In recent times, the cashmere industry has seen a profound shift in terms of demand, supply, and its future outlook. Renowned for its strength, lightness, durability and warmth, the material is highly prized by all consumers including, now, the Chinese. Derived from the natural hairs of different species of goats, China is currently the biggest and producer of this material. Yet high demands causing a spike in prices a few years ago has now been succeeded by a sharp fall during the recent financial crisis. With the luxury industry now hesitantly back on the rebound, cashmere firms in China are looking to reconfigure how to best position themselves for future growth.

Cashmere originates from central asia, including China’s provinces of Xinjiang, Gansu, Shangxi and Qinghai. Despite this rich history within inland China, its foray into the string of leading developed urban cities in China’s east coast have been recent. Therefore, the market for cashmere domestically is relatively small but growing. As the most substantial player in the cashmere industry, China is the biggest export giant with an output of approximately 10,000 metric tons per year. That said, given the strong demand from overseas companies, China’s inability to satisfy such a high demand has lead them to buy the raw material from Mongolian herders. In fact, China’s buyers seem to take the sheer majority of cashmere produced by their northern counterparts. Though higher prices are good for Mongolian herders, many Mongolian garment makers are outbid eventually leading to bankruptcy. 


Moreover, China has been perceived as both a provider and pollutant of the cashmere industry. For example, imitations of cashmere to cut-costs by blending the raw wool with lower-quality ingredients such as camel and yak hair are not rare. Foreign companies too have sought to source cashmere from Mongolia, since premium qualities hail from this  country. That said, their attempts have been unsuccessful with China dominating the market due to its geographical proximity. 

Firms are now starting to see cashmere not so much as a commodity, but more so in terms of the value that it offers to consumers. Erdos, one of the main competitors in China recently opened a flagship store in Shanghai under its subset store, “1436”. In targeting first and second tiered cities (Beijing and Shenzhen included), Erdos is seeking to bring value beyond the functional and monetary values of cashmere. Moreover, the firm is looking to ensure that quality is tightly controlled and that detailing is impeccable. As a maven that seeks to pave the way for locally-made, locally-sourced, luxury goods in China, products by Erdos have been nationally and officially claimed by China’s Premier Hu Jin Tao as the “pride gift of China”. And perhaps this says something about where this still under developed market should go. After all, there are many producers and exporters in China, but few memorable brands. 

Cashmere Goat Flickr

image source: polyvore.com (compilation mine), flickr - the wandering angel

Note: This blog post is the second part of a three-part series called “China’s Thirst for Heritage”. You can read the first part focussing on jade, its history, retail, and recent comeback here.

***Update: Part 3 of this blog post series will be looking at bamboo!***