Çorap Sanayicileri Derneği Yayını
Yıl 9   Sayı 28   Eylül/Ekim 2009

CHEAP CHINESE SOCKS PRESSURING US IN THE GERMAN MARKET

Mithat Aracı

According to EUROSTAT data, during the last two years, the most important factor negatively affecting Turkey in the European cotton socket socks segment has been Germany’s move towards cheap Chinese socks. As you can see in graph 1, in the German market, Turkey’s market share has declined by 20% to 30% levels during the last 2 years. On the other hand, during the same period Chinese share has surged by 20% to 50% levels, basically replacing Turkey.   

However, as you can see in graph 2, in the England market, Turkey has not only lost limited market share to China but olso since the beginning of 2009, Turkey was able to gain market share back from China.

Why does Turkey retain its market share in the English market but looses it against China in the German market ? The main reason is that the German market purchases mostly cheap socks from China whereas England mostly concentrates on mid and high price segment where Turkey is highly dominated.

Graph 3 depicts that in the English market Chinese prices were in average 15% over Turkey’s in May 2009 and the gap slightly dropped to 5% in June 2009, showing us that the English market mostly purchases mid and high quality segment socks.

However, in the German market, China sells socks in average 45% below Turkey’s prices, showing us that the German market buys mostly cheap segment socks.

Unless we gain market share back from China in the German market we are not going to return to our good old days. But Turkey’s high cost structure prevent us from competing with China in cheap socks segment.

We hope that as soon as global crises recovers back, German consumers will increase their mid and high level socks consumption so that we regain our market share back from China in the German market. Let’s keep our fingers crossed....