You are on page 1of 9

CBI Trade Statistics for

Home Textiles
Broadcasting your trade statistics
The European home textiles market suffers in times of
economic adversity because consumers cut back their
spending on non-essential products for the home. Based on
economic indicators, the short-term outlook is looking positive
and there will be opportunities in the longer term as consumer
confidence gathers pace. The role of developing countries
(DCs) is growing, with their share in European imports on the
rise. Opportunities can be found both in Western Europe,
where production is declining and leading importers are
located, and in in the emerging markets of Eastern Europe.
Refer to the CBI Trade Statistics movie on YouTube and the
CBI website.
Consumption
The European home textiles market remains fragile and quite volatile, but
modest growth is predicted. In the short term, the positive prognosis for GDP
and new housing favours consumption, while growth markets in Eastern Europe
provide opportunities in the long term.
Figure 1: EU/EFTA consumption of home textiles, value in million*
20,000

Textile wallcoverings

18,000

Bedspreads

16,000

Bathrobes

14,000

Table linen

12,000

Blankets

10,000

Bath & kitchenlinen


Sleepware

8,000

Cushion covers

6,000

Curtains

4,000

Oilcloth

2,000

Bedlinen

0
2008

2009

2010

2011

2012

Carpets

* Excludes data on Switzerland, aprons, stuffed toys


Source: Prodcom, Eurostat, 2014

Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer

CBI Tradewatch for Home Textiles

Figure 2:

Leading EU/EFTA markets of


home textiles in 2012, share in
value *

Figure 3: Leading EU/EFTA mature and emerging


markets of home textiles, value in
million
4,000
3,500

Other
19%

Poland
3%

UK
21%

Netherlands
3%
Romania
4%

Germany
18%

Spain
6%
Italy
11%

3,000

UK

2,500

Germany

2,000

France

1,500

Romania

1,000

Poland

500

Hungary

France
15%

* Excludes data on Switzerland, aprons, stuffed


toys
Source: Prodcom, Eurostat, 2014

* Excludes data on Switzerland, aprons, stuffed toys


Source: Prodcom, Eurostat, 2014

Figure 4:

Figure 5:

GDP and new housing, %


change on previous year

Consumer confidence indicator EU27,


2012-2014

-5

0
2009 2010 2011 2012 2013 2014 2015

Oct/12
Nov/12
Dec/12
Jan/13
Feb/13
Mar/13
Apr/13
May/13
Jun/13
Jul/13
Aug/13
Sep/13
Oct/13
Nov/13
Dec/13
Jan/14
Feb/14
Mar/14

-10

-5

-15
GDP

-10

New
hous
ing

-15

-20
-25
-30

-20

The European Commission's consumer


confidence index - EU-27

-25

The European Commission's consumer


confidence index - Eurozone

Source: Eurostat (2014), Bundesverband


Baustoffe (2013)

Source: Eurostat (2014)

Consumption is slowly making a comeback


The European home textiles market suffered greatly from the economic
crisis. The home textiles sector is closely linked to economic conditions: as
soon as incomes decline, consumers start cutting back expenditure on nonessential products, including decorative textiles. Product replacements can
be postponed. The current mind-set of consumers remains negatively
affected by the economic crisis.
Important sectors influencing European demand for home textiles, such as
the construction and hotel sectors, have suffered from the economic crisis as
well, making the market fragile at this moment. Short-term outlooks remain
pessimistic. As soon as the economy recovers, spending on construction and
tourism is expected to rise.

Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer

CBI Tradewatch for Home Textiles

CFA1: Be careful when targeting countries with negative developments in the


construction sector (such as Bulgaria, Ireland, Greece, Spain, Portugal and
Slovenia).

Leading sub-sectors are carpets, bed linen, oilcloth, curtains and cushion
covers. The market for carpets showed an increase of 1.5% annually and the
market for bed linen increased by 1.0% annually during the review period.
Demand for blankets increased by a promising 2.5% annually; the only other
product group with a significant increase.
Consumer confidence has remained low in the EU. After the extreme dip in
2009, consumer confidence increased during 2011, but declined again
significantly in 2012. Consumer confidence has steadily increased since
2013, but still remains negative. Consumer confidence is expected to
increase slightly, in line with forecast growth in GDP2.

CFA: There are substantial differences in consumer confidence. Consider


entering European markets which have positive macro-economic indicators,
which could offer greater opportunities in the short and middle term, such as
Denmark, Finland and Sweden.

With the exception of Cyprus, European GDP forecasts are positive, boosting
demand for home textiles in the near future. The European housing market,
however, remains insecure for 2014 although an increase in new-build
housing is forecast for 2015 (except for Italy, Portugal and the Czech
Republic). This could have a positive impact on the consumption of home
textiles.

Another favourable development which could boost the home


textiles market in the coming years comes from the generation
of people born after the Second World War (1945-1970). They
are currently retiring and their children are often living
independently. As a result, they can start looking for new,
downsized houses.

CFA: Aim at this consumer segment by offering high-quality, stylish and


convenience products. Also refer to CBI Trends for Home Decoration and
Textiles, chapter on Consumer Trends Function and feeling.

In the long term, the market is expected to pick up again, especially in the
growth markets in Eastern Europe, forming a promising target market for DC
exporters in the future. The purchasing power of Eastern Europeans is
expected to converge with Western European standards, enabling them to
spend more on non-essential items for the home.

CFA: In the longer term, consider targeting Eastern European countries, where
market growth is expected in the coming years.

Politics will also have an impact on the long term market situation in
Europe. The continuing Euro crisis, which is heavily dependent on politics,
negatively affects the future of home textiles consumption as it brings
instability to the market. Political intervention in the housing market to
stimulate home sales can have a substantial positive influence on the
demand for home textiles.

CFA: Stay up-to-date with the latest macro-economic and political


developments because the market remains dynamic and unpredictable.

Consideration for action

2 Gross Domestic Product: is commonly used as an indicator of the economic health of a country, as
well as to determine a country's standard of living.

Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer

CBI Tradewatch for Home Textiles

Production
Suffering from strong competition in the home textiles market, Western
European production has seen continuous decline. Eastern Europe, however, is
an emerging producer, forming a future threat to DCs.
Figure 6:

EU/EFTA production of home textiles, value in million*

14,000

Textile wallcocerings
Bedspreads

12,000

Bath robes

10,000

Table linen
Blankets

8,000

Bath and kitchen linen

6,000

Sleepwear
Bedlinen

4,000

Cushion covers

2,000

Curtains
Oilcloth

0
2008

2009

2010

2011

2012

Carpets

* Excludes data on Switzerland, aprons, stuffed toys


Source: Prodcom, 2013
Figure 7: Leading EU/EFTA producers of home
textiles in 2012, share in value*

Figure 8: Leading EU/EFTA mature and


emerging producers of home
textiles 2009-2012, value in
million
2,500
Germany

Other
28%

Germany
16%
United
Kingdom
14%

2,000

United
Kingdom

1,500

Italy

1,000

Poland

Netherlands

8%
Belgium
10%
France
11%

Italy
13%

* Excludes data on Switzerland, aprons, stuffed toys


Source: Prodcom, 2014

Romania

500

Hungary
0
2008 2009 2010 2011 2012

* Excludes data on Switzerland, aprons,


stuffed toys
Source: Prodcom, 2014

Carefully monitor developments in Eastern Europe

Western European production has been declining for many years, and is
currently focused on concentration (mergers and acquisitions), outsourcing,
and specialisation (focussing on specific market segments or niche products).
The labour-intensity of the home textiles sector certainly provides
opportunities for DC suppliers to replace European production. Because the

Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer

CBI Tradewatch for Home Textiles

labour costs in DCs are low compared to Europe, manufacturers can


outsource production to DCs.
CFA: Try to convince European producers who are looking to outsource their
production that you are a suitable partner for the production of their products.
Stress your unique selling points, i.e. why your company is a better counterpart
than a company in Eastern Europe or Portugal.
CFA: Differentiate yourself from European producers by offering a unique
product that tells a story or showcases local craftsmanship, which is hard to
replicate in Europe.
CFA: Create long-term relationships with your buyers; this can prevent them
from easily switching to other suppliers. Moreover, their input can help you
make your product more suitable for the European market.

In contrast, production in Eastern Europe is on the rise, posing a threat to


DC suppliers. This region is not only an emerging market for home textiles,
but also an emerging producer. Despite the economic crisis, production in
many Eastern European countries increased, especially in Croatia, Romania,
Lithuania and Estonia. Product groups produced by the leading emerging
countries are cushion covers, curtains and carpets. This development is
expected to continue in this decade. Eastern Europe profits from relatively
low labour costs and its proximity (lower transport costs and fast delivery)
to the Western European marketplace. Additionally, EU protectionist
legislation is increasingly favouring production from this region.

CFA: Monitor Eastern European production developments, which pose a


potential future threat.

Imports
The share of DCs in imports continues to grow. Opportunities can be found both
in Western and Eastern European markets.
Figure 9: EU/EFTA imports per sourcing country, value in million
18,000
16,000
14,000
Other DC

12,000

Bangladesh

10,000

Pakistan
India

8,000

Turkey
6,000

China
Non DC

4,000
2,000
0
2009

2010

2011

2012

2013

Source: Eurostat 2014

Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer

CBI Tradewatch for Home Textiles

Figure 10: Leading EU/EFTA mature and emerging


importers of home textiles, value in
billion
4,000

Figure 11: EU/EFTA imports per sub-sector


in 2013

Blankets
Cushion 4%

3,500

Table
linen
3%

Other
2%

covers
5%

3,000

UK

2,500

Curtains
7%

Carpets
25%

Germany

2,000

France
Netherla
nds
Italy

1,500
1,000
500

Sleepwa
re
Bath &
kitchenli 12%
nen
10%

Bedlinen
20%
Oilcloth
12%

0
2009 2010 2011 2012 2013
Source: Eurostat 2014

Source: Eurostat 2014

Declining production in Western Europe and growing markets in Eastern


Europe favour imports from developing countries

In 2013, the EU/EFTA imported 14.8 billion worth of home textiles, 45%
of which was imported from DCs. China has been the leading supplier for
the past few years. After a decline in 2012, in line with the dip in consumer
confidence, imports have increased again during 2013. Textile imports
increased by 3%, from 14.5 billion to 14.8 billion. The modestly positive
forecast in consumption and the slowly increasing consumer confidence in
2014 are expected to favour imports of home textiles. When the market
recovers from the crisis, imports from DCs are expected to continue to
increase. Large product groups imported are carpets and bed linen. Carpets
showed an annual decline of 3.1% between 2009 and 2013. Product groups
where EU/EFTA imports increased significantly are blankets and bed linen.

CFA: In the short term, consider countries in Scandinavia, which have witnessed
moderate growth in imports from DCs, in line with the increase in consumer
confidence in this region. Although they are not the largest markets, they offer
stable growth opportunities.

As the European market is still under pressure, retailers are maintaining


lower stocks and are converting their old (or dead) stock into cash before
buying again. Also, they are more demanding of their wholesaler in terms of
quality and convenience.
Importers are responding by:
o
reducing the size of their orders,
o
managing their working capital cycle more tightly (e.g. by
negotiating tougher terms of payment),
o
looking at cost advantages (e.g. improving logistics)
o
and by differentiation in the market (i.e. better service, shorter but
faster marketing campaigns, improved design, improved sales
activity).
Not all market segments see imports drop in equal measure. Industry
sources indicate that certain volume markets and many premium markets

Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer

CBI Tradewatch for Home Textiles

are doing well. It is the mid-market that is most affected, perhaps through
lack of cost advantages and differentiation. Online marketing is growing, in
line with greater consumer demand for lower prices and convenience.
CFA: Develop a keen interest in your importers situation in relation to his role
in the chain, so that you can better understand his/her considerations. The
greater the convenience the importer experiences in working with his suppliers,
the more he/she will cherish and develop the relationship. All angles of the
suppliers business are relevant when it comes to assisting a buyer under
pressure: e.g. logistical advantages, cost reduction, increasingly taking the
initiative in product development, more story (in terms of manufacture,
background of products, green values) and better communication throughout
the process.

Opportunities for DCs can be found in both mature Western European and
emerging Eastern European markets. DCs can profit from declining
production in the West and a growing demand for home textiles in the East.
Important Eastern European importers include Poland and Czech Republic.

CFA: Consider Western Europe where the leading importers from DCs can be
found: Germany, UK, France, the Netherlands, these countries are showing
modest growth in imports from DCs in value. In the longer term, consider
Eastern Europe, where growth opportunities for DC exporters are expected. The
Czech Republic, as well as Romania, Bulgaria and Lithuania have emerged as
importers of home textiles from DCs during the review period.

Exports
With West-European production facing a downward trend, the importance of reexports from trading hubs is expected to increase in the future. Future trade of
home textiles will continue to go over the traditional trade hubs, but will be reexported to other end markets in the EU/EFTA.
Figure 12: EU/EFTA home textile exports including destinations, value in million

12,000

10,000
USA

8,000

Poland
Netherlands

6,000

UK
France

4,000

Germany
Other

2,000

0
2009

2010

2011

2012

2013

Source: Eurostat 2014

Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer

CBI Tradewatch for Home Textiles

Figure 13: Leading EU/EFTA exporters of home


textiles, value in billion
2,500

Figure 14: EU/EFTA exports per subsector, value in million

Cushion
covers
4%

2,000
Germany
1,500

Belgium
Netherlan
ds

1,000

Italy
France

500

Other
7%

Curtains
6%
Bath &
kitchenlin
en
7%

Carpets
34%

Sleepwar
e
7%
Bedlinen
14%

Oilcloth
21%

0
2009

2010

2011

Source: Eurostat 2014

2012

2013

Source: Eurostat 2014

Trading hubs are expected to play a larger role

In 2013, Europe exported 11.1 billion home textile products. After a


moderate decrease in exports during 2012, the value of exports increased
again in 2013 by 4% - almost 74 million. Around 80% of the exports are
destined for countries within Europe, indicating that European production
largely stays within the region. With the prognosis for production
increasingly being outsourced to Eastern Europe, intra-European trade is
expected to play a growing role.

In the same way, trading hubs can also play a more important role in the
future, meaning that imports from DCs could become more concentrated
and increasingly re-exported to other European countries. Germany, the
Netherlands and Belgium usually fulfil such a role due to their large ports.
Their imports are much higher than their domestic consumption, while
exports exceed production.

CFA: Consider trade hubs, such as the Netherlands, and, to a lesser extent,
Belgium, to reach your target market indirectly through re-exports.
Find out about the major trade hubs for your product as this can vary per
product and target country/region.

While China is the largest supplier of home textiles to Europe, it still


received only 1% of total European exports. However, supplies to China
increased by 20% annually during 2009 and 2013, a high growth rate
compared with other destinations. China and Russia (part of BRICS) are
expected to become emerging export destinations for Europe as well as for
DC suppliers.

CFA: Monitor the role of China, since it can alter your position on the European
market. With European suppliers targeting China, there will be more room for
foreign suppliers on the European market. At the same time, if you target BRIC
markets as well, it could increase your bargaining power in general (also refer to
CBI Field of Competition for Home Textiles).

Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer

CBI Tradewatch for Home Textiles

This survey was compiled for CBI by


ProFound Advisers In Development
in collaboration with
CBI sector expert Steve Pepper
Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer

Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer