The current pandemic has a profound impact on the apparel industry and related textile exports globally. The perception among the clothing and fashion industry that apparel manufacturers are not flexible enough proved wrong, as manufacturers responded to immediate needs (such as PPEs, masks & other medical overall) in really short times. The major issues happened at clothing retailers end exposing fashion brands vulnerabilities.
For sure current trends (both pandemic & non pandemic related) will change the industry forever in the next 2 years.
The traditional factors influencing the setup of any textile and apparel units are local cotton availability, power cost, and quality, wage cost, port connectivity, general infrastructure, government working proactively towards textile investment, and political stability.
This has resulted in three new emerging hubs in Africa Ethiopia, Kenya, and Ghana & Latin American countries like El Salvador, Honduras, and Haiti; besides traditional countries like Bangladesh, China, and Pakistan etc.
Currently, the sourcing, processing and manufacturing are dispersed for e.g. cotton from one country, spinning & weaving in a third country, cutting and trimming in a fourth which created a major production bottleneck during a pandemic.
Brands are realigning sourcing chains and moving towards fully independent nearshoring hub models for e.g. Africa for the European market, Asia for Asian retailers, and Latin America for the Americas.
It is not only the apparel industry that has been hit by the closure of retail chains but fashion accessories shops and clothing franchises are also struggling to stay afloat. The social distancing rules have forced companies to invest heavily in e-retailing and the trend is expected to grow only in foreseeable future.
Many fashion houses which were late in the curve are now on the verge of bankruptcy and looking for bailouts and restructuring. This will have ripple effect on supply chains and textile industry need to be ready for residual impact. On the positive side, a new trend has also given a boost to the emerging industry such as drop shippers, 3PL (3rd Party logistics) and fintech.
In January 2021 US and Canada introduced strict legislation pertaining to forced labour and export controls. These new policy guidelines are expected to have a severe impact on China especially the Xinjian Uyghur Autonomous Region (XUAR) of China where 90% of cotton is grown. It not only affects XUAR but all entities which have any affiliation with XPCC (Xinjiang Production and Construction Corporation). Apparel companies are fleeing China in record numbers to escape US sanctions. Other countries sourcing yarn, fibre and other raw materials from China are seeking alternatives.
Another policy action by the US which may impact the Vietnam market is the conclusive report by USTR on currency manipulation. Both these above actions have the potential to completely alter the apparel and textile industry export-import landscape.
Many textile exporters have diversified into related product lines such as hospital and healthcare supplies namely medical sheets, foot covers, head covers, medical scrubs and related PPE including face masks and gloves.
Apparel industry has diversified their production portfolio into leather accessories such as leather jackets for men, handbags and shoes, sportswear clothing, Carpets and rugs to sustain themselves and avoid sudden fashion changes.
Conclusion
Apparel Industry and trade promotion bodies like council of leather exports, apparel exports promotion council along with other associations like the Federation of Indian exporters organization have come together for a collaborative comprehensive approach to advise government bodies on policy requirements.
Government bodies are also looking at traceability to avoid overreliance on one single country for security reasons for e.g. the US found that 90% of PPE equipment imported by the United States is coming from China which created a dominant position for Chinese suppliers.
The above along with four factors changing the textile export landscape is definitely creating new markets to sell overseas. Want to know more on how to capitalize on these new opportunities send us a message on contact us.
