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The Indonesian textile industry plans to increase the export value of textiles and garments to $75 billion by 2030. The government recently launched the roadmap ‘Making Indonesia 4.0’ towards this. The term Industry 4.0 refers to the fourth industrial revolution in manufacturing and industry. The term strategy highlights the technological advancements, including the hi-speed internet, artificial intelligence, human-machine interface, 3D printing, robot and sensor technology, to boost industrial capacity and rapid change of production output.
RMG is one of the major priority sectors of Indonesia and the country can become a global leader under the roadmap, with manufacturing forecasts to account for 21 to 26 per cent of GDP by 2030, up from 18 per cent in 2016. It will create seven to 19 million new jobs by 2030 and that will contribute a sustainable GDP growth 1 to 2 percent.
To boost manufacturing activities, the government plans to target a series of major infrastructure projects, a supportive legal framework, and incentives for modern technology transfer and development under the ‘Making Indonesia 4.0 strategy’. To fulfill the transport and logistics demand, the government will construct 24 seaports, 3,258 km of rail lines, 2,650 km of new roads, 15 airports and mass rapid transit systems for six metropolitan areas.
The government is likely to hike import duty on about 300 textile products to boost domestic manufacturing and create employment opportunities. Additionally, it may also relax FDI norms for the sector. The products on which import duties are expected to increase include a few fabrics, garments and man-made fibres. The duties could be enhanced to 20 per cent from the current level of about 5-10 per cent. This increase in duties is likely to provide an edge to domestic manufacturers as the imported products are relatively cheaper. Increase in manufacturing will create jobs in the sector, which employs about 10.5 crore people.
In July, the Central Board of Indirect Taxes and Custom (CBIC) doubled import duty on over 50 textile products to 20 per cent, a move that is aimed at promoting domestic manufacturing. The imported products that have become expensive included woven fabrics, dresses, trousers, suits and baby garments.
Textile industry body has urged the government to push negotiations with China to give duty-free access to Indian cotton textiles. India exported $1,362 million worth of textile and apparel products to China in 2017-18, while the country's imports from China stood at $2,905 million, indicating a trade deficit of $1,543 million.
Indian products carry 3.5 per cent, 10 per cent and 14 per cent duty on yarn, fabric and made-ups, respectively. The country is losing business to nations like Vietnam, Indonesia, Pakistan and Cambodia who enjoy duty-free access to the Chinese market.
India's cotton yarn exports to China has decreased by 53 per cent in 2017 from 2013, while Vietnam's exports of cotton yarn to China has increased by about 88 per cent during the same period. Therefore, the textile industry body has urged the government to push negotiations with China to give duty-free access to Indian cotton textiles.
Clothing manufacturers have had a major impact on the development of industrial Britain. From the cotton mills of Manchester to luxury wool trade of Scotland, the UK was once an important producer of apparel in Europe, and the industry sustained thousands of families.
But like nearly all western countries, clothing manufacturing in the UK suffered a sharp decline with the rise of fast fashion and the industry’s subsequent dependence on high-quality factories in China and Southeast Asia. Unable to compete with cheap, plentiful labor, British factories soon fell into disrepair. But now, the UK is slowly finding its manufacturing feet again.
There has been a year on year growth in the number of textile and apparel manufacturing companies in the UK since 2014. Even high street retailers like Marks & Spencer have moved toward using some domestic production. On top of that, there has been a 25 per cent rise in the export of British-made clothing since 2011. That has risen to 30 per cent since Brexit in 2016, as companies attempt to insulate against the coming adverse effects.
Established labels like Burberry and Alice Temperley have used the Made in Britain tagline for years, ensuring it’s synonymous with high-end, well-tailored luxury. But with the arrival of cutting-edge designers, it now has the cool factor, too.
The revealed comparative advantage (RCA) of clothing industry of Bangladesh is high compared to major global competitors like China, Vietnam and India. The RCA of Bangladesh in the apparel industry was around 24 points in 2000, which increased to 29 in 2015.
Bangladesh’s high revealed comparative advantage in garments reflects the growing share of garment industry in its overall export basket. The RCA is a measure of the relative market share computed as the ratio of a country’s share in world exports of a particular item to that of the country’s overall share in world exports of all items.
However, India’s RCA in the apparel industry declined to 2.38 in 2015 from 4.47 in 2000. Since India’s liberalisation more than a quarter century ago, India’s share in the global exports of textile and footwear has declined even as smaller economies such as Bangladesh and Vietnam have seen their market shares rise sharply.
In the US market, India’s apparel exports accounted for only four per cent of US’ overall apparel imports in 2015, while Vietnam, Bangladesh and China accounted for 12 per cent, six per cent and 37 per cent market shares respectively.
Sourcing Expo will be held in Australia from November 20 to 22. It will host nearly 700 textile, apparel and footwear manufacturers and agents from 16 countries. The expo is recognized as a unique sourcing event for members of Australia’s fashion trade but it’s also a fantastic networking event that gives locals an opportunity to rub shoulders with global leaders in the industry.
This year’s show will feature a wider range of clothing and footwear than previously seen. The show will offer fashion buyers and designers the full spectrum of product and service offerings from off-the-shelf clothing through to made-to-order pieces, fabrics and functional textiles. It will attract sourcing managers for Australia’s large fashion retailers, niche fashion brands, online outlets and designers. Sourcing Expo is for anyone looking to improve or diversify their supply chain and product offering, compare production capability and costs, produce their own label or start a new sourcing business.
Exhibitors will be drawn from India, China, Bangladesh, Pakistan, Hong Kong, Fiji, Indonesia, Vietnam, South Africa, Taiwan, Turkey, Australia, South Korea, Malaysia and Singapore. Alongside all the fashion staples like jeans, active wear and T-shirts, International Sourcing Expo exhibitors surprised visitors with more upmarket fashion last year.
As per Ministry of Textiles, India possesses a great potential to become the next one stop sourcing destination for ASEAN brands and retailers. The country offers a number of competitive advantages including abundant amount of raw materials, trained man-power as well as the presence of entire textile value chain. Moreover, 100 per cent FDI is allowed in the textile segment under automatic route.
The government recently announced a special package for apparels as well as made-up sectors. The packages include various offerings such as labour law reforms, additional incentives under Amended Technology Upgradation Scheme, improved duty drawback coverage and relaxation of Section 80JJAA of Income Tax Act. Likewise, the rates under the Merchandise Exports from India Scheme (MEIS) have been enhanced from 2 per cent to 4 per cent for apparel and made-ups sector, active since 1st November 2017.
The government is also giving subsidised interest rate for pre and post shipment credit for the textile segment; and supporting exporters under Market Access Initiative (MAI) Scheme. Products like fibre, yarn, and fabric are made feasible through schemes like Powertex for fabric segment, ATUFS for all segments except spinning and Scheme for Integrated Textile Parks (SITP) for all segments.
"Forecasting firm Trendalytics has reported the evolution of streetwear from its start as a 1970’s California social movement defined by the laidback surf style of Shawn Stussy, the founder of Stüssy, into a mainstream global category estimated to be valued at $309 billion. That evolution has been fuelled by influencers—be it celebrities, athletes or the masterminds behind hype machine brands like Ronnie Kith and Virgil Abloh and the prevalence of social media as a branding tool for both brands and individuals. According to the firm, as digital natives with significant spending power, the millennial and Gen Z consumers have played an integral part in driving the growth of streetwear. The hunt continues for the most Instagrammable products, and consumers looking for unique and exclusive items are willing to pay."
Forecasting firm Trendalytics has reported the evolution of streetwear from its start as a 1970’s California social movement defined by the laidback surf style of Shawn Stussy, the founder of Stüssy, into a mainstream global category estimated to be valued at $309 billion. That evolution has been fuelled by influencers—be it celebrities, athletes or the masterminds behind hype machine brands like Ronnie Kith and Virgil Abloh and the prevalence of social media as a branding tool for both brands and individuals. According to the firm, as digital natives with significant spending power, the millennial and Gen Z consumers have played an integral part in driving the growth of streetwear. The hunt continues for the most Instagrammable products, and consumers looking for unique and exclusive items are willing to pay.
A global phenomenon
Today, streetwear has become the urban uniform for people in New York, Tokyo, London and more. A new breed of cities are emerging which is lifting the
growth of streetwear globally. These are Kazakhstan, Iceland, South Korea, etc. Kazakhstan, companies are quite fast in producing fakes by painting jean jackets, scribbling on white sneakers and making spoofs of popular logos. Iceland has all the vintage look and feel. Classic skate brands like Thrasher and Stüassy are paired with retro furry jackets and sweaters. In Nigeria, streetwear is a blend of Western fashion like jeans, T-shirts and Vans, and native elements like brightly colored and patterned cotton textiles.
In South Korea and Mexico, they have punk and rock undertones. Combat boots, leather jackets and piercings make up streetwear in Korea, while Mexico skews toward goth pieces, logo T-shirts and hats. Meanwhile, streetwear in the United Arab Emirates reflects hip-hop’s affinity for luxury brands. The report named side bags, snapbacks and colored sunglasses as key items.
Social media and influencers
In such a burgeoning growth, social media has a major role to play. Instead of relying on endorsed posts, important streetwear labels like Vetements, Bape and Palace Skateboards saw the most engagement from their own brand postings, Trendalytics said. The report highlighted that streetwear brands like Fear of God and Undefeated received nearly four-times the social actions per mentioned post than Adidas for the last year. While millennial celebrities like Zayn Malik, The Weeknd and Ansel Elgort have the highest total social post engagement from their branded posts, Trendalytics said top influencers gaining social buzz include surfers Laura Enever and Kelly Slater, each capturing more than 10-times the engagement per mentioned post than Kanye West.
Luxury marrying streetwear
Trendalytics stated that ’80s artist Jean-Michel Basquiat was known for combining high and low aesthetics by pairing streetwear and thrift store finds with formal wear, a style that still inspires streetwear influencers like Jay-Z and Kanye West. Meanwhile, Japanese artist Takashi Murakami has a developed new fan bases through his long-running and colorful collaborations with Louis Vuitton and subsequent artwork collaborations with artists like Kanye West and Kid Cudi. The artist is also working with streetwear labels like Billionaire Boys Club. The impact of streetwear on luxury cannot be understated and that influence is poised to grow as the spending power of streetwear-loving millennials surpasses older generations. Luxury brands are prepping up for this shift by attracting young designers with streetwear roots.
Sneakers have become the new ‘It’ bag and brands are leveraging their popularity to appeal to the affluent, pro-consignment consumer. In appealing to millennials who came of age during the Great Recession, luxury is able to channel the appeal of appreciation, which they had already mastered with handbags, to sneakers.
The current political tumoil in Nicaragua is affecting the apparel sourcing sector in the country with 30 per cent small and medium size textile and clothing companies operating at only 25 per cent capacity. As per Chamber of Industries of Nicaragua, this has led to temporary suspension of nearly 80 per cent workers in the sector.
Import volume of yarns and textile supplies, between the first quarter of 2017 and the same period in 2018, fell 8 per cent to 32,000 tonne. Import value during this period declined 10 per cent to $127 million.
Nicaragua is seen as a shining star among the Central American counties that are part of the Central American Free Trade Agreement. This year till May, imports of textiles and apparel from the country to the US were up 9 percent in value terms $647.93 million. On volume basis, industry imports rose 9 per cent to 239.64 square meter equivalents.
Expert fire and building safety engineers have made working conditions in Bangladesh’s readymade garment factories safer. Reasonable health and safety measures were taken. The aim was to ensure workers need no longer fear fires, building collapses, or other accidents. Brands were made to take responsibility for making their supplier factories safe, and pay towards it too.
However, life-threatening hazards at supplier factories remain. Severe anti-union violence and discrimination continues in Bangladesh often making it impossible for workers to organise and bargain collectively. This is why more than 180 brands have signed the new 2018 Transition Accord, which covers approximately two million garment workers in Bangladesh, most of whom are women.
The 2018 accord has greater scope to cover home textiles and footwear and, crucially, gives more power to workers. The new agreement meets OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector, recognising that workers are not peripheral to the due diligence process, but core to it. It upholds the importance of freedom of association in ensuring workers have a genuine say in protecting their own safety. It will also establish a training and complaints protocol to ensure that this right is respected.
