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As clothing sales decline, Japanese apparel companies are diversifying into new fields such as martial arts fitness, boutique hotels and fresh food. Tokyo-based Jun Co, which owns brand Rope, has partnered with American sportswear company Nike Inc in 2015 to create the Nergy brand, which offers sportswear with trendy patterns, as well as martial arts uniforms made from thinner fabric that are easy to wear.
Similarly, TSI Holdings, a Tokyo-based golf clothing brand, in November 2017 opened Groove Zone to offer cycling fitness classes. Okayama-based Stripe International Inc, which owns the casual Koe brand, opened a combination apparel-accessory shop, hotel and restaurant called Hotel Koe Tokyo in Tokyo. Tokyo-based Ryohin Keikaku Co, which owns the Muji brand, has opened a store to sell fresh food in Sakai. The company plans to open a combination hotel-flagship store in Tokyo’s Ginza district next year.
According to a household survey by the Internal Affairs and Communications Ministry, Japan’s average spending on clothing was ¥46,291 in 2017, down 20 per cent from 10 years ago. The apparel market in the country is shrinking, due in part to the declining population and the rise of apps that let people sell their own items.
Intertextile Shanghai Home Textiles will be held from August 27 to 30. This is a trade event covering the entire spectrum of the home furnishing industry like home textile products, furniture fabrics, decorative fabrics and curtain fabrics. Product categories include digital printing, curtains, furniture leather and carpets and rugs.
US brand Lutron, one of the global leaders in the lighting control industry, will offer a wide selection of energy saving dimmers and lighting control solutions. French group Somfy will display automatic control of openings and closures in homes and buildings. Jiangsu Mingcheng from China, an expert in sun-shading and energy-saving technology, will show products allowing users to control curtains by computer, remote, mobile applications.
Carpet Export Promotion Council from India will make its debut at Intertextile Shanghai, organising a pavilion with seven exhibitors who produce hand-knotted wool and silk carpets. Garment and textile machinery expert Global Fortune will introduce its latest advanced textile solutions to the industry.
Kornit Digital, the leading digital textile printer, will showcase its Kornit Allegro system which combines printing and drying in a single step. The system eliminates unnecessary machineries, shortens production time and is widely applicable on multiple fabric types. Leatech will showcase 3D simulation software that allows flexible design and efficient production.
Garment Technology Expo (GTE) was held in Bangalore, August 18 to 20. This is South Asia’s largest and most comprehensive exhibition on apparel, knitting, textile printing technology, fabrics, accessories and allied services. The world's most advanced machines and materials were showcased under one roof. It featured more than 180 exhibitors from all segments of apparel manufacturing and trims.
Along with top exporters, many domestic retail giants, brands and start ups visited the show. Among the visitors were senior executives and decision makers from domestic garment manufacturers, exporters, buying houses, designers, wholesalers, retailers, ordinance factories etc who are looking for machines and materials needed for upgradation and setting up new units for sourcing their requirements.
Bangalore-based buying houses visited the show as they were keen to know about the latest machines and technology. Technology got a great response all through the event. Be it Brother’s IoT technology or Duerkopp Adler’s new launch of the 755S Speed Pocket automated machine, the offerings got an overwhelming response from the industry.
GTE Bangalore, having started in 2006, is held every alternate year and is also growing in stature and reach with each show.
Finished apparel, home furnishings and other made-up textile goods make up 93.5 per cent of US imports from China in the apparel sector. Fiber, yarn and fabric imports from China into the US represent only 6.5 per cent of the apparel sector.
Given that apparel and other sewn products made in China almost always contain Chinese inputs, a significantly greater value of fibers, yarns and fabrics made in China enter the US market in the form of Chinese-made downstream finished products than at the input stage.
Most of China’s 10 million direct textile and apparel jobs are concentrated at the final steps of the supply chain, the highly labor-intensive cutting and sewing operations. China predominantly ships end items versus intermediate inputs. End item imports most directly and negatively impact US textile and apparel production, investment and jobs.
China’s apparel and other textile-based end items compete head to head with western hemisphere products that typically are made from US fibers, yarns and fabrics. By the time a pair of Chinese blue jeans arrives in the US market, they are in a position to displace other products in the market. The US textile industry would be negatively impacted by additional tariffs of 10 per cent or up to 25 per cent on product from China.
The area under cotton in India has reduced. The reduction in area is primarily in the two major cotton growing states of Gujarat and Maharashtra. Deficit rains and pest pressures have prompted farmers to either plant alternate crops, or delay/abandon planting altogether. The planted area is four per cent lower than last year.
In central Maharashtra a significant part of the cotton area has shifted to soybeans and fodder maize. The number of rainy days in July in major cotton districts has ranged between 5 to 15 days, prompting farmers to either delay planting or plant alternate crops. But farmers continue to prefer planting BT cotton due to its relative drought tolerance over competing crops, and wide planting window. The plants are in the early vegetative stage, with farmers mostly undertaking weeding operations.
In Saurashtra, Gujarat, farmers have replanted cotton in major cotton growing districts as lack of adequate moisture in July led to crop failure. Farmers have shifted acreage from groundnut to cotton due to poor price realization from groundnuts last year.
While there is a marginal increase in cotton acreage, the prolonged dry spell is affecting plant development, and is expected to have a significant impact on cotton yields if rains are not received in the next 15 days.
"The messy state of Indian democracy has made it difficult to achieve a modest consensus on the Regional Comprehensive Economic Partnership or RCEP - a giant trade deal that weaves India, the Association of Southeast Asian Nations (ASEAN), Oceania, China, Japan and Korea together. The country has to arrive at constructive decision by August-end, when ministers from the 16 RCEP countries meet in Singapore. If New Delhi’s negotiators fail to achieve a consensus by then, the remaining 15 countries will have to move ahead without it. For many Indians though, this wouldn’t be much of a tragedy. India’s goods trade deficit with China was 60 per cent of its overall trade deficit. According to Indian policymakers, much of what’s being imported is sub-standard and susceptible to anti-dumping legislation. So far, 214 separate investigations have been opened against China for exporting substandard goods, which has worried policymakers about the effectiveness of the anti-dumping measures."
The messy state of Indian democracy has made it difficult to achieve a modest consensus on the Regional Comprehensive Economic Partnership or RCEP - a giant trade deal that weaves India, the Association of Southeast Asian Nations (ASEAN), Oceania, China, Japan and Korea together. The country has to arrive at constructive decision by August-end, when ministers from the 16 RCEP countries meet in Singapore. If New Delhi’s negotiators fail to achieve a consensus by then, the remaining 15 countries will have to move ahead without it.
For many Indians though, this wouldn’t be much of a tragedy. India’s goods trade deficit with China was 60 per cent of its overall trade deficit. According to Indian policymakers, much of what’s being imported is sub-standard and susceptible to anti-dumping legislation. So far, 214 separate investigations have been opened against China for exporting substandard goods, which has worried policymakers about the effectiveness of the anti-dumping measures.
More conducive measures required
India’s main concern is that RCEP’s focus on reducing goods’ tariffs is not adequate and the deal needs to open services trade simultaneously. It also needs
to accord greater freedom of movement to professionals who are a major source of foreign currency for India. The real constraints of trade growth are non-tariff barriers which make competing in the Chinese domestic market such a nightmare.
However, certain Indian sectors have panicked about competition. One of them is steel -- which is slowly recovering after years of pummeling thanks to Chinese overcapacity. Dairy producers obsess about Australia and New Zealand. Manufacturers worry about everyone.
The problem is that, at the moment, RCEP is the only proposed deal. India needs to arrive at a more positive, forward-looking approach by the end of the month or it must abandon its ambition to infiltrate global supply chains. This could be disastrous as the country will shortly have the world’s largest workforce but a mere a 2 percent share of world trade.
Therefore, instead of being concerned about China’s overcapacity and its ability to dump goods, India must show to the world that a regional trade agreement that prevents countries from bringing fair, transparent and temporary anti-dumping actions is in nobody’s interest.
Need for a positive approach
India has raised tariffs on 400 products over the past two years, which is a major departure from a generation-long trend towards greater openness. It has unilaterally scrapped investor protection treaties with almost 60 countries. Even the government’s choice of economic policy advisers reflects a new distrust of the world. The American-educated economists who defined the Modi government’s initial years have been eased out, not entirely gracefully.
As the country retreats from the turnpike of world trade to the dirt road of autarky, it will be poorer in both the medium- and long-term. Therefore if the government wants to reassure the world that India isn’t willing to put up with the dirt road, then it needs to find a way to be more positive about RCEP.
Sri Lanka and Bangladesh apparel makers are planning to jointly develop jute based eco-friendly apparel. Colombo-based Academy of Design (AOD) will provide the creative input for the initiative.
Bangladesh's apparel industry enjoys cheap labour and scale, while Sri Lanka specialises in synthetic fabrics, functional and smart clothing and wearable tech. The soil and water conditions in Bangladesh are optimal for the cultivation of jute while Sri Lanka possesses the expertise around design and innovation.
Since the last two years businesses in Sri Lanka are shifting gear from being competitors to collaborators. There are discussions being held between the tech industries of the two countries for combining the vertical capabilities of Sri Lanka combined in IT with the horizontal capabilities of Bangladesh.
Despite the downfall in apparel sector as indicated by the apparel export data, many textile companies are planning to expand their capacities. Prominent among these include fabric producers, apparel manufacturers, trims, ink and chemical suppliers etc. While some of the others are either diversifying into the overseas markets, or entering from export to domestic or vice versa, adding new buyers in their existing markets.
Some of these companies include Chiripal Group and Splenora Textures, which are setting up denim fabric manufacturing facilities. Similarly, in Bengaluru, leading kidswear manufacturers such as First Steps Babywear and liaison offices such as Stars Design are expanding their facilities. In Ludhiana, garment manufacturers like Million Exports, KG Exports, Bawa Knit Fab have announced investment plans. In Delhi-NCR, Noida Apparel Export Cluster is setting up an apparel park which will increase and ease garment manufacturing and exports in Noida.
According to exports, Vietnam’s textile and garment industry is performing well abroad, but struggling at home. The Vietnam Association of Retailers estimates over 200 foreign fashion brands to be present in Vietnam, accounting for more than 60 percent of the market share from medium-end to high-end products.
Vietnam’s local companies such as Viet Thy, Foci, Sai Gon 2, Ninomaxx and PT 2000, have forced to narrow their production scale. For instance, Sai Gon 2 Garment Joint Stock Company launched 70-80 new products before but has made only about a half of this number at present. In order to survive in the market, Foci has been forced to cut all new investments and narrowed the store system. The company is now focusing on selling uniforms and developing more online sales.
As against this, Swedish fashion firm Hennes & Mauritz AB (H&M) plans to increase the number of its stores to six next month. Zara has also opened its stores in Hanoi and HCM City. While fashion brands such as Mango, Stradivarius, Massimo Dutti and Topshop has recently joined Vietnam’s market.
Moldova is wooing Indian investors in textiles, agriculture and a few other sectors as it plans to open an embassy in India in 2019. Moldova is interested in an economic and trade agreement and a foreign investment promotion and protection agreement with India.
A visa agreement is also needed as Indians need an invitation from Moldova to visit the country now. If a company invests more than a million dollars in a free economic zone in Moldova, it does not have to pay taxes for three years. In September, a delegation of textile business representatives will visit India to explore cooperation avenues.
As manufacturing moves to lower cost countries, Moldova remains an attractive proposition for investment in a sector which already accounts for 1.5 per cent of general GDP and 30 per cent of manufacturing GDP. The textile/apparel cluster employs over 21,000 workers and has become one of the leading exporting sectors in the country.
The country’s proximity to the EU is a key element among its strategic advantages as a supplier of textiles and apparel to consumer markets. Moldova produces knitted and woven apparel, lingerie and nightwear, protective clothing and carpets. More than 250 enterprises are active in the sector.
