Textile and Apparel Market Overview

An Expert's View about Textiles, Apparel and Accessories in Ukraine

Last updated: 8 May 2011

Summary
UKRAINE

With a population of 45.8 million people, Ukraine is considered a promising and growing market for U.S. suppliers of textiles and apparel (light industry sector). The market size in this category is estimated at USD 2.8 billion, which is dominated by imports. Imports grew by 38% in 2010 vs. 2009. Major exporters of textile and apparel to Ukraine are China, Turkey, Russia, Germany, Italy and Poland.

According to the State Statistics Committee of Ukraine, the Ukrainian light industry sector demonstrated growth of 21.9% in January 2011, over the same period of 2010. Overall, the Ukrainian textile and apparel market demonstrated nearly 20% growth in 2010. The prospects for 2011-2015 remain optimistic.

U.S. market share, according to Global Trade Atlas statistics, has declined from 2.5% in 2009 to 1.7% in 2010.

Ukraine can be an attractive place for outsourced fabrication. Some international manufacturers consider the following benefits for launching local production:

• low cost labor
• well-educated workforce
• proximity to the European markets
• Ukraine’s domestic market of nearly 45 million consumers

The key competitive advantages in the apparel industry are price, quality, functionality and brand recognition. Also important is promotion, strong local recognition, as well as brand reputation of both local and international firms. The best import and sales potential is expected for comfortable, casual wear clothing made of clean, light and soft fabrics, and organic fabric apparel.  

According to the State Statistics Committee of Ukraine, the local production for eleven months (January to November) 2010 amounted to 3.9 million fabric and fur coats. In 2010, Ukrainian factories manufactured 16.7 million underwear items, demonstrating a 28.7% increase vs. 2009 production for the same period; and 62.5 million items of hosiery, a 19.6% increase. According to industry experts, the textile and apparel industry is demonstrating steady growth.

The key sector of the textile industry is the production of cotton, wool and linen sub-units. The cotton industry uses imported raw materials. The largest operations are located in Kherson, Donetsk, Ternopil, Kyiv, Kharkiv, Lviv, Poltava and Chenivtsi. The highest concentration of large wool operations using both domestic and imported raw materials are in Chernihiv, Donetsk, Kryvy Rih, Odesa, Luhansk and Sumy. The linen industry is concentrated in Rivne and Zhytomyr.

The textile and apparel market encompasses a diverse assortment of styles and quality levels in Ukraine. The apparel market is considered very campaign driven. Ukrainians are highly receptive to both marketing and advertising. The purchasing power of Ukrainian consumers is rising and an average Ukrainian consumer can afford to and is spending more on clothing and footwear than in past years. Ukrainians are choosing to purchase branded clothing in the mid-price range instead of the non-branded apparel sold through small traditional shops or open-air markets. Consumers are becoming increasingly fashion conscious and demanding higher quality and more sophisticated products. Shopping in boutiques of internationally recognized brands and designers is a way to confirm customers’ social status. Thanks to travel abroad, Ukrainians are more aware of international brands and more interested in following European and international fashion trends.

The current dollar depreciation and Euro appreciation vis-à-vis the Ukrainian hryvna has contributed to increased market opportunities for U.S. exports. In view of the competition from European companies, primarily in mid and upper-middle price ranges,

U.S. exporters that offer products at moderate prices have the greatest potential. U.S. exporters should be aware that all goods imported into Ukraine are subject to customs duties and valueadded tax of 20%. Ukrainian customs valuation rules generally comply with WTO rules. The Ukrainian Classification of Foreign Economic Activities (UC FEA), which is based on the Harmonized Commodity Description and Coding System, serves as the basis for Ukraine’s Customs Tariff.
 

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Posted: 06 May 2011, last updated 8 May 2011

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