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A new study by the International Finance Corporation (IFC) and LightCastle has sparked a debate in the Bangladeshi garment industry: Can e-commerce platforms directly connect manufacturers with Western consumers, cutting out middlemen and boosting profits? The research suggests immense potential, with an estimated $489 million in additional revenue by 2027 across the US, EU, and Africa.
However, while Bangladesh's story is compelling, it's not the only one. Manufacturers in Vietnam, another textile powerhouse, are increasingly turning to e-commerce platforms like Alibaba and Amazon to sell directly to consumers. Vietnamese firms like Sacomtex and Vinatex are building their online presence, offering customized clothing and competing with established Western brands.
Building a virtual bridge
The shift to e-commerce presents both challenges and opportunities. Establishing international warehouses closer to target markets, streamlining customs and logistics, and navigating complex banking regulations are all hurdles to overcome. However, the potential benefits are significant. And these include: reduced costs, shorter lead times, and direct access to consumer preferences.
The IFC study identifies several key benefits of e-commerce for Bangladesh garment manufacturers:
• Reduced lead times: Bypassing traditional intermediaries can streamline the process, leading to faster delivery and happier customers.
• Cost-effectiveness: Cutting out middlemen translates to lower prices and potentially higher profits for both producers and consumers.
• Simplified business procedures: Online platforms can streamline international trade complexities, making it easier for Bangladeshi suppliers to reach global markets.
• Direct access to consumers: E-commerce allows brands to connect directly with end consumers, fostering brand loyalty and providing valuable market insights.
Turkey's success story
Turkey's ‘Made in Turkey’ platform offers a promising example. Launched in 2019, it connects Turkish apparel manufacturers with global buyers, eliminating intermediaries and showcasing diverse product offerings. The platform has fostered increased exports and brand recognition for Turkish textiles.
India too has tried this path. The ‘Make in India’ initiatives are promoting online marketplaces for Indian apparel, tapping into the country's rich textile heritage. These examples highlight the potential of e-commerce to empower garment-producing nations, fostering economic growth and job creation.
The garment industry in Bangladesh, and other developing nations, needs government support to navigate the e-commerce transition. Streamlining customs procedures, facilitating cross-border payments, and fostering digital literacy among manufacturers are crucial steps. Bangladesh's BGMEA president, Faruque Hassan, advises simplified trade regulations and policy support to empower local entrepreneurs to establish virtual marketplaces.
E-commerce: A future beyond garment exports
The potential of e-commerce extends beyond the garment industry. As Hassan rightly points out, virtual platforms can empower manufacturers in various sectors to reach international markets. From furniture and handicrafts to agricultural produce, e-commerce offers a direct route to consumers, bypassing traditional trade barriers and empowering producers in developing economies.
The road does throw up numerous challenges. These include:
• Policy hurdles: Streamlining customs, port, and banking regulations is crucial to facilitate smooth online transactions.
• Logistics complexities: Establishing international warehouses and navigating the Red Sea shipping impasse require innovative solutions.
• Digital infrastructure: Building a robust e-commerce ecosystem requires investment in technology and digital skills.
While challenges remain, the potential of e-commerce for apparel exports is undeniable. Manufacturers in Bangladesh, Vietnam, and beyond must adapt to the digital landscape, embrace new technologies, and collaborate with governments and industry partners to build efficient virtual marketplaces. This not only holds the promise of increased profits but also empowers producers, promotes fair trade practices, and ultimately shapes a more equitable global marketplace.
The H&M Hennes & Mauritz AB board of directors has made a significant leadership change, appointing Daniel Erver as the new President and CEO of the H&M group. Erver, who brings 18 years of experience within the company, notably as the head of H&M, replaces Helena Helmersson, who has decided to step down from her role.
Acknowledging Helmersson's pivotal role in steering the company through tumultuous times marked by the pandemic and global economic shifts, Karl-Johan Persson, Chair of the H&M group, expressed gratitude for her leadership. He emphasized the positive profitability trend and the company's strong position for further growth in 2024.
In assuming the CEO position, Daniel Erver pledges to uphold the company's commitment to delivering value, growth, and sustainability to its customers. With a diverse background within H&M, including roles in merchandising, country management, and purchasing, Erver's appointment signifies the board's confidence in his ability to lead the company forward.
Helena Helmersson, with 26 years of service at H&M, reflected on her journey within the company, expressing mixed emotions about departing from the CEO role. Despite the challenges faced during her tenure, she emphasized her pride in the company's achievements and its enduring strengths in brand identity and sustainability.
Daniel Erver, aged 42, started his journey with H&M as a summer trainee in 2005, eventually advancing to leadership positions within the organization. Armed with a Master's in Business Administration, his appointment underscores the board's confidence in his leadership abilities to navigate the company towards continued success.
As Helmersson prepares for her departure, she ensures a smooth transition while contemplating her next steps beyond H&M, leaving behind a legacy of resilience and dedication to the company's mission.
At a summit uniting Turkish apparel manufacturers, global brands, and purchasing groups, Mustafa Gültepe, President of TIM and IHKIB, emphasized the pivotal role of European and US markets in achieving a $40 billion export milestone. Gültepe highlighted that Turkey exports 60% of its apparel to EU countries, a figure that climbs to 75% when considering other European nations and the USA. He underscored the industry's strategic importance for the Turkish economy and emphasized the need to intensify efforts in these key markets.
The summit, themed 'Green Transformation,' convened stakeholders to discuss initiatives aligning with the Green Deal. Gültepe's address emphasized Turkey's status as a global apparel player and outlined plans to double current annual exports to $40 billion, with a clear focus on European and American markets. He emphasized Turkey's competitive edge in design, production quality, and geographical proximity to these markets.
Furthermore, Gültepe urged global brands not to solely prioritize pricing but to consider sustainability and partnership longevity. He emphasized Turkey's commitment to integrating sustainability into its advantages and called for collaborations grounded in sustainability principles.
Following Gültepe's remarks, presentations by key figures such as Euratex Director General Dirk Vantyghem and Deputy Director General of the Ministry of Trade Bahar Güçlü delved into sustainability strategies and legal implications of the Green Deal. Deputy Secretary General of ITKIB, Özlem Güneş, highlighted the opportunities the Green Deal presents for Turkey's apparel industry and outlined IHKIB's efforts in adapting to its requirements.
The summit underscored Turkey's strategic imperative to leverage its strengths in the apparel sector, particularly in sustainable practices, to secure growth in lucrative markets. Gültepe's call for collaboration based on sustainability signals a proactive approach to industry challenges, positioning Turkey as a key player in the global apparel landscape.
In an unprecedented partnership, the inaugural Pure London x JATC show, part of the London Festival of Fashion, is set to shine a spotlight on Romanian fashion excellence. Teaming up with the Romanian Contemporary Jewellery Association (FRDVA), the event will showcase an innovative lineup of Romanian fashion brands at Olympia London from February 11 to 13, 2024.
Renowned for its superior craftsmanship and burgeoning talent pool, the Romanian textile market is gaining international acclaim. Bolstered by the support of FRDVA and the expertise of the Pure London x JATC team, participating brands are primed to make a significant impact on the UK fashion scene.
Ligia Stan, President of FRDVA, expressed confidence in the Romanian designers' preparedness, emphasizing their unique approach to fashion. Among the highlights are A&A Vesa's luxury outerwear blending utility with elegance, LEONARD's timeless ready-to-wear collection, and Monarh's dedication to sophistication and refinement.
The event also spotlights sustainability with brands like Hamza, Concept Nature, and Single Dual, offering eco-friendly and innovative designs. Moreover, visitors can expect a diverse range of styles from Nissa, Aleksandar Reva Atelier, and others, showcasing the richness of Romanian fashion.
Nihat Berktas, International Development Manager at Pure London x JATC, highlighted the success of preparatory sessions for Romanian designers, signaling their commitment to penetrating the UK market.
With over 300 brands and attendees from 85 countries, Pure London x JATC promises to be a global platform for fashion innovation, aligning perfectly with the ethos of the London Festival of Fashion. As the industry eagerly awaits the event, it's clear that Romanian fashion is poised to make a lasting impression on the international stage.
SEAMS, the leading advocate for the U.S. Sewn Products Industry, has unveiled its 2024 Board of Directors, marking a pivotal moment in its 50-year history. Amidst the burgeoning demand for "Made in America" goods, SEAMS President Britt Moore emphasized the Board's commitment to championing domestic manufacturers. Acknowledging the challenges ahead, Moore praised outgoing leader Ron Roach for his visionary stewardship.
The new Board comprises seasoned professionals representing diverse sectors of the supply chain, poised to navigate the industry's evolving landscape. Notable additions include Xochil Herrera Scheer, bringing fresh perspectives from The Chicago Pattern Maker, and Brian Alhanati and Steven Hawkins, injecting dynamism from Custom Fab USA and America Knits, respectively.
With a robust lineup of industry-focused events and two SEAMS conferences slated for 2024, the Board aims to bolster membership and foster innovation. The appointment of Will Duncan as Executive Director underscores SEAMS' commitment to strategic leadership.
As SEAMS embarks on its next chapter, the stage is set for collaborative action to propel the U.S. sewn products industry to greater heights in the global marketplace.
In response to escalating climate concerns, shifting consumer preferences, and tightening regulations on eco-design, the European Flax-Linen industry is emerging as a pivotal player in fostering sustainable practices within the fashion and lifestyle sectors. Spearheading this transformative journey is the Alliance for European Flax-Linen & Hemp, committed to elevating European Flax-Linen and Hemp as premier sustainable fibers globally. With a strategic focus on expanding its ecosystem, fostering innovation, and ensuring top-notch quality, the Alliance is intensifying its efforts, particularly in Italy.
Leading the charge in Italy is Giusy Bettoni, appointed as the official representative of the Alliance in early January 2024. A stalwart in textile value chains with a profound understanding of raw materials and CSR, Bettoni brings her expertise to bolster the Alliance's presence in the Italian market. As the founder of C.L.A.S.S (Creativity Lifestyle and Sustainable Synergy), Bettoni has long championed sustainable fashion, advocating for a paradigm shift towards responsible and competitive businesses.
In collaboration with industry stakeholders, Bettoni aims to develop a comprehensive promotional strategy targeting both business-to-business and business-to-consumer segments. By positioning European Flax-Linen as a benchmark in economics, innovation, and corporate social responsibility, the Alliance seeks to enhance its visibility and relevance in Italy's vibrant textile landscape.
Moreover, Bettoni's appointment underscores the Alliance's commitment to fostering knowledge exchange and skill development among the younger generation. With Ornella Bignami of Elementi Moda as the designated training liaison, the Alliance continues its legacy of nurturing future leaders in the Flax-Linen industry.
As Italy emerges as a key battleground for sustainable fashion, the Alliance for European Flax-Linen & Hemp, under Bettoni's stewardship, is poised to drive meaningful change, advocating for a more sustainable and ethical future in fashion and beyond.
Australia's woolen yarn imports dipped in November 2023, mirroring the previous month's trend. While tonnage remained flat at around 158 tons, the value shrunk to $1.7 million, marking a noticeable contraction. This follows a period of volatility, with the highest monthly growth recorded in March at 20% and August at 28%.
New Zealand remains the undisputed king of Australian woolen yarn supply, accounting for a staggering 68% of total imports with 107 tons in November. This dwarfs the second-largest supplier, India, at just 9.8 tons.
However, even New Zealand's dominance isn't without cracks. Both volume and value growth rates for imports from New Zealand have slowed over the past year, averaging -3.6% and -2.9% per month, respectively.
The type of yarn imported also paints a picture of shifting preferences. Yarn of carded wool, not put up for retail sale, was the clear favorite, claiming a 76% share at 119 tons. This preference for carded wool held true in value terms as well, with $958,000 representing 56% of total imports. In contrast, yarn of combed wool, not put up for retail sale, saw a decline in both volume and value, coming in at 23 tons and $403,000, respectively.
The average import price in November stood at $10,911 per ton, down slightly from the previous month. However, the broader trend has been relatively stable, with the peak price of $13,806 reached in February 2023. Interestingly, significant price variations exist between major suppliers.
In November, China topped the charts with a hefty $21,839 per ton, while Portugal offered the most budget-friendly option at $7,766 per ton. Notably, India was the only major supplier to experience positive price growth in the past year, at +3.8%.
While overall imports are down, specific segments like carded wool remain strong. Additionally, the dominance of New Zealand remains unchallenged, but their growth trajectory is flattening.
Price fluctuations and variations between supplier countries add another layer of complexity. Only time will tell how these trends unfold in the coming months.
India's cotton yarn industry is projected to witness a robust 12-14% growth in FY24, fueled by a remarkable 85-90% jump in exports. This increase is attributed to a shift in sourcing preference from China and rising demand for spring/summer textiles in the US and EU. However, a significant drop in cotton prices is likely to cause a 9-10% decline in revenues, impacting domestic demand.
In the first seven months of FY24, yarn exports soared by 142% compared to the previous year, driven by increased shipments to China. This has pushed the share of exports in overall production from 19% to 33%. Bangladesh, China, and Vietnam remain the biggest buyers, accounting for 60% of Indian yarn exports.
While the ongoing Red Sea conflict poses no immediate threat, its prolonged escalation could impact apparel exports and subsequently harm domestic and export demand for cotton yarn.
Domestic cotton prices, after hitting record highs in H1 FY23, have steadily declined due to a weak market. Production is also expected to dip by 6% in 2024 due to reduced acreage and uneven rainfall. These factors suggest a marginal increase in cotton prices from current levels.
Yarn prices have mirrored the downward trend in cotton prices, further impacted by weak demand from downstream apparel companies. ICRA predicts continued softness in yarn prices for the rest of FY24, with a slight uptick in FY25 driven by potential recovery in downstream demand.
Despite the volume increase, spinners will see a 9-10% decline in operating income and a 200-240 basis point drop in operating margins due to lower realisations and reduced gross contribution. However, investments in in-house power generation by some players may offer some relief in the medium term.
The industry witnessed a rise in debt-funded capex in FY22 and FY23, partly due to pandemic-related deferments. Now, with weak demand and lower realisations, spinners are holding off on major expansions. However, ICRA expects a pick-up in capex announcements by FY25, driven by modernization needs, the "China Plus One" strategy, and potential improvement in domestic apparel demand.
This news paints a picture of a vibrant export market for Indian cotton yarn, counterbalanced by domestic challenges due to falling prices and subdued demand. The industry's future hinges on navigating these contrasting trends and adapting to shifting global dynamics.
Textile exports are booming thanks to declining cotton prices, but a twist has thrown a wrench in the works. Earlier orders placed at higher prices are now facing delivery complications as buyers demand discounts.
Hundreds of containers, including denim and spinning waste, are stuck in limbo. Buyers cite lower cotton prices and payment issues as reasons for withholding delivery. This is impacting mills in Gujarat, where spinner capacity has hit 80%, with export orders and domestic demand rising.
The Spinners' Association Gujarat (SAG) highlights the plight of spinning waste shipments, used in denim, carpets, and towels. About 250 containers, largely from Gujarat, are stranded due to buyer resistance. Vietnam is a major bottleneck.
While new orders at lower prices are flowing in, SAG reports existing buyers seeking discounts before taking delivery. The denim sector is particularly hit, with around 100 containers from Gujarat facing buyer-induced delays due to payment issues.
Exporters are urging the government to establish a legal support mechanism for such situations, calling for an agency to assist in navigating disputes with foreign buyers over price-driven delivery refusals.
In short, a cotton price drop brought unexpected hurdles to textile exports, highlighting the need for resilience in dealing with market fluctuations.
In a transformative move for the knitting industry, the introduction of the Create Design software solution promises to revolutionize the development and design process for knitwear, significantly expediting the journey from concept to market launch. Boasting a suite of sophisticated features, including Shape & Grading functions, a diverse toolkit for digital structure development, a color generator, and flexible yarn creation options, Create Design offers unparalleled speed and efficiency.
Recent demonstrations at prestigious industry events such as Munich Fabric Start and Pitti Filati have generated significant interest, particularly among fashion and knitwear designers. Goran Sidjimovski, a Technical Designer at KM.ON and STOLL, highlights the software's appeal: "Create Design enables rapid digital design variations without the need for immediate prototyping."
To equip professionals with the skills to leverage this groundbreaking technology, online courses conducted by Sidjimovski have been announced for 2024. Scheduled throughout the year, these courses offer hands-on training in utilizing Create Design effectively. The upcoming dates are as follows:
1. February 28th and 29th (registration deadline: February 7th)
2. May 8th and 9th (registration deadline: April 17th)
3. July 17th and 18th (registration deadline: June 23rd)
4. October 16th and 17th (registration deadline: September 25th)
Sidjimovski emphasizes the accessibility of the software and the courses, welcoming participants of all skill levels. Upon completion, attendees are equipped to seamlessly integrate Create Design into their professional workflows, marking a pivotal advancement in the evolution of knitwear design.
