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The textile and clothing industry is one of the most important manufacturing industries in Asean countries such as Vietnam, Indonesia, Kampuchea, Burma and Thailand. They have a strong compatibility with China and are close neighbors. With the implementation of preferential tariff policy, Vietnam's clothing exports to the EU will increase significantly. Vietnam's clothing, textile and leather shoes industries will benefit from the Comprehensive and Progressive Trans Pacific Partnership agreement.
Garments produced by Cambodia are mainly exported to the United States and the European Union. Of the more than 200 textiles and garment enterprises in Cambodia, more than 80 per cent are from China. Indonesia’s exports of clothing account for about 70 per cent of the country’s total exports. Although the country’s textiles exports increased five per cent in 2017, in 2018 growth is expected to slowdown.
In 2017, Malaysia’s silk trade was down 18.64 per cent. And import saw a 23.14 per cent year-on-year decline, export volume increased 2.37 per cent over the same period. Chinese and Asean enterprises in the textile industry have huge possibilities of cooperation. Textile parks of can be set up in Asean countries for development.
China’s apparel imports in 2017 increased 9.4 per cent. The main factor contributing to the increase was: increase in volume. The index of apparel imports was 115.9 while the import price index was 94.4. Imports of major categories of knitted and woven garments increased by 13.4 per cent while average import prices dropped by 4.3 per cent.
Textile imports increased 3.7 per cent, a growth in both volume and value. The import volume index was 100.5, and the import price index was 103.1. Imports of yarn and finished goods both increased by 6.2 per cent and imports of fabrics decreased by 1.3 per cent.
Decline in exports to the EU has narrowed and the impact of Brexit in the United Kingdom is expected to outweigh the disadvantages. Exports to the United States, Asean and Japan resumed growth.
The United Kingdom is an important export market for China’s textile and apparel, ranking fifth in terms of individual countries and the largest market in the 28 EU countries. In 2017, China’s exports to the United Kingdom accounted for four per cent of total global exports and 21 per cent of the exports to the EU.
Changing Goods and services tax (GST) rules, are affecting refunds, and procedural issues affect export from special economic zones (SEZs). The Export Promotion Council for Export Oriented Units & Special Economic Zones (EPCES) has listed a number of persisting procedural and regulatory obstacles. Vinay Sharma EPCES Chairman says there have been a staggering 367 changes to the GST rules till April 15, since the new tax structure came into being last year.
He further added one-size-fits-all policy, was not taking into account many ground realities. Arun Goyal, Special Secretary, GST Council, and Yogendra Garg, Additional DG, Directorate of GST, have been advised by businesses to let the use of regional languages during the generation of e-way bills.
The issue of pending GST refund from the central government have started flowing, those from state governments are still piling up, says Sharma. SEZ exporters say over 60 per cent of their refunds are stuck, severely reducing their working capital. According to official data, a total of Rs 176.16 billion has been disbursed by the government as refund till March. EPCES has suggested these zones be treated as deemed foreign territory for the purpose of the ‘place of supply’ rule under integrated GST regulations for services exports.
However, the 204 such zones saw 18 per cent increase in exports between 2016-17 and 2017-18. Software exports from SEZs alone rose 17 per cent. Combined exports from SEZs were Rs 5.5 trillion in 2017-18, from nearly Rs 4.7 trillion in 2016-17. There are also suggestions for faster processing of refund claims by suppliers.
Interfiliere Hong Kong took place on March 27 and 28, 2018 showcasing innovations and high quality materials. Surrounded by the breathtaking scenery of Kai Tak Cruise Terminal at the heart of Victoria Harbour, the show kicked off with an opening speech by Angie Lau, Chairlady of Hong Kong Intimate Apparel Industries’ Association (HKIAIA), Hon. Felix Chung Kwok Pan, member of the Legislative Council of HK (Textiles and Garment constituency) and Marie-Laure Bellon, CEO, Eurovet. The show was praised for the courageous and pioneering decision to take this curated industry event a step further with new insights, generating fresh dynamics by welcoming professionals and experts from fashion industry and beyond, and synergising with advanced technology in facilitating an innovative way of exchanging business and ideas.
For the 12th edition, and the 2nd under its new curated format, Interfiliere Hong Kong presented diversified and premium exhibitors from 75 companies and registered a year-on-year growth of 15 per cent. Companies from Mainland China made up 63 per cent of the exhibitors, European companies accounted for 15 per cent followed by Hong Kong with 9 per cent, and the remaining proportion was respectively taken up by companies from other Asian regions and rest of the world. The quality of offerings was consistently high level, thanks to the contribution of exhibitors and the Selection Committee. There was a vast range of exceptional materials and technology, such as velvet lace, natural, sustainable and super technical laces, a new generation of silicone pads, elastics with unique effects and compression colour film.
The show welcomed 1,600 visitors over the two days, and witnessed a substantial growth surpassing the organiser’s objective by 33 per cent. Hong Kong represented 50 per cent of the visitors followed by Mainland China with 34 per cent. Visitors from rest of Asia accounted for 9 per cent whilst rest of the world contributed 7 per cent. Notably, there were new visitors from Austria, Bangladesh, Brazil, Macau, Myanmar, Singapore, Slovenia and Switzerland. The strong attendance of international buyers with diversified profiles has proven that Interfiliere Hong Kong is a place-to-be in Asia where pursuit of material sourcing, technical solutions, business connections, trend forecasting, innovation and inspiration can be fulfilled.
Newer offerings
Launched in 2017, the Gallery has become a new feature exclusively organised at Interfiliere Hong Kong. Nearly 428 pieces of finest product samples pre-selected by the steering committee were displayed at the Gallery. Each company panel was equipped with a Poken touchpoint allowing visitors to collect information of their favourite samples. This was an absolute art of ingenious design, which has visually impressed the visitors, and a showcase of craftsmanship as well as technology that has been tactilely experienced and sparked inspiration.
Standing at the heart of the show, The Creativ’ Lab was designed to demonstrate the evolution, in collaboration with Interfiliere exhibitors by presenting fabrics, prototypes and global collections, revealing color moods for A/W 2019-20 and responding to the significant change of the lingerie world. Featuring Nature Moves Us, the Creativ’ Lab put a major attention on the dwindling natural resources on the planet, together with industry experts Xiao Lu Liu, founder & CEO, NEIWAI; Nancy Chang, COO, Clover Group; Jeroen Jacobs, global sales director, Eastman; Federica Annovazzi, design director, Iluna; Amy Lee, head – global retail & channel partner management, Lenzing and Sanko, in quest of concrete solutions and ideas.
Knowledge dissemination
The show presented the tracks of conference delivered by keynote speakers focusing on economic and retail market overview, sustainability, trend forecasting and activewear. The global body fashion industry has been enriched with tremendous opportunities brought by technology advancement and unprecedented innovations, and yet vulnerable shaken by complex variables, from global economic and political fluctuations, escalating environmental issues, emerging market conditions to constantly changing consumer behaviours. Throughout the full schedule of conference, under a vibrant ambience of interactions and brainstorming, audiences actively raised their puzzles and seek for insights and inspiration from the speakers, especially young designers and brands who have found the enlightenments on how to (re)position their concepts and products to be in line with the global trend.
Teijin has fully transferred the production of its primary polyester-fibre brands to Teijin Polyester (Thailand) (TPL), a subsidiary of Teijin Frontier. TPL, which is celebrating its 50th anniversary this year, is now the hub of Teijin’s strategic global polyester-fibre production. Teijin’s international polyester fibre business is supported by FTAs such as the ASEAN-Japan Comprehensive Economic Partnership and the ASEAN China Free Trade Agreement and the increasing cooperation within the group, including between Teijin’s bases in Japan and Nantong, China. The company has positioned Thailand as a hub for global operations, including not only polyester materials, but also aramid fibre production and sales and polycarbonate resin sales which are expected to contribute to Teijin’s international business in high-performance materials. Teijin is also expanding its healthcare operations and conducting R&D in advanced medical equipment such as artificial joints, in Thailand. The company plans to leverage Thailand as a core ASEAN base that is expected to create new value for society at large. The Teijin Group announced significant restructuring initiatives, transformation and growth strategies in its Revised Medium-term Management Plan in November 2014. Under this plan, initiatives such as the transfer of polyester filament yarn and staple fibre production from factories in Iwakuni and Tokuyama, Japan to TPL as well as polyester fibre production and processing have been consolidated in Thailand and Matsuyama, Japan. A subsidiary to produce highly heat-resistant and dyeable meta-aramid fibre was incorporate in September 2013 and a tire cord factory was incorporated in June 2014. The Teijin Group currently has nine group companies and some 1,900 employees in Thailand.
Twin fairs, the Hong Kong Houseware Fair and Hong Kong International Home Textiles and Furnishings Fair were held from April 20 to 23, 2018. The two fairs welcomed close to 49,000 buyers from 112 countries and regions, up 1.5 per cent on last year. Almost 30,000 buyers visited the Houseware Fair while more than 19,000 buyers attended the Home Textiles and Furnishings Fair. Attendance from mature markets such as Singapore, Canada, the UK and the US, as well as emerging markets including the Chinese mainland, Vietnam, Brazil, Argentina and Mexico, all saw growth.
This year's Houseware Fair had a startup zone, featuring more than 20 start-ups from Hong Kong, the Chinese mainland, Taiwan and Bangladesh. The zone allowed start-ups to exhibit at a lower cost, making the show a springboard for them to connect with overseas buyers and manufacturers and a testing ground to gauge market responses to their products.
Hong Kong International Home Textiles and Furnishings Fair adopted the interior theme and showcased a variety of home textiles, upholstery and furnishings products, providing a one-stop sourcing platform for buyers. The highlight zone, the Hall of Glamour, spotlighted quality brands and designer collections. India and the Chinese mainland set up a number of dedicated pavilions to showcase their products.
Fossil Group and Puma has signed a global license partnership agreement for the design, development and distribution of Puma watches and smart watches through 2028. Kosta Kartsotis, CEO, Fossil Group says Puma is one of the world’s leading sports brands. The brand is excited to partner with them and bring a world class design and distribution capabilities to the Puma watch collection.
Puma and Fossil Group will collaborate on the design and manufacturing of PUMA-branded watches and smartwatches, with products planned to hit the market in 2019. The new products will be available through select department stores, specialty retailers and e-commerce channels in Fossil Group’s extensive global network.
According to Bjorn Gulden, CEO of Puma the company focuses on innovation that helps to make products that fit the needs of the consumers and the world’s fastest athletes.
Post releasing its Q4 results for 2017 in January, H&M which had its biggest profit decline in six years — 14 per cent for the full year —shut down 170 stores in 2018. Speaking on their results, Karl-Johan Persson, CEO, H&M said the fashion industry is changing fast. At the heart of the transformation is digitisation, and it is driving the need to transform and rethink faster and faster. Experts said it’s the company’s lagging production cycle vis-à-vis its competitors such as Zara, Asos and Boohoo (H&M’s cycle can take up to six months with much of its production in Asia, while others are able to manufacture and deliver product in a matter of weeks), that has caused trouble for the company. While some argued it’s merchandising for being less than savvy, with too many basic tees and jeans, and not enough trends to compel shoppers.
Changing strategy
Now, to drive growth, fast fashion companies are taking various initiatives. For instance, this year, H&M is launching two initiatives that could help it diversify. First is Afound, a brand that will sell various clothing labels — including H&M — at a discount. Second, it has dropped a prelaunch collection for /Nyden, an affordable luxury brand aimed at millennials. The new collection will focus on what the company calls ‘cocreation’, culling designs from various personalities to create capsule collections, even inviting fans to submit photos of themselves via an Instagram hashtag ‘iamnyden’ for a chance to win a trip to Los Angeles to design their own collaboration for the brand. /Nyden will also use the ‘drop’ system that even department stores like Barneys New York have enacted outside the traditional four-season system.
It remains to be seen this strategy proves to be successful for the company. Indeed, the moves the brand has planned for itself could help reignite interest for H&M and transform deliveries into ‘drops’ may help retain the attention of distracted consumers. The co-creator initiative is a new way for the company to continue its collaborative reputation.
Other brands adopt new strategies
Zara is steadily increasing higher-price-point items within its Studio collection, while lowering its entry-level price points by as much as 50 per cent in markets like India. It is also launching an augmented-reality presentation to debut in stores. It will allow shoppers to view specific looks from the spring collection when a mobile phone is held up to a sensor within the store on in shop windows. On the other hand, Asos witnessed a jump of 145 per cent last year. This reflects that fast fashion is here to stay. With the right balance of luxury markets, midlevel brands and department stores, these companies must diversify their marketing and merchandising and digital/brick-and-mortar mix to retain the attention of a younger, dramatically different customer.
Fast fashion leads to problems such as child labor and human trafficking. Mass consumption has removed this generation almost entirely from the manufacturing process – unlike previous generations, who would either know the tailor or fabric producer responsible for making their clothes, or make clothing themselves.
An unprecedented demand for clothing on a worldwide scale is resulting in global clothing brands’ making use of factory plants that are unethical in creation of their products. The first area that is being affected is the lives and health of the workers in factory plants supplying these retailers. In countries that engage in mass production, little is done to protect workers and underage persons employed by this sector. Women and young workers spend 14 hours a day in sweatshops.
Fast fashion is the process whereby products and designs move quickly from catwalks to stores and retailers. Brands buy material from Asian factories that are guilty of contaminating local rivers with carcinogenic run-off. The dyes used to color the clothing in businesses that specialize in fast fashion usually contain toxic chemicals such as nonylphenol.
Bangladesh’s apparel sector export earnings moved north despite numerous obstacles. And among the reasons for growth are: compliance with buyers’ conditions, reforms in the readymade garment sector and higher investment and production.
The apparel sector earned $23 billion through exporting products in the first nine months of the current financial year. Although export growth was nearly $4 billion after the disaster, the number of garment factories had not increased. There were some 5,867 garment factories in the country in 2012-13 fiscal, dropped to 4,600 in January this fiscal. Though the number of factories has fallen productivity increased gradually. However, the number of readymade garment workers has remained unchanged at 40 lakhs.
Accord-Alliance and the National Action Plan were formed after the Rana Plaza disaster to establish a fire and building safety program in Bangladesh. Many factories were shut down after failing to meet the conditions of the Alliance and NEP. Buyers did not encourage these factories to continue production as most of them were housed in shared buildings. But despite the obstacles, entrepreneurs keep their business on track through more investment.
Though total export earnings have increased their growth rate has fallen. Entrepreneurs have taken various steps to regain buyers’ trust.
