Polo Shirt Market Analysis

Goals

  • To provide an analysis of the global polo shirt market (focusing on France, the UK, Germany, China, Japan, Korea, the US when possible) to provide insights which will help to fuel project strategies.

Early Findings

As the term 'polo shirt' has different interpretations (though the term's specific origin is uncertain, most believe it was originally developed in the 1920s by tennis star Rene Lacoste), it is important to define the term as to accurately present market analysis. For purposes of these early findings, the following definition of a polo shirt is being utilized: "a polo shirt, also known as a golf shirt and tennis shirt, is a form of shirt with a collar, a placket with typically two or three buttons, and an optional pocket."

Published Highlights from Paywalled Reports

The Global Polo Shirt Market 2020 by Manufacturers, Regions, Type and Application, Forecast to 2026 report was released by Markets and Research in April 2020. The full report can be purchased via the link provided here. Published excerpts from this report are highlighted below:
  • This report states that the global size of this market is "expected to grow at a CAGR of roughly 2.5% over the next five years", and is expected to be valued at approximately $5.71 billion by 2024 (up from $5.06 billion in 2019).
  • Unsurprisingly, China represents the largest manufacturing region. The country held 26% of the total production market in 2017.
  • In 2016, three brands held the top spots in market share (by revenue). They were Banana Republic, the Ralph Lauren Corporation, and Abercrombie and Fitch - collectively holding 9.82% of the total market.
An update to this market was published by the Market Research Store on June 16, 2020, which provides analysis related to impacts related to the COVID-19 pandemic. The full report can be purchased via the link provided here.
  • Limited publicly released details are available from this report given its recency, but the report itself contains data updated due to the current outbreak of the pandemic COVID-19.
  • Mentioned key players in the market include: Tommy Hilfiger, Brooks Brothers, Vineyard Vines, J. Press, Gucci, Paul Stuart, Prada, Ralph Lauren Corporation, TOUGH jeansmith, Calvin Klein, Thom Browne, Banana Republic, Kent Wang, Burberry, Hugo Boss, Lacoste, and Abercrombie & Fitch.
  • The complete table of contents for this paywalled report can be viewed here.

Market Insights

  • A 2020 report on the "Global Shirt Market" values the total global shirt market at $54.18 billion (as of 2019). Given that, the polo shirt segment represents an approximate 10.5% share of the global shirt market.
  • Statista estimates the global apparel market size at $1.848 trillion in 2019. Given that estimate, polo shirts represent approximately one-third of one percent of the total apparel market.

Value Chain

Polo shirts were chosen as the benchmark apparel item in the 2016 report called "Attracting Investment in Bangladesh—Sectoral Analyses: A Diagnostic Trade Integration Study" because of its comparatively standard specification found globally in numerous garment manufacturing locations. This study provides a value chain assessment of the polo shirt (specifically as it relates to Bangladesh). Details from the analysis are provided to provide insights on polo shirt manufacturing in China.
  • "The unit cost of producing a basic polo-style shirt in Bangladesh compares favorably with the unit cost in China. The VCA reveals that the unit cost in Bangladesh is approximately US$3.46 (Tk 283.72) per shirt, excluding margins and the cost of transportation to port (figure 5.5), against US$3.93 per shirt in China (figure 5.6) and US$3.06 per shirt in Ethiopia (figure 5.7). Although a polo shirt costs only US$0.39 to manufacture in Vietnam (figure 5.8), the VCA for Vietnam is not directly comparable to that of Bangladesh, China, or Ethiopia. Vietnam’s apparel production is dominated by the cut-make-trim (CMT) process and as such Vietnamese manufacturers do not incur the cost of raw materials, including fabric, which is the most expensive component in making polo shirts."
  • "The highest cost component in polo shirt production is fabric in Bangladesh, China, and Ethiopia. The primary value chain for the production of polo shirts is divided into six major stages: (a) raw material; (b) cutting and layering; (c) sewing and assembly; (d) finishing; (e) packing and loading; and (f) administrative cost and overhead. Figures 5.5–5.8 show the value chains for Bangladesh, China, Ethiopia, and Vietnam. For the top three stages in the primary value chain, a secondary value chain is provided that details contributions to the cost of the respective stage. The secondary chain components shown in the figures are limited to the top four contributing categories. For each chain, the highest cost contribution is indicated in blue, the second highest in orange, and the third highest in green. Raw material (fabric) is the highest cost component in polo shirt production in Bangladesh, China, and Ethiopia, representing 77.5, 62.2, and 54.6 percent of total costs, respectively. Bangladesh’s textile sector that supplies fabric to the garment subsector relies mainly on imports of raw cotton. China and Ethiopia produce cotton domestically. Ethiopian garment makers import the fabric for polo production, since the locally sourced fabric is of inferior quality and not competitively priced. There is no cost of fabric for Vietnam manufacturers using the CMT process."
  • "The second highest cost component in polo shirt production for Bangladesh, China, and Ethiopia is sewing and assembly, which represents 14.1, 25.4, and 30.3 percent of total costs, respectively. In all three countries, the cost of accessories is high and amounts to 70.3, 79.4, and 84.5 percent, respectively, for Bangladesh, China, and Ethiopia. In China, labor for the sewing and assembly stage is 18.6 percent of total costs, compared with 23 percent in Bangladesh. Other components, such as repair and maintenance (R&M) and electricity, contribute negligible costs to this stage for China and Bangladesh."
  • "The third highest production cost in Bangladesh and China is for finishing, at 3.9 percent of total cost in Bangladesh and 4.8 percent in China. In Bangladesh, the largest contributor at this stage is raw material (65.2 percent of finishing cost), followed by labor (25.8 percent) and R&M (7.3 percent). For China, labor contributes 81.1 percent of finishing costs, followed by R&M (9.1 percent) and electricity (7.2 percent). In Ethiopia, the third highest cost is administration and overhead, which contributes 8.5 percent of polo shirt production costs. Nearly two-thirds (64.7 percent) of overhead costs are financing charges, exacerbated by low access to finance. For Bangladesh and China, other stages, such as cutting and layering, packing and loading, and administration and overhead, are the least expensive components of polo shirt manufacturing and collectively contribute 4.2 percent and 7.7 percent to total production cost, respectively. In Ethiopia, cutting and layering, finishing and packing, and loading are the least expensive components and total 6.6 percent of production cost."
  • "Raw materials (fabric, collar, thread, labels, buttons, consumables, and so forth) are the most costly aspect of polo shirt production in most countries. Bangladesh, China, and Ethiopia are no exception; raw materials constitute roughly 90 percent of polo manufacturing cost in Bangladesh, 84 percent in China, and 83 percent in Ethiopia (table 5.3). The fabric for the body of the shirt is the highest proportionate contributor to raw material cost at 86 percent of the total raw material cost in Bangladesh, and 78 percent of the total raw material cost in China and Ethiopia. The absolute value of polo shirt material is highest for Bangladesh as well, at US$2.68 per shirt versus US$2.65 for China and US$1.70 for Ethiopia."
  • "The Bangladeshi labor productivity rate of 13–27 polo shirts per person per day is substantially lower than the 18–35 pieces per person per day achieved by similar factories in China."
  • "The World Bank Garment Firm Survey 2011 noted that the lead time (number of days from order receipt to delivery) in Bangladesh is much longer than that in India or China, with an average 88 days in Bangladesh but only 40–60 days in China and 50–70 days in India (World Bank 2011a). The difference was attributed chiefly to inefficiency at the Port of Chittagong, where it reportedly takes 4.5 days to turn around a ship of 800 20-foot equivalent units (TEUs) versus 8–12 hours in Singapore.10 In addition, the narrow Dhaka-Chittagong Highway slows apparel shipments (Haroon 2012). Long lead times for imported inputs and exported products are impediments to sector growth. (See annex 5G, tables 5G.3 and 5G.4 for import and export transport costs.)"
Summary
Based upon initial research, is anticipated that specific details surrounding the polo shirt market are going to be consistently blocked behind paywalled sources. It is suggested that an alternate core focus within this segment should be followed.

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