Exploring Southeast Asia: A Micro Observation of the Malaysian Market

As the global textile and apparel industry continues to shift, Southeast Asian markets show immense growth potential. To deepen integration between China’s sewing machinery industry and these markets—and to support the national “Belt and Road” initiative—the China Sewing Machinery Association (CSMA) organized a market research delegation to Southeast Asia in the first half of this year, aiming to help enterprises expand overseas and understand the region’s evolving textile and apparel needs.

Economic Stability with Multiple Advantages

Malaysia, a key Southeast Asian economy and emerging industrial nation, offers strong market potential and attracts both domestic and foreign investment. It boasts geographic proximity, stable political and economic environments, favorable policies, shared language and culture, and a robust textile and apparel base. As an ASEAN member and early participant in “Belt and Road,” Malaysia has been China’s largest trading partner for 16 consecutive years. In 2024, bilateral trade surged to USD 212 billion—nearly 1,000 times larger than at the time of diplomatic establishment.

Malaysia is a stable constitutional monarchy covering 330,000 km² with a population of 33.7 million (2023). Its multi-ethnic workforce—comprising Malays, Chinese, Indians, indigenous peoples, and Eurasian communities—along with relatively low labor costs and improving education, creates significant advantages for attracting foreign capital.

Its economy rebounded strongly in 2024, thanks to global recovery, improved demand, and growth across major economies. GDP grew 5.1%, exceeding its 4–5% target, with investment up 12%—the strongest increase in nearly 12 years. Despite global uncertainties in 2025, strong domestic demand and exports helped maintain a 4.4% Q1 GDP growth.

Solid Apparel Base with Favorable Business Environment

Malaysia is a major apparel exporter and considered one of the “Four Asian Tigers,” with high per-capita consumption and strong tourist-driven demand. It ranks among the top 10 destinations for Chinese apparel exports.

In 2024, China exported USD 4.166 billion in clothing and apparel accessories to Malaysia—a 1.3% decline. Knitwear exports reached USD 2.071 billion (+5.8%), while woven wear exports were USD 2.012 billion (–7.6%). China supplies nearly 30% of Malaysia’s textile fabric imports.

According to Chen Songshu, President of the Malaysia Textile Manufacturers Association (MTMA), the Malaysian industry comprises four main segments: spinning, weaving and finishing, apparel manufacturing, and textile products/accessories. The dyeing and garment sectors are particularly mature. First-tier Chinese collaborations emerged in the 1980s, with most of today’s 500 apparel enterprises being SMEs located mainly in Peninsular Malaysia. Knit factories predominate over woven ones.

The Malaysian government supports sector development, branding, and export expansion. Under the Ministry of International Trade and Industry, MTMA runs a recognized training center providing vocational training and consultancy. The annual Apparel & Textile Malaysia exhibition is held each August in Kuala Lumpur, covering 15,000 m² with ~150 exhibitors and over 1,000 professional attendees.

Intense Competition and Industry Challenges

With the global apparel production shift to Vietnam, Bangladesh, Cambodia, and Thailand, Malaysia’s market share has faced strong competition. These emerging countries offer lower labor and land costs. Malaysia’s dependence on exports, rising e-commerce and logistics risks, outdated equipment, and shift toward small-batch and customized production challenge its industry to upgrade.

Malaysia fell out of the global top 10 apparel exporters after 2021. In 2023, it was Japan’s ninth-largest apparel supplier (USD 396 million, –17.4%), holding 1.5% market share—similar to 2024—and outside the top ten for US or EU exports. Apparel manufacturing has shifted from Malaysia to Vietnam, Myanmar, Cambodia, and others. Domestic assembly mainly serves ASEAN markets, benefitting from intra-regional trade advantages.

According to Malaysia-based sewing equipment suppliers like Dama Sewing Machine Trading, around 100 knitwear factories have fewer than 100 employees, about 10 employ 100–200, and around 10 exceed 200 workers. Sportswear factories in Selangor and Kuala Lumpur account for 65% of production.

Automation remains limited: over 70% of sewing machines in large and small factories are Japanese. Many machines are decades old and out of production, making spare parts scarce. Labor largely comprises migrant workers from Myanmar, Vietnam, Bangladesh, etc., as many locals avoid factory roles. A line may involve workers speaking multiple languages, and wages average around MYR 1,700/month (USD ~400).

Factories are now facing labor shortages and unsatisfied skill levels. The shift toward small-batch, quick-turn, and customized production (often 10–20-piece orders) has accelerated demand for user-friendly, automated machinery. The government has repeatedly called for accelerated automation to reduce reliance on migrant labor.

Surge in Sewing Machine Demand; Market Worth Nearly USD 100 Million

Malaysia is a significant end-user and re-export market for China’s sewing machinery. According to CSMA, exports to Malaysia rose 148.62% over the past decade. In 2024, China’s sewing machinery exports to Malaysia totaled USD 94.89 million (+56.64%), making it the tenth-largest export destination (2.77% of China’s total, up 0.68 percentage points):

Industrial sewing machines: 104,400 units (+82.72%), USD 47.13 million (+68.14%), average price USD 451.62 (–7.98%); Pre‑ and post‑sewing machinery: 32,900 units (+46.14%), USD 9.62 million (+77.72%), average price USD 292.20 (+21.61%); Spare parts: 1.146 million units (+25.18%), USD 7.76 million (–11.01%).

Furthermore, in 2024, Malaysia overtook the US as China’s largest market for household sewing machines priced over USD 22: 604,000 units were shipped (USD 26.37 million)—annual increases of 120.61% and 73.40%, respectively—accounting for 11.5% of China’s output (up 4.36 ppts). Average price dropped to USD 43.66 (–21.40%).

Malaysia also serves as a transit point: India imported USD 14.41 million worth of sewing machines from Malaysia in 2024 (+43.24%), representing 1.83% of imports, with industrial machines comprising USD 12.83 million (+38.25%).

Automation Upgrade Needed; Bright Outlook for Chinese Brands

No local sewing-machinery manufacturers exist in Malaysia, so 100% of equipment is imported—supported by strong distribution networks. Over 20 years, Chinese brands like Jack and Fushan have partnered with local distributors to challenge Japanese dominance, delivering reliable performance, efficient output, and attentive after-sales support.

Local buyers focus on cost-effectiveness. Aside from export-oriented factories tied to international brands, many are open to trying Chinese machinery. Barriers include brand inertia favoring Japanese, unclear brand regulations from export partners, limited upgrade intent, and capital constraints. Equipment downtime and long repair delays further slow adoption, and new equipment often fails due to a lack of technical support and training.

Jack introduced products to Malaysia since 2000, evolving from basic to computerized models, leading two market transformation waves. With rising labor costs, Jack’s automation solutions, digital system integration, and factory logistics equipment are poised to help Malaysian businesses reduce labor costs and boost productivity. The brand is gaining recognition among high-end local enterprises.

Since 2013, Fushan has also entered Southeast Asia, positioning itself in mid-to-high end segments. Its intelligent machines—featuring auto thread cutting, stitch beautification, low failure rates, and skill-light operation—have earned contracts with brands like Nike, Calvin Klein, and Boss. Fushan continues to expand in the region and aims to elevate the presence of Chinese manufacturing in higher-end markets.

NOHAD SON BHD in Selangor is Malaysia’s largest activewear manufacturer using fully automated cutting, sewing, and packaging equipment from Bruce and Tokka Penma since its 2015 establishment. Its management reports a clear shift toward small-batch, multi-style, on-demand production—often requiring “10 garments or 20 per order”—forcing equipment upgrades. More new factories are adopting Chinese equipment due to its reliability under 12–16 hour shifts and low downtime, boosting confidence in Chinese sewing machines.

Driven by information and digital advancements, China’s sewing machinery industry is rapidly improving product quality and after-sales service, advancing in single‑machine automation, production-line systems, and cloud platform management. Chinese manufacturers are ready to offer Malaysian businesses higher quality, ease of use, and cost-efficient solutions. As global supply chains restructure, some apparel firms are relocating to Malaysia, making it an important future production hub.

Going forward, CSMA will strengthen communication with Malaysia's MATA to explore deeper cooperation, establish information-sharing mechanisms, and enhance vocational training and standards collaboration. Chinese firms are encouraged to leverage “Belt and Road” and RCEP opportunities, deepen promotion of Chinese-made machinery, accelerate post-sales service response, and offer better, more efficient products—ultimately advancing integration and win‑win cooperation between China's sewing-machine and apparel sectors and Malaysia’s industry.