Southeast Asia Insight: A Glimpse into the Malaysian Market

Amidst the ever-evolving global landscape of the textile and garment industry, the Southeast Asian market presents immense growth potential. To further promote deeper integration between China's sewing machinery industry and the Southeast Asian market, better respond to the national "Belt and Road" development strategy, and gain an in-depth understanding of the development of the textile and garment industry in key markets and the changing needs for sewing equipment upgrades and renovations, the China Sewing Machinery Association organized a group trip to Southeast Asia for market research and exchanges during the first half of this year, assisting enterprises in expanding their overseas markets.

Stable Economic Growth, Numerous Development Advantages

As a major economic center in Southeast Asia and a second-generation emerging industrial nation, Malaysia demonstrates strong market potential, attracting numerous domestic and foreign companies to expand their presence. Compared to neighboring countries, it boasts advantages such as a superior geographical location, stable political and economic development, policy support, and linguistic and cultural similarities, particularly a relatively well-established textile and garment industry foundation. Simultaneously, Malaysia is a member of ASEAN and among the first countries to respond to the "Belt and Road" initiative. China has been Malaysia's largest trading partner for 16 consecutive years, while Malaysia is China's second-largest trading partner and largest import source among ASEAN member states. In 2024, bilateral trade between China and Malaysia reached US\$212 billion, an increase of nearly a thousandfold since the establishment of diplomatic relations between the two countries.

 

 

As a constitutional monarchy and federal parliamentary system, Malaysia enjoys relative political stability. With a land area of 330,000 square kilometers and a population of 33.7 million (2023), comprising diverse ethnic groups including Malays, Chinese, Indians, indigenous peoples, and a small Eurasian population, its lower labor costs and continuously improving education levels provide significant advantages for attracting foreign investment.

In 2024, thanks to global economic recovery, improved growth indicators in major economies, and improved external demand, the Malaysian economy showed signs of recovery. Driven by investment and export growth, the annual GDP growth reached 5.1%, exceeding the government's target of 4% to 5%. Investment grew by 12% year-on-year, achieving its best performance in nearly 12 years. In 2025, while facing challenges from global environmental changes, the Malaysian economy is expected to maintain medium-to-high-speed growth, supported by strong domestic demand and exports. In the first quarter of 2025, Malaysia's GDP grew by 4.4% year-on-year.

 

Solid Apparel Industry Foundation, Favorable Business Environment

Malaysia is a major global apparel export market. As one of the "Asian Tigers," it has a high per capita consumption level, coupled with a large number of tourists, driving apparel consumption demand. It is one of the most promising apparel consumer markets in Southeast Asia and China's tenth-largest export destination for apparel. In 2024, China exported US\$4.166 billion worth of apparel and clothing accessories to Malaysia, a year-on-year decrease of 1.3%; exports of knitted or crocheted apparel and clothing accessories amounted to US\$2.071 billion, a year-on-year increase of 5.8%; and exports of non-knitted or non-crocheted apparel and clothing accessories amounted to US\$2.012 billion, a year-on-year decrease of 7.6%. China is one of the main suppliers of textile fabrics to Malaysia, accounting for nearly 30% of Malaysia's total textile fabric imports.

 

 

According to Tan Chong Shu, President of the Malaysian Textile Manufacturers Association (MTMA), Malaysia's textile and garment industry is mainly composed of four segments: basic textiles (spinning, weaving, dyeing and finishing, etc.), garment manufacturing, textile products, and accessories. Among these, dyeing and garment making are relatively mature and occupy a larger market share. Malaysia's garment enterprises started early, and cooperation with Chinese enterprises began in the 1980s. Many large garment enterprises were established at that time, but now the vast majority are SMEs, distributed throughout Malaysia, relatively concentrated in West Malaysia, with a total number of about 500, employing anywhere from dozens to hundreds of workers. Knitted garment production is more prevalent than woven garment production.

Malaysia has always attached great importance to and supported the development of the textile and garment industry, focusing on creating branded products and encouraging exports to multiple countries. Supported by the Malaysian Ministry of Trade and Industry, the Malaysian Textile Manufacturers Association has a training center, which is a training organization recognized by the Malaysian Human Resources Development Fund. It develops and provides job training courses, provides industry consulting services, and offers workers necessary vocational and technical training to enhance industry competitiveness and innovation. Malaysia's exhibition platform is held annually in August. The annual Apparel & Textile Malaysia exhibition is held at the Kuala Lumpur Convention Centre. As Malaysia's largest and only textile industry exhibition platform, it covers approximately 15,000 square meters, with around 150 exhibitors and over 1,000 professional visitors.

 

Intense International Competition, Multiple Challenges Facing Apparel Industry Development

In recent years, with the global shift in the apparel industry, the apparel industries of Vietnam, Bangladesh, Cambodia, Thailand, and other Southeast Asian countries have rapidly risen, posing a strong challenge to Malaysia's domestic apparel export share. These emerging markets have a greater competitive advantage in terms of human resources, land, and costs. Malaysia's apparel industry faces increasing cost pressures and market competition, coupled with the development of e-commerce and logistics and warehousing risks. Its heavy reliance on exports limits its growth potential, and its equipment level is relatively backward. The demand for diversification and small-batch production requires urgent upgrades to manufacturing methods.

Among the top 10 global apparel exporting economies, Malaysia fell from seventh place in 2020 and 2021 to outside the top ten in 2022 and 2023. In 2023, Malaysia ranked ninth as a source of apparel imports for Japan, with import value of US\$396 million, a year-on-year decrease of 17.4%, accounting for the same proportion of Japan's apparel imports as in 2024, namely 1.5%. It did not rank among the top ten in exports to the United States or the European Union. With countries successively shifting their apparel industries to these locations, Malaysia's apparel exports to Turkey have increased, and it also maintains close cooperation with African countries such as South Africa and Egypt. Export-oriented apparel companies in Malaysia have long since relocated to other countries such as Vietnam, Myanmar, and Cambodia. Companies selling in the domestic market or primarily in Southeast Asia generally maintain local production because of the tax-free benefits among the ten ASEAN countries, making the cost difference between local and overseas production insignificant.

According to the person in charge of Dama Sewing Machine Trading Co., Ltd. and some sewing equipment distributors in Kuala Lumpur, most garment factories in Malaysia are small-scale. Taking enterprises producing knitted products as an example, there are about 100 factories with fewer than 100 employees, about 10 factories with 100-200 employees, and more than 10 leading enterprises with more than 200 employees. Among them, sportswear factories are mostly concentrated in Seremban and Kuala Lumpur, accounting for 65% of the national total.

 

 

Except for some leading enterprises, the level of automation equipment is generally low. Regardless of large or small factories, more than 70% use Japanese sewing machine brands, and automated equipment is mostly from Japan, Europe, and the United States. Since the 1970s, the Southeast Asian equipment supply chain has been mainly based in Singapore, so sewing equipment supplied to the Malaysian, Indonesian, Thai, and Vietnamese markets is mostly of Japanese brands. Equipment has been in use for a long time, some for 20 or 30 years, and many machine models have been discontinued. It is difficult to find replacement parts for broken or worn-out parts.

It is reported that in terms of employment, Malaysia mainly introduces foreign workers from countries such as Myanmar, Vietnam, and Bangladesh, with an annual scale of nearly 10 million people. The younger generation in Malaysia is unwilling to work in factories, or mainly works in management positions in factories. Low-level workers in garment factories are basically foreign workers, and sometimes there may be seven or eight, or even a dozen, different languages spoken on a single production line. Foreign workers have lower wages, with an average minimum monthly salary of about 1700 Malaysian ringgit (approximately more than 400 US dollars).

In recent years, Malaysian garment factories have faced a shortage of workers and skilled workers, urgently needing more automated and easy-to-operate manufacturing equipment. Garment manufacturing is shifting from large-scale, mass production to small-batch, quick response, and personalized customization. A delivery period of three to five days places higher demands on equipment levels. More and more garment companies have noticed this development bottleneck and are seriously considering their future path. The government has also repeatedly called for accelerating the automation and upgrading of the garment industry to reduce reliance on foreign labor.

 

Sewing machine demand is growing rapidly, with the market nearing hundreds of millions of US dollars.

Malaysia is also an important user market and transshipment market for China's sewing machinery industry. According to data from the China Sewing Machinery Association, over the past decade, China's sewing machine exports to Malaysia have increased by 148.62%. In 2024, China's exports of sewing machinery products to Malaysia amounted to US$94,886,700, a year-on-year increase of 56.64%, ranking it as the tenth largest export market, accounting for 2.77% of total exports, an increase of 0.68 percentage points compared to the previous year. Among them, China exported 104,400 industrial sewing machines to Malaysia, a year-on-year increase of 82.72%; the export value was US$47,133,900, a year-on-year increase of 68.14%; and the average export price was US$451.62, a year-on-year decrease of 7.98%. 32,900 pre- and post-sewing equipment units were exported to Malaysia, a year-on-year increase of 46.14%, with a value of US$9,617,100, a year-on-year increase of 77.72%; the average export price was US$292.2, a year-on-year increase of 21.61%. 1,146,700 parts were exported to Malaysia, a year-on-year increase of 25.18%; the export value was US$7,762,600, a decrease of 11.01%. The growth rate of the export volume and value of complete machines was over 40%, while the average export price decreased.

In addition, in 2024, Malaysia surpassed the United States to become the largest export market for China's household sewing machines. Exports of household sewing machines priced over US$22 to Malaysia reached 604,000 units, with an annual export value of US$26,370,000, year-on-year increases of 120.61% and 73.40% respectively. The export value accounted for 11.50% of China's similar products, an increase of 4.36 percentage points compared to the previous year. The average export price was US$43.66, a year-on-year decrease of 21.40%.

 

 

Malaysia is also an important transshipment market for sewing machinery. For example, in 2024, India imported US$14,410,000 worth of sewing machines from Malaysia, a year-on-year increase of 43.24%; the import value accounted for 1.83%, an increase of 0.24 percentage points compared to the previous year. Among them, US$12,830,000 worth of industrial sewing machines were imported, a year-on-year increase of 38.25%, an increase of 0.4 percentage points compared to the previous year.

 

Strengthening automated iteration and upgrading, the prospects for the Chinese sewing machine market are broad.

Since there are no sewing machine manufacturing companies in Malaysia, local garment factories rely 100% on imports for their sewing equipment, and therefore have a relatively well-established dealer network. For over 20 years, Chinese sewing machine brands such as Jack and Toyama, together with local dealers, have actively developed the Malaysian market. Despite competition from the long-term use of Japanese brands by local garment factories, they have become good partners for garment factories due to their stable performance, efficient output, and attentive service.

It is reported that local companies are pragmatic in equipment procurement, mainly considering cost-effectiveness. Except for some export-oriented enterprises that undertake OEM for foreign large enterprises and need to use designated brands due to user requirements, local enterprises have no restrictions on the use of Chinese sewing machines and are willing to try and observe the use effects of Chinese sewing machine brands. However, local garment factories have relatively little understanding of Chinese sewing equipment. The reasons for this are: firstly, the inertia formed by the long-term use of Japanese brands; secondly, the concept of restrictions on equipment by exporting countries has not yet changed; thirdly, there are issues of mindset, with enterprises having a weak desire for updating and upgrading, hoping to find replacement parts in China; and fourthly, there are economic capacity issues, with many factories lacking sufficient funds to purchase, expand, and update equipment. At the same time, due to their scattered locations, the response time for equipment failures and electrical control repairs in garment factories is relatively long. Even if they try to purchase new products, they still need to face many problems in terms of maintenance, such as skills training.

 

 

Jack Sewing Machines entered the Malaysian market in 2000, leading the local market through two transformations, from the earliest under-hanging products to today's computerized products. In the future, with the continuous increase in labor costs, Malaysian clothing faces difficulties in thoughtful development. Jack's automated products, complete digital solutions, and entire plant logistics equipment will once again lead the Malaysian market, helping garment companies overcome the core problems of labor costs and improve production output. At the same time, Jack is also continuously gaining recognition from top-tier garment companies in Malaysia. Since 2013, Toyama has steadily expanded its Southeast Asian market following the "Belt and Road" initiative. Toyama, which has gone overseas, still maintains a mid-to-high-end positioning. Its intelligent sewing machines' automatic thread cutting, automatic stitch aesthetics, low failure rate, and skill-free operation are highly recognized, and it has reached cooperation with brands such as Nike, CK, and Boss in Malaysia. In the future, their exploration and layout in the Southeast Asian market will not stop, pushing "Made in China" to a larger and higher-end market.

NOHAD SON BHD, a dyeing and garment factory located in Selangor, is currently the largest manufacturer of sportswear in Malaysia. Since entering Malaysia in 2015, it has been operating for ten years, and the factory uses fully automated cutting, sewing, and packaging equipment from brands such as Bruce and Tuokabengma. The company's head said that the Malaysian garment industry has shown a trend of small batches, multiple varieties, and on-demand production, often with only 10 to 20 pieces per order. Faced with dozens of orders, the factory needs to meet the different requirements of each customer, and the switching of order production needs to be simplified and adjusted, thus forcing enterprises to upgrade and replace their equipment. Newly built factories are increasingly using Chinese sewing equipment. Under the working conditions of 12-16 hours per day (two shifts), the equipment has a very low failure rate and few problems during continuous production, thus increasing confidence in Chinese sewing machines.

With the development of information technology and digitalization, China's sewing machinery industry continues to improve product quality and further strengthen after-sales service. It has made rapid progress in single-machine automated control units, automated production lines, and cloud platform management. Chinese sewing enterprises are willing to provide better quality, easier-to-operate, and more cost-effective products and solutions for Malaysia's textile and garment industry and enterprises. At the same time, with the accelerated restructuring of the global supply chain industry layout, some garment enterprises are moving to Malaysia, and Malaysia is also an important production base for the textile and garment industry in the future. In the future, the China Sewing Machinery Association will further strengthen its contact and communication with MATA, actively explore deeper cooperation, establish an information exchange and cooperation mechanism, and further strengthen vocational skills training and standardization cooperation. We hope that Chinese sewing enterprises will seize the opportunities of jointly building the "Belt and Road" and RCEP, cultivate and develop the market, strengthen the promotion of "Made in China" products in the Malaysian market, accelerate the response speed of after-sales service, provide users with better quality, more convenient operation, and more efficient products and services, and make further improvements and efforts to promote the integration and win-win cooperation between the sewing machine and garment industries of China and Malaysia.

 

Source: Wang Lingyun, China International Sewing Equipment Exhibition