyed are included in the appendices to this report.

Further Reading