FW
Very soon China is expected to become the largest fashion market in the world. This rise in Chinese spending coupled with the new preference for Chinese brands is giving a boost to the country’s fashion and footwear makers. Many Chinese shoppers have typically viewed foreign brands as superior to home-grown labels. The mindset has begun to change, and more shoppers are starting to look to domestic labels.
Heilan Home is one of China’s biggest clothing companies, operating some 5,000 stores. Anta Sports is China’s biggest sports company. Both are now among the ranks of the world’s top performing fashion companies. Chinese companies are growing and becoming competitive in an industry long dominated by American and European businesses. The success of Anta and Heilan reflects shifting attitudes in favor of local brands by Chinese consumers, as local heroes increasingly compete with international high-street brands in areas such as value for money, innovation in design and quality, and customer service.
Chinese millennials and Gen Z are responsible for the lion’s share of luxury consumption globally. China is poised to reach a milestone that signals how the rebalancing of economic power in the world is reshaping industries with it. There is an ascendance of young shoppers and policies are encouraging shopping.
Between May and September 2019 India’s imports of viscose yarn were 195 per cent higher than the same period last year. In July 2019, imports were 342 per cent higher and August saw a 816 per cent rise. China and Indonesia have been dumping cheaper yarn into the country affecting the spinning industry severely. India is self-sufficient in yarn and does not need imports. While most spinning mills are running on lower capacity, some smaller mills in South India are facing a tough time. Availability of cheaper viscose yarn will also affect cotton yarn demand as fabric makers will use more viscose than cotton in their products. The industry wants an anti-dumping duty on yarn as well, the total tax incidence to be 15 per cent or at least 10 per cent on yarn to deter increasing imports.
But this will put the industry in a difficult situation. If yarn duties are increased, either fabric imports will go up or the entire value chain will become costlier, affecting the competitiveness of Indian products in the global market. But if the duties remain the same, imports will continue to impact the domestic spinning industry.
While the US-China trade war has slowed down the demand for viscose yarn globally, India has been witnessing dumping of viscose yarn.
Better Cotton Initiative (BCI) is releasing a revised version of Better Cotton Claims Framework. This follows a realization that the need for members to communicate about sustainability is growing and evolving and that the framework must evolve in parallel with growing market and consumer demands. The updated framework includes key changes that allow members to communicate about their sustainability efforts in a clear and compelling way, while at the same time ensuring that the information is accurate and credible. The latest version includes a new type of sustainability claim for eligible retailer and brand members. The Better Cotton Claims Framework is one of six components of the Better Cotton Standard System and equips members to make credible and positive claims about Better Cotton. The framework is an important tool that supports BCI’s efforts to drive demand by building market awareness of the production of Better Cotton in partnership with BCI members.
Better Cotton Initiative is a global non-profit. BCI also gives members the guidance they need to report on their achievements in a way that is credible and transparent. The BCI on-product mark – one-way retailer and brand members can communicate directly to their customers – now references mass balance directly in the required BCI logo. Customers wanting to know more about a member’s sustainability claims and about BCI can have access to more detailed information.
Africa hopes to have a thriving apparel manufacturing industry. The continent is poised to take on more production in the midst of global trade wars and rising wages in China. As the world is increasing barriers to trade, Africa is breaking them down. Once the Africa Continental Free Trade Area becomes operational, Africa will be the world's largest free trade area. More than 50 African nations will constitute a single market for goods and services. Right now, the manufacturing sector is only a small proportion of economic output for many African countries. Once the value chain is functioning properly, it has the potential to create hundreds of thousands, and even millions, of jobs in Africa.
While real progress is being made to loosen intra-African trade barriers, cross-country logistics remain an impediment. Shipping something from a country in West Africa to a country in East Africa, for instance, can be more expensive than importing a product from India or China. Outdated perceptions and stereotypes about manufacturing on the continent by international fashion industry counterparts continue to limit opportunities. Africa is equated with cheap manufacturing. Not all efforts to bring scale to upscale manufacturing on the continent have worked. Some labels, however, are seeing an opportunity that goes beyond mass production. They are working with local artisans, offering community groups a consistent, sustainable income, while showcasing local expertise.
Pakistan’s exports of readymade garments during the first four months of the current financial year grew by 12 per cent. Knitwear exports were up by 9.49 per cent. Bedwear exports were up 5.72 per cent. Textile exports were up 4.10 per cent. Exports of raw cotton during the period increased 0.78 per cent. Cotton carded or combed 100 per cent yarn other than cotton yarn grew by 21.24 per cent. However, exports of cotton yarn decreased by 2.14 per cent, cotton cloth by 4.83 per cent, and tents, canvas and tarpaulin by 1.58 per cent. The country’s merchandise trade deficit plunged by 33.52 per cent during the first four months of the current fiscal year. Exports during the period increased 3.81 per cent. On the other hand, imports of the country witnessed a decline of 19.21 per cent.
On a year-on-year basis, exports of the country increased by 6.75 per cent from October 2018 to October 2019. Imports declined by 15.14 per cent from October 2018 to October 2019. On a month-on-month basis, exports of the country increased by 14.41 per cent in October 2019 when compared to September 2019. On the other hand, imports into the country witnessed an increase of 7.64 per cent.
Ohio-based fashion retailer L Brands reported a fall in sales and bigger losses for the third quarter. It has confirmed that this year’s Victoria’s Secret Fashion Show will not be taking place. The fashion show, which aired annually since 1995, has been officially canceled this year.
The fashion show, which features top models called "angels" wearing lingerie, has seen a severe decline in viewership over the last several years. Last year, 3.3 million people turned up to watch the show, down from 9.7 million viewers in 2013. “We’ll be communicating to customers, but nothing that I would say is similar in magnitude to the fashion show,” said L Brands EVP and CFO Stuart Burgdoerfer, when discussing marketing plans for Victoria’s Secret over the holiday period. According to Burgdoerfer, the decision to forego this year’s fashion show is not expected to have a significant effect on Victoria’s Secret’s financial performance. “As timing over the years shifted in terms of the airing the fashion show, did we see specific material impact in terms of a short-term sales response to the airing of the fashion show? As a general matter, the answer to that question is no,” he stated.
The lingerie brand's parent company, L Brands is also planning to revamp the annual fashion by developing exciting and dynamic content and a new kind of event. Overall comparable sales fell 2 per cent, a decline of 7 per cent in comps at Victoria’s Secret, partially offset by a 9 per cent rise at Bath & Body Works, the consistent bright spot in L Brands’ portfolio.
India wants to increase textile and garment exports to Japan. India’s apparel exports to the US and Europe are much higher than that to Japan. But Japan has high quality standards. They trust products tested in and certified in their labs. And to match up, India is setting up testing labs in the country in partnership with a Japanese company. The certified products will then be co-branded.
Japan is a sophisticated market, leaning towards small-lot and short cycle delivery of supply. Consumption is diversified and quality expectations are very high. High quality and expensive Indian garments are gaining popularity in Japan. Customers like selecting garments that have a different character when compared with dresses and kimono worn for occasions like weddings and parties.
Japan is the third biggest apparel importer in the world. India’s contribution among apparel exporting countries to Japan is meager. Earlier, business transactions between the two countries were negligible. Currently, trade activities between the two countries are experiencing a sweeping change. The robust growth of the Indian economy has attracted Japan’s attention. Indian firms are also focusing on developing partnerships with Japanese firms to gain access to their fabric and apparel markets. There is a profitable market for cotton apparel in Japan. India is a good manufacturing base for cotton, and cotton based knitwear, and has good chances for market penetration.
Gap’s sales fell 2.2 per cent in the third quarter. The apparel retailer is focused on aggressively addressing the operational issues that are hindering the performance of its brands. Gap will not sell its Old Navy apparels in China from early 2020 and instead will focus on its North America market to boost sales. The retailer will separate its better-performing Old Navy brand, giving investors hopes that the standalone company will be able to show better results than the Gap brand. Gap’s shares have fallen 37 per cent this year.
The Old Navy brand has been spun off as a standalone company. Gap, Athleta, Banana Republic, Intermix and Hill City will continue to be operated together as part of one company, which will retain the Gap name. The company’s management structure will be slimmed down in order to speed up decision making as well as a refreshed senior compensation plan, based around performance and accountability. It is hoped that the split will allow Old Navy, a consistent bright spot at Gap, to focus on executing its growth-oriented strategic initiatives, while the other company resulting from the separation will be able to channel its resources into revitalizing struggling brands such as its flagship Gap label and Banana Republic.
Consumption of clothing, footwear and household textiles in the European Union annually uses 1.3 tons of raw material and over 100 cubic meters of water per person.
Production and handling of clothing, footwear and household textiles that were sold in the EU in 2017 used an estimated 1.3 tons of primary raw material and 104 cubic meters of water per person. About 85 per cent of these materials and 92 per cent of the water were used in other regions of the world. The production of clothing, footwear and household textiles for Europeans caused an estimated 654 kg of carbon dioxide equivalent emissions per EU capita, making textiles the fifth largest source of carbon dioxide emissions linked to private consumption. About three quarters of these emissions took place outside the EU.
Current EU policies require member states to collect textiles separately by 2025 and ensure that waste collected separately is not incinerated or sent to landfills. Circular business models in textiles, such as leasing, sharing and take-back and resale, need to be scaled up with the support of policies addressing materials and design, production and distribution, use and reuse, collection and recycling. This can include policies such as sustainable production and product policies, eco design and durability standards, green public procurement, safe and sustainable materials, waste prevention and extended producer responsibility, and labeling and standards.
Bangladesh’s garment exports to non-traditional markets fell 6.07 per cent during July to October 2019. Among these are: Chile, China, Japan, India, Australia, Brazil, Mexico, Turkey, South Africa and Russia. Presently, non-traditional markets contribute 15 per cent to Bangladesh’s export earnings. Traditional markets for Bangladesh are the US, Canada, and Europe. Breaking into new markets is something apparel makers dread because it takes a lot of effort and time and patience. However with cash incentives the country’s garment makers have started to explore new destinations and markets.
During July to October, Bangladesh’s apparel exports to China fell 18.80 per cent. However exports to India grew 12.40 per cent. One reason for this growth is that Bangladesh supplies to brands such as Zara and H&M which have established their business in India. Another reason is that the Indian domestic market has grown and the number of fashion conscious consumers has increased. In fact it’s a win-win for both countries as Bangladesh also imports raw materials for readymade garments such as cotton and machinery from India.
In general, Bangladesh’s apparel exports have suffered due to a sluggish EU economy, the trade tension between China and the US and devalued currencies in major competitor countries.
