After the volatility of 2009, the global textile and clothing industry was in a recovery phase in 2010. With a CAGR of 2.6%, the worldwide garment industry expanded by 2.87% in 2009. The trend in garment consumption increased as a result of rising disposable income, low borrowing rates, improving consumer sentiment, and a slight increase in inflation.
The clothing manufacturers could not be saved by skills and traditions alone. In the industry, there were also layoffs and acquisitions. A rise in the cost of raw materials, currency appreciation, labour interruptions, floods, and many other events had to be endured by the industry. The article examines the key developments and trends that affected the global garment business in 2010. It also explores the topics that will shape it and projects future trends.
Worldwide Clothing Market:
China saw a 16.2% increase in clothing exports, the US saw an 8.4% increase, and Pakistan saw a 2.5% increase. The EU’s apparel exports fell by 3.9%. China’s apparel industry was robust as producers increased output while averting labour disputes. Raw material price increases, rising labour expenses, and rising RMB pose a challenge to Chinese businesses. In 2010, there was optimism in India’s apparel industry despite growing cotton costs. Bangladesh and China outperformed the country in terms of market success. Pakistan was able to provide high-quality clothing and textiles to the Western markets.
The garment industry in Sri Lanka was going through a dark period. Regarding workers’ rights, the United States agreed to evaluate the country’s GSP status. Although there were announced reductions in import customs and industry taxes, the textile industry was not given enough room to flourish. The fatal shocks dealt a severe blow to Haiti’s textile industry. The nation’s apparel industry, which was gradually establishing itself in American markets, was severely impacted. Due to minimum wages, there were widespread labour strikes in Cambodia. The nation is still scarred from the chaos that shook the world.
Retail Industry:
The retail apparel market expanded by 2.1% globally in 2009–10, and further 13.4% growth is projected. The apparel industry experiences continual trend changes as a result of shifts in fashion. In addition, nation-level performance in the international arena continues to change quickly. Retailers and manufacturers tried enticing tactics to get customers buying clothing. A greater emphasis was placed on in-store layouts and other elements that would provide customers with an engaging shopping experience.
According to estimations, 35.7% of the garment retail market worldwide was made up of womenswear. Women are becoming more and more in demand for casual clothes as the number of working women rises. Since they have more alternatives for clothing than men have, it has become a prerogative. Womenswear is more lenient in cities, with a predilection for branded clothing.
Global brands benchmark and examine a range of problems and opportunities. The cost of living and conducting business in the nation is the main factor. Of the 30 emerging markets included in the most recent Retail Development Index (GRDI), India is the most desirable location for retail investment.
While some clothing companies resorted to defensive measures like cost-cutting and shop closings, others moved quickly enough to take full advantage of the economic climate. Nike has stated that, in addition to selling things, it will concentrate more on producing them in the future. H&M has grown its operations globally, with the majority of its 220 locations located in the US and the EU. Having embraced e-commerce, Zara offered its products for sale online in France, the UK, Spain, Germany, and Portugal. Wal-Mart gave China, Mexico, and Brazil particular priority when it came to emerging markets. 2010 saw improved sales numbers for M&S.
Manufacturing Industry:
In response to the competition, a few clothing manufacturers entered the retail sector and merged with other clothing companies. In addition to producing clothing, they also outsource additional tasks including order fulfilment and warehousing. With the use of CAD technology, product life cycle management was developed and new styles quickly spread over the globe. The apparel business was able to keep up with the increasing competition and satisfy customer demands at a reasonable price point because to changes in the manufacturing sector.
Chinese, Indian, and Taiwanese clothing manufacturers are feeling upbeat about the 2010 recovery process and are sure that 2011 will see even more economic improvement. The trend of automation has also permeated the clothing sector. The apparel business has developed into an automated garment production sector that enables shorter run sizes to keep up with the fast changing fashion trends.
Chain Of Supply:
The strain of fast fashion retailing and technological advancements in the supply chain has become both believable and alluring in the apparel sector, as small quantities are provided extremely quickly. Choosing suppliers has become crucial for companies. It was challenging to compare vendor bids from within the company’s parent nation, but it had grown even more difficult to compare bids from a variety of international vendors.
Limiting the environmental impact of business has emerged as a commendable objective for numerous organisations. As organisations concentrate more on increasing the visibility, efficiency, and cost-effectiveness of their supply chains, creating a green supply chain has become increasingly popular. The idea of “greening the apparel supply chain” has grown to encompass a variety of aspects of the garment-making process, including the use of renewable and organic fibres, non-toxic fabric treatments, long-lasting garment design and colour selection, ethical labour practices, and ecologically friendly packaging materials. Notable sustainability programmers are associated with numerous globally recognised brands.
Sector Of Sourcing:
The development of new industries and the survival of established ones both depended heavily on sourcing. Today’s consumers are changing into global sourcing agreements in order to produce goods of a higher calibre and increase their cost effectiveness. Through increasingly varied locations, they can have a global network thanks to global sourcing. Global merchants increased their sourcing efforts in the Asian region, and this pattern is probably going to stay the same.
In 2010, China’s influence in sourcing operations grew. Because clothing was more affordable, the dragon nation’s factories were able to increase output. International businesses took a hard stance against China over its environmental policies to use less energy, water, and chemicals. Despite rising cotton costs and cotton yarn caps, India’s apparel industry was doing well, as seen by rising exports. Turkey was gaining international notice for its exports to the EU, Russia, and the Middle East. Human rights violations were a difficult situation for Bangladesh. The earthquake severely damaged Haiti’s garment industry, which was garnering recognition from throughout the world. The US updated Sri Lanka’s GSP status.
Social Responsibility Of Corporations:
Corporate social responsibility has grown to be important to the clothing sector. Sweatshops and other labor-intensive issues are putting a lot of strain on the apparel industry. Numerous well-known businesses in the US and the EU have implemented policies and initiatives in an effort to start their corporate social responsibility.
The process of sandblasting, which gives denim materials a worn-in appearance, carries health risks for workers because it exposes them to silica, an ingredient found in sand. H&M and Levi Strauss announced plans to implement a worldwide prohibition on sandblasting across all of their product categories. A handful more have agreements banning the practice with their subcontractors in Syria, Pakistan, and Egypt.
The Indian textile and garment products were flagged by the US Department of Labour for possible child labour during manufacturing. A unified compliance guideline for labour practices in the industry and an advise on child labour have been established by AEPC. Corporate responsibility should be ingrained in the organisation from the ground up rather than being an afterthought.
What’s Planned For 2011?
Large-scale growth is anticipated for the garment industry. Within the business sector, industry organisations will become increasingly significant. The worldwide apparel market is predicted to grow at a CAGR of 3.24% in 2011. By 2014, the European apparel market is projected to expand by 2.5% to reach USD 245 billion. North America and Asia Pacific will come after the EU. Indian clothing is regarded as a desirable product on the international market, and this trend is probably going to continue in the future.
The US and the UK want to use their offshore operations as a tactical tool. India and the Philippines will grow into important offshore locations and expand their offshoring sectors. Furthermore, multinational corporations will assess opportunities in other nations like Africa, Central America, and Latin America. The RFID market is projected to grow to be worth USD 5.63 billion, and 300 million RFID clothing tags will be needed.
Overall, the apparel industry grew at a rapid rate in 2010. However, there are still some obstacles facing the sector, including fierce competition from developing country importers, the need for quick order delivery to keep up with fashion trends, a greater emphasis on environmentalism, technological advancements, etc. The sector is expected to expand during the next few years. The garment manufacturers can increase their earnings by implementing innovative business models and competitive strategies.
