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The Canadian Apparel market, with a population of approximately 30 million, was valued at US$6.1 billion in 1998. Approximately 54.1 percent of market demand was satisfied by domestic production and 45.9 percent by imports, as Canadian manufacturers continued to lose market share to imports. Domestic apparel sales dropped from 60.4 percent of the total market in 1994 to 54.1 percent in 1998 a 6.3 percent loss to imports over the four year period. Canada's apparel market is projected to expand at an annual real rate of two percent through 2000.
Canadian apparel imports were valued at US$2.8 billion in 1998 and accounted for 45.9 percent of the total apparel market. Between 1994 and 1998, the share of the market satisfied by imports grew 6.3 percent, from 39.6 percent to 45.9 percent.
The United States is Canada's second-largest supplier of apparel after China. Asian suppliers of low-cost apparel constitute the strongest foreign competitors to U.S. apparel exporters to Canada. U.S. competitiveness in Canada has, however, increased due to the total elimination of duties and tariffs on U.S. -origin goods under NAFTA. U.S. exporters also enjoy several other advantages over Asian competitors in Canada, such as: geographic proximity, similar consumer habits and fashion trends; a higher quality image; and brand name recognition. U.S. exporters of competitively priced, high quality, niche apparel products with the right marketing strategy can expect to do very well as the Canadian market expands moderately and imports continue to satisfy an increasing share of market demand.
The key to successful marketing of apparel in Canada is quality, style, price and service. The Canadian market for apparel differs significantly from that of the United States, not only in size and price, but also in the variety of consumer preferences among regions and provinces. U.S. suppliers should work closely with Canadian buyers to best respond to local preferences within Canada's distinct regional markets.
Canadian Men's and Boys' Apparel
The Canadian Apparel Industry is comprised of 5 sub-sectors: Men's and Boys' apparel; Women's Apparel; Children's Apparel; Fur Goods; and Other Apparel. This analysis addresses the Men's and Boys' segment of the Apparel Market.
The Canadian Men's and Boys' apparel segment, serving a population of 15 million males, continues to out perform all other sectors of the Canadian apparel market and is expected to lead the moderate two percent growth projected in the Canadian apparel market through 2000. The Men's and boys' apparel market accounts for nearly one third, or 33 percent, of the total Canadian apparel market and has increased moderately as a percentage of total market sales over the last few years. In 1997 the men's and boy's apparel market was valued at C$2,891.6 (US$2,088.6) million, and increased by 1.7 percent to C$2,941.0 (US$1,999.9) million in 1998. The men's and boys' apparel market is projected to grow to C$2,990.4 (US$2,033.5) million, or 1.7 percent, in 1999. A projected annual real growth rate of 2 percent is forecasted for the period 2000-2001.
Domestic shipments have consistently lost market share to imports, declining from 55.1 percent of total market in 1996, to 52.8 percent in 1997 and 50.8 percent in 1998. The market share of imported men's and boys' apparel increased from 44.9 percent in 1996 to 47.2 in 1997 to 49.2 percent in 1998. These imports are projected to account for 51.1 percent of the total Canadian men's and boys' apparel market in 1999.
The United States and China continue to be the largest suppliers of men's and boys' apparel to Canada, followed by Hong Kong, India and South Korea. Total 1997 imports in this sector were valued at approximately C$1,365.6 (US$986.4) million, and increased 5.9 percent to C$1,446.8 (US$983.8) million in 1998. Imports are projected to grow another 5.6 percent to C$1,528.0 (US$1,039.0) million in 1999. Imports of men's and boys' apparel are also projected to grow at an annual real growth rate of 2-4 percent between 2000-2001.
Canadian imports of men's and boy's apparel from the United States have grown over the last few years primarily due to the North American Free Trade Agreement (NAFTA). U.S. imports were valued at C$279.4 (US$208.1) million in 1997 and increased 2.4 percent to C$286.0 (US$194.5) million in 1998. Imports from the U.S. are projected to grow a significant 4.4 percent, to C$298.7 (US$203.1) million, in 1999. Furthermore U.S. exports to Canada are expected to grow at a real annual rate of 2-4 percent, same as the total growth in imports, from 2000 through 2001.
While Canadian apparel imports have increased so have their exports of men's and boys' apparel over the last few years. Exports in this category grew 13.7 percent from C$678.8 (US$490.3) million in 1997 to C$771.8 (US$524.8) million in 1998, and are projected to expand 12 percent to C$864.8 (US$588.1) million in 1999. According to industry experts, the slow growth in the domestic market coupled with a weak Canadian dollar has prompted domestic manufacturers to target export markets with a particularly strong focus on the United States. In 1998, approximately 95 percent of total Canadian apparel exports went to the United States, up from 89 percent in 1993.
STATISTICAL DATA
TABLE I
Canadian Market for Men's and Boys' Apparel (CDN$ millions)
Estimated Average Annual Real Growth 1997 1998 1999 2000-2001
Import Market 1,365.6 1,446.8 1,528.0 2%
Production 2,204.8 2,266.0 2,327.2
Exports 678.8 771.8 864.8
Total Market 2,891.6 2,941.0 2,990.4 2-4%
U.S. Imports 279.4 286.0 298.7 2-4%
Exchange Rate: 0.7223 0.6800 0.6800
Inflation Rate: 1.6 1.0 1.5
Receptivity Score (1-5) 5 - extremely receptive
Canadian consumers are very familiar with U.S. brand name apparel and are very receptive to U.S. fashion, designs and product quality. Canada's close proximity to the United States; similarities in consumer behavior and lifestyles; and benefits derived from the NAFTA; make U.S. apparel exports very competitive in Canada, despite the current differences in currency exchange. Hence a receptivity rate of 5 is assigned.
TABLE II
Canadian Men's and Boys' Apparel Market (US$ Millions)
1997 1998 1999
Import Market 986.4 983.8 1,039.0
Production 1,592.5 1,540.9 1,582.5
Exports 490.3 524.8 588.1
Total Market 2,088.6 1,999.9 2,033.5
U.S. Imports 201.8 194.5 203.1
Import Market Share (%) 1997 1998
United States 20.4% 19.7%
China 19.0% 19.8%
Hong Kong 9.0% 6.8%
India 6.2% 6.8%
South Korea 5.1% 6.1%
Notes to Statistical Table
1. Total Market equals Imports plus Local Production less Exports.
2. Apparent discrepancies in percentages and dollar values between the two tables result from currency conversions. Due to exchange rate fluctuations, the overall annual real growth rate will appear to differ when examining the statistical data in U.S. dollars.
3. Data Sources: Import, export and local production figures contained in Table I and II originate from a variety of sources including Statistics Canada, Industry Canada, Associations and Trade Publications. Where data was not available or incomplete, best estimates were utilized.
4. Men's and boys' apparel included in this subsector analysis are classified under the Harmonized System (H.S.)
Codes listed below:
H.S. 6101.10 - 6101.90 Men's and boys' overcoats, car coats, capes, cloaks, anoraks, wind breakers, and similar articles, knitted or crocheted, of wool, cotton, synthetic fibers, and other textile materials
H.S. 6103.11 - 6103.19 Men's and boys' suits of wool, cotton, synthetic fibers and other textile materials, knitted
H.S. 6103.21 - 6103.29 Men's and boys' ensembles of wool, cotton, synthetic fibers and others, knitted
H.S. 6103.31 - 6103.39 Men's and boys' suit-type jackets and blazers of wool, cotton, synthetic fibers and others, knitted
H.S. 6103.41 - 6103.49 Men's and boys' trousers, bib and brace overalls, breeches and shorts of wool, cotton, synthetic fibers and others, knitted
H.S. 6105.10 - 6105.90 Men's and boys' shirts, knitted or crocheted, of cotton, man-made fibers and others
H.S. 6107.11 - 6107.19 Men's and boys' underpants and briefs of cotton, man-made fibers and others, knitted
H.S. 6107.21 - 6107.29 Men's and boys' nightshirts and pajamas of cotton, man-made fibers, and others, knitted
H.S. 6107.91 - 6107.99 Men's and boys' bathrobes, dressing gowns and similar articles, knitted or crocheted of cotton, man-made fibers and others
H.S. 6109.10 - 6109.90 Men's and boys' T-shirts, singlets, tank tops and similar garments, knitted or crocheted, of cotton, man-made fibers and wool
H.S. 6110.10 - 6110.90 Men's and boys' pullovers, cardigans and similar articles, knitted and crocheted, of cotton, wool and fine animal hair
H.S. 6112.31 - 6112.39 Men's and boys' swimwear of synthetic fibers, other textile fibers, knitted
H.S. 6201.11 - 6201.19 Men's and boys' overcoats and similar articles of cotton, wool, man-made fibers, not knitted
H.S. 6201.91 - 6201.99 Men's and boys' anoraks and similar articles of cotton, wool, man-made fibers, not knitted
H.S. 6203.11 - 6203.19 Men's and boys' suits of wool, fine animal hair, synthetic fibers, other textile materials, not knitted
H.S. 6203.21 - 6203.29 Men's and boys' ensembles of cotton, wool, fine animal hair, synthetic fibers, not knitted
H.S. 6203.31 - 6203.39 Men's and boys' jackets and blazers of cotton, wool, fine animal hair, synthetic fibers, not knitted
H.S. 6203.41 - 6203.49 Men's and boys' trousers and shorts of wool, cotton, fine animal hair, synthetic fibers, not knitted
H.S. 6205.10 - 6205.90 Men's and boys' shirts of cotton, wool, fine animal hair, man-made fibers, other textile materials, not knitted
H.S. 6207.11 - 6207.19 Men's and boys' underpants and briefs of cotton, other textile fibers, not knitted
H.S. 6207.21 - 6207.29 Men's and boys' nightshirts and pajamas of cotton, man-made fibers, other textile materials, not knitted
H.S. 6207.91 - 6207.99 Men's and boys' bathrobes, dressing gowns of cotton, man-made fibers, other textile materials, not knitted
H.S. 6210.20 - 6210.40 Men's and boys' overcoats and similar articles, not elsewhere specified
H.S. 6211.11 Men's and boys' swimwear of textile materials, not knitted
H.S. 6211.31 - 6211.39 Men's and boys' garments of wool, fine animal hair, not elsewhere specified, not knitted
H.S. 6215.10 - 6215.90 Men's and boys' ties and cravats of silk, silk waste, not knitted
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