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The apparel industry in Asia presents a fascinating picture of contrasting fortunes. While Bangladesh, Vietnam, and Sri Lanka have seen their garment exports soar in recent years, India, a traditional powerhouse in textiles, struggles to keep pace. This analysis delves into the reasons behind this disparity and explores potential solutions for India to reclaim its export dominance.
Why India lags behind
|
Country |
2021 ($ billion) |
2022 ($ billion) |
2023 (estimated, $ billion) |
|
|
India |
30.5 |
29.8 |
29 |
|
|
Bangladesh |
42.6 |
45.7 |
48 |
|
|
Vietnam |
39.7 |
44.4 |
48.5 |
|
|
Sri Lanka |
6.1 |
6.8 |
7.2 |
Despite having a strong domestic cotton industry and a large workforce, India's apparel exports are losing ground. Several factors are responsible for this.
Productivity gap: Bangladesh and Vietnam boast of higher productivity due to several factors.
Specialization: These countries focus on specific garment segments, allowing for efficient production lines and skilled workers. India's broader product range can lead to inefficiencies.
Investment in automation: Bangladesh and Vietnam are actively adopting automation technologies for cutting, sewing, and packaging, leading to faster turnaround times. India lags in this area. These investments and streamlined production processes, lead to higher output per worker. India's garment industry remains fragmented, with many smaller players relying on less efficient technologies.
Labor cost advantage: While wages are rising across Asia, Bangladesh still offers a significant cost advantage compared to India. This attracts buyers seeking value-driven apparel. Often perceived as having a labor cost advantage, India's edge is diminishing. Although base wages might be lower, factors like complex regulations, fragmented infrastructure, and lower skill levels can negate the cost benefit.
Table: Average Monthly Garment Worker Salary ($)
|
Country |
Salary |
|
Bangladesh |
190 |
|
Vietnam |
230 |
|
India |
250 |
Emerging market focus
There's a silver lining. While traditional markets like the US and EU remain important, a shift towards emerging markets like Southeast Asia and Africa presents an opportunity for India. These regions offer potential for growth due to rising disposable incomes and a growing middle class. All four countries are looking to tap into these new markets with their growing middle class and rising apparel demand.
Table: Export destinations
|
Country |
Traditional Markets (US & EU) |
Emerging Markets |
|
India |
65% |
35% |
|
Bangladesh |
70% |
30% |
|
Vietnam |
60% |
40% |
|
Sri Lanka |
80% |
20% |
The road ahead for India
To regain its competitive edge, India needs a multi-pronged approach. First, it needs to invest in skill development. Upgrading worker skills through targeted training programs can significantly boost productivity. Second is focus on modernizing infrastructure. Streamlining logistics and reducing bottlenecks can improve efficiency and lead times. Third, focus on automation as embracing automation in specific areas can help bridge the productivity gap.
And fourth, moving beyond basic garments and focusing on higher-value products can help India command premium prices. Fifth is streamlining regulations and simplifying labor laws and export procedures can attract investments and reduce operational costs.
India has the potential to reclaim its position as a leading apparel exporter. By addressing productivity gap, labor cost competitiveness, and focusing on strategic areas, India can capitalize on its raw material advantage and skilled workforce to regain its export dominance in the global apparel market.
Turkiye-based subsidiary of Eroglu Holdling, DNM Denim Company has received approval from Egypt-based Suez Canal Economic Board (SCZone) to develop two textile and apparel-related projects in the country with a combined investment totaling $40 million.
The first project entails the establishment of a jeans clothing factory across 62,000 sq m in the Western Qantara Industrial area. The factory will produce approximately 7.2 million units of jeans, of which 70 per cent will be intended for export and the remaining 30 per cent for domestic sales.
For this project, DNM will leverage locally-sourced raw materials from Damietta province, fostering regional economic integration, and create approximately 2,750 job opportunities.
The second project involves the development of an extensive industrial complex spanning 400,000 sq m for the production of yarn, textiles, clothing, mattresses, and furniture.
The SCZone's approval of these projects aligns with its broader strategy to encourage investment and economic growth in the region. In total, the SCZone has approved 125 new projects across various sectors, amounting to $2.56 billion in investments and anticipated to generate over 21,000 direct and indirect job opportunities.
Additionally, Egypt also plans to inaugurate the world's largest spinning and weaving factory, with investments worth$38 billion. Slated to commence operations in February, this factory will help Egypt's advance its textile industry and foster economic development.
Mall space in India is anticipated to rise by approximately 8 million sq ft this year with a substantiate portion is this anticipated to be concentrated in Hyderabad.
According to a report by Cushman & Wakefield, In Q1, 2024, leasing activity in Hyderabad improved by 45 per cent over the previous quarter to 491,000 sq ft.
This rise is particularly notable in key areas such as Banjara Hills, Nallagandla, and Kokapet, where average rentals have increased by around 15-25 per cent over recent quarters due to burgeoning demand.
Saurabh Shatdal, Managing Director, Capital Markets and Head-Retail, India, Cushman & Wakefield, notes, the Indian retail landscape is witnessing a noteworthy transformation with pre-commitment rates in Grade A malls rising and their vacancy levels reducing to single digits within a short span post-launch. This stands in stark contrast to the pre-pandemic scenario where malls typically took 4-5 quarters to achieve occupancy rates of 80-85 per cent. This trend is likely to persist, particularly in the case of superior malls, indicating a supply-constrained market, adds Shatdal.
The report highlights Delhi-NCR received nearly 0.26 million sq ft of leasing across malls and main streets in Q1, 24, followed by Pune at 0.19 million sq ft and Bengaluru at 0.18 million sq ft. Leasing activity across Chennai increased by 36 per cent Q-o-Q to 0.12 million sq ft, while Ahmedabad recorded a healthy main street leasing volume of 67,000 sq ft during the period.
As evident from the burgeoning demand for luxury and premium retail spaces, there has been a notable shift in India’s consumer behavior post pandemic. Recent NSSO data indicates, consumption expenditure of an Indian household has doubled over the past decade, with spending on discretionary items rising substantially as compared to mass products. This shift in consumption patterns is driving the demand for premium products and experiences.
Moreover, there is a rise in demand and year-on-year rental growth in prominent high streets across key Indian cities, with Hyderabad leading the rental growth. Ahmedabad, Bengaluru, Delhi-NCR, Pune, and Mumbai recorded rental appreciation ranging from 7-10 per cent on a year-on-year basis.
The report also reveals a notable decline in the vacancy rate of Grade-A malls across several cities, particularly in Delhi-NCR, Pune, and Chennai, in the first quarter. This decline is attributed to the absence of new Grade-A malls commencing operations during Q1 2024, contributing to a demand-supply imbalance to some extent. Notably, institutional-grade or listed developer assets boast very low vacancy rates in most major cities.
In order to thrive in the evolving landscape, luxury e-commerce platforms need to adapt their business models and strategies to meet the changing needs of post-pandemic consumers while also navigating competition from brands' evolving direct-to-consumer (DTC) omnichannel strategies.
The 'Voice of the Consumer: Lifestyles Survey' by Euromonitor International, conducted from January to February 2024, reveals a significant surge in apparel and footwear e-commerce sales during the pandemic, driven by restrictions and store closures.
However, as restrictions eased, in-store shopping rebounded, leading to a decrease in online sales share. This shift has posed challenges for luxury online players, compounded by a cost-of-living crisis, limiting discretionary spending, and increasing operating costs and interest rates, leading to diminished investor confidence.
During the pandemic peak, leading players like Farfetch and Matchesfashion experienced remarkable growth, but underlying weaknesses in their business models became evident once in-store shopping resumed and economic pressures mounted. For instance, Farfetch required a rescue by Coupang to avoid bankruptcy, while Matchesfashion was acquired by Frasers Group but later faced administration.
Luxury e-commerce platforms also face heightened competition from brands and store-based retailers' omnichannel strategies, which prioritize seamless integration between online and in-store experiences. Additionally, the thriving second-hand market, bolstered by platforms like TheRealReal and Vinted, presents further competition.
Despite these challenges, avenues for progress exist. For instance, Mytheresa has thrived by focusing on its most affluent clientele, employing targeted marketing efforts and offering exclusive experiences to high-spending customers. There's also an opportunity to engage with aspirational consumers by collaborating with luxury brands and embracing second-hand sales.
The future of luxury e-commerce hinges on adapting to changing consumer behaviors, strengthening relationships with top-tier customers, and embracing collaboration and innovation to stay competitive in a dynamic market landscape.
Roberto Cavalli, the iconic Italian designer who passed away on April 12, 2024, leaves behind a rich legacy. Cavalli was more than just a name; it was a brand synonymous with flamboyant sensuality, exotic prints, and a celebration of individuality.
Early innovations and rise to fame
Born in 1940, Cavalli's journey began not in fashion, but in textiles. His fascination with innovative techniques led him to invent a revolutionary printing process on leather in the early 1970s. This, coupled with his penchant for patchwork designs using diverse materials, garnered him immediate recognition. By 1972, he had established his first boutique in Saint-Tropez, France.
The Cavalli Signature: Boldness and animal prints
Cavalli's designs stood out for their audacity. He embraced animal prints – zebra, python, and leopard – becoming a pioneer in their widespread use in high fashion. His clothing wasn't just about covering the body; it was about making a statement.
A global fashion force
The Roberto Cavalli brand transcended geographical boundaries. His company website showcases a robust global presence with stores across the world. Celebrities like Jennifer Lopez, Victoria Beckham, and Sarah Jessica Parker have all donned Cavalli creations on red carpets, solidifying the brand's association with glamour.
A lasting impact
"Roberto Cavalli was a rockstar in the fashion world," said Donatella Versace, a fellow Italian fashion icon, in a recent interview. "His prints were legendary, and his understanding of how to make a woman feel confident and beautiful was unmatched."
Cavalli's influence extends beyond the realm of clothing. The brand offers a full lifestyle experience, encompassing accessories, fragrances, and even homeware. The Roberto Cavalli empire is a testament to the enduring power of his vision.
The future of Cavalli
Following Cavalli's passing, the creative helm of the fashion house rests with Fausto Puglisi, who has been associated with the brand since 2020. While it remains to be seen how Puglisi will shape the brand's future, Cavalli's legacy as a bold innovator and a champion of individuality is assured. His vibrant prints and audacious designs will continue to inspire generations of fashion enthusiasts to come.
In a move towards sustainable fashion, Swedish denim brand Madh has partnered with Italian producer Candiani Denim to introduce the first-ever jeans collection crafted from Europe-sourced, non-GMO regenerative cotton. This pioneering endeavor utilizes the exclusive Blue Seed cotton variety, developed by Candiani, heralding a new era in eco-conscious apparel production.
The cornerstone of this collaboration lies in the utilization of Blue Seed cotton, cultivated by Algosur in Andalusia, Spain, employing regenerative agriculture techniques. Candiani's exclusive access to this cotton variety facilitates meticulous traceability throughout the supply chain, ensuring transparency from cultivation to consumer.
Elevating quality and sustainability
Simon Giuliani, Candiani Denim's head of marketing, elucidated the unparalleled advantages of Blue Seed cotton. This non-GMO hybrid variety exhibits enhanced biological traits, resulting in fibers that are longer, more resilient, and of superior quality compared to conventional cotton. With a fabric 30 per cent more durable than generic counterparts, this innovation embodies a sustainable alternative to fast fashion.
Giuliani emphasized the imperative for innovation and sustainability in the contemporary fashion landscape. The collaboration between Madh and Candiani exemplifies a paradigm shift towards circularity and durability, eschewing the transient nature of fast fashion for enduring quality.
Martin Gustafsson, Madh's creative director, underscored the brand's commitment to redefining the norms of the denim industry. With a focus on longevity over seasonal trends, Madh advocates for timeless designs crafted from innovative, sustainable materials.
Pioneering partnerships for global impact
Madh's collaboration with Candiani Denim signifies a union of creativity and sustainability, with the latter's fabrics poised to become integral to Madh's identity. The collection will be available online, at select international retailers, and at the Candiani Denim Store in Milan, epitomizing a global commitment to sustainable fashion.
Gustafsson revealed plans for expanding Madh's reach, including partnerships with prominent retailers and online platforms. By prioritizing sustainability and quality, Madh aims to redefine the denim industry's narrative, one durable pair of jeans at a time.
Operating at the forefront of sustainable denim production, Candiani Denim's commitment to innovation is evident in their patent for Coreva, the first biodegradable, compostable stretch denim. Despite challenges in the fashion sector, Candiani remains optimistic about future growth, buoyed by remarkable performance in early 2024.
Towards a sustainable tomorrow
The collaboration between Madh and Candiani Denim represents a watershed moment in the fashion industry, signaling a departure from disposable consumerism towards a more sustainable ethos. With innovation and sustainability as guiding principles, this partnership paves the way for a future where fashion and environmental responsibility seamlessly coexist.
In a strategic move aimed at bolstering its performance amidst economic challenges, Lenzing AG has appointed Walter Bickel as a member of the Managing Board and Chief Transformation Officer, effective from April 15, 2024, until December 31, 2025.
Bickel's extensive leadership background in management consulting and industrial companies positions him as a valuable asset to Lenzing. With a proven track record in implementing yield increase programs at companies like Kuka, Treofan, and Syntegon, he is expected to further advance Lenzing's existing performance program.
Chairman of the Supervisory Board, Cord Prinzhorn, emphasized the importance of expanding the Managing Board to navigate the current crisis effectively. He expressed confidence in Bickel's ability to strengthen Lenzing's position and drive sustainable growth.
Bickel, in his statement, conveyed his enthusiasm to contribute to Lenzing's performance improvement, highlighting collaboration with the existing leadership team and employees.
CEO Stephan Sielaff welcomed Bickel's appointment, stating it would allow him to concentrate fully on core business operations while ensuring the continued success of the performance program.
The move underscores Lenzing's commitment to enhancing its performance and competitiveness amid evolving market conditions.
Techtextil 2024, the premier global trade fair for technical textiles and nonwovens, is set to witness Archroma's unveiling sustainable solutions aimed at empowering manufacturers to achieve advanced functionality while prioritizing eco-consciousness. Held from April 23 to 26 in Frankfurt, Germany, this event serves as a platform for industry leaders to showcase innovations driving sustainability and efficiency.
Archroma's Vice President of Product Marketing & Strategy, Dhirendra Gautam, emphasized the pivotal role of sustainability in today's textile landscape. He highlighted the shift where ecological responsibility seamlessly integrates with performance and profitability. This ethos underpins Archroma's commitment to "Planet Conscious+" innovation, epitomized by their latest offering: Super Systems+.
At the core of Archroma's showcase are the Super Systems+, comprehensive solutions amalgamating fiber-specific processing and intelligent effects. These systems encompass environmentally mindful wet processing solutions, durable colors, and functional effects, alongside cleaner chemistries, ensuring both ecological integrity and product longevity.
For automotive textile partners, Archroma presents Dorospers KHF, promising optimal build-up on polyester microfiber, catering to car interiors' aesthetic and functional demands. Additionally, in healthcare and filtration, the introduction of Appretan FFX6750 and Appretan FFX1540 underscores Archroma's commitment to high-performance, zero-formaldehyde solutions.
Innovations extend to workwear and uniforms with offerings like Helizarin Ultra-Fast and Albafix Eco Plus, emphasizing durability and fastness without compromising sustainability. Archroma's Phobotex R-ACE stands out for its PFC-free durable water repellent, preserving fabric integrity while meeting stringent sustainability standards.
Noteworthy is Archroma's dedication to biodegradable solutions, exemplified by Phobotex NTR-50, ensuring sustainability without compromising performance. Furthermore, Archroma introduces Arkophob NTR-40, a crosslinker derived from renewable plant-based materials, and OX20, an odor-neutralizing technology, affirming their commitment to environmental stewardship.
At Techtextil 2024, Archroma invites visitors to explore their booth at Hall 11, Booth B41, offering insights into cutting-edge sustainable textile solutions. Exclusive events such as "Leaving formaldehyde behind for a safer today" and "A world without PFAS–Achievements and limitations" provide a deeper understanding of Archroma's commitment to innovation and sustainability.
A leader in sportswear innovation, TechoSport has launched a new fabric range known as Cotflex.
Crafted by TechoSport's dedicated research and development team, this cutting-edge fabric represents a monumental breakthrough in performance wear. The fabric blends a unique fusion of yarns to deliver unparalleled comfort, performance, and adaptability. Sunil Jhunjhunwala, Co-Founder, TechnoSport, elucidates, TechnoSport's Cotflex technology seamlessly merges a mechanical stretch component yarn with a double UV protection yarn, providing a distinct cotton-like feel while upholding top-tier performance standards.
Setting itself apart from traditional fabrics, Cotflex presents a cotton-like tactile experience alongside exceptional durability and performance attributes. Here are some standout characteristics:
Cotflex offers a 4-way stretch, ensuring uninhibited movement without clinging, ensuring maximum comfort for any activity. Despite its modest thickness, Cotflex fabric is incredibly lightweight, granting wearers a sense of liberation and ease.
Engineered to swiftly absorb perspiration and dry rapidly, the fabric keeps the skin dry and comfortable, ideal for vigorous workouts or daily wear. It shields wearers from harmful UV rays, ensuring safety during outdoor pursuits.
Cotflex fabric integrates antimicrobial technology for cleanliness and odor control, while its anti-static properties repel dust, maintaining a pristine appearance.
Moreover, it features a unique memory function, swiftly rebounding from creases and wrinkles for a sharp and polished look with minimal effort. The fabric surpasses conventional materials, establishing a new benchmark for comfort and functionality, affirms Jhunjhunwala
In Q1 FY’24, Cambodia's export of garments, footwear, and travel products (GFTs) to global markets increased by 20 per cent to $2,941 million, from $2,449 million during the same period last year.
According to a report by the Ministry of Commerce, Cambodia’s exports during the year were dominated by apparel and textiles rose by 23 per cent to $2,167 million during the quarter from $1,759 million in the corresponding period of the prior year. Footwear exports by the country increased by 6.9 per cent to $346.3 million from $323.7 million.
Poullang Doung, Senior Economics Officer, Asian Development Bank-Cambodia, says, the GFT sector is the single largest foreign exchange earner for Cambodia. The sector presently comprises approximately 1,680 factories and branches, providing employment to around 918,000 workers, predominantly female, according to data from the Ministry of Labor and Vocational Training.
