Wazir Advisor’s latest report, ‘Apparel Trade Scenario in Key Global Markets and India - Nov 2022’ reveals India’s garment export was not up to the mark at all, having suffered a decrease of 24 per cent compared to October 2021. However, on YTD basis the exports are 11per cent higher than 2021. However, keeping the high inflation in mind, there is no volume growth over 2019. The report on key markets viz: India, Japan, US, UK and the EU, covers a wide-range of topics related to the global apparel sector.

Slowdown affects consumer sentiment

The current economic slowdown and inflation has led to curtailed consumer buying and that is the main reason for this downgrade. Although India did gain 8 per cent in exports to the US, it lost 3 per cent in exports to the UAE and 1 per cent to the UK. Between January and September 2022, India’s overall apparel exports worth $12billion was largely to the US with 35 per cent share, the UK had 9 per cent share, the UAE 8 per cent, Germany 6 per cent, France 4 per cent and others made up 38 per cent.

With Europe already in inflation-ridden crisis and the UK slipping into recession and predictions that the US may follow will definitely affect garment exporters in 2023. India may well look at the Eastern markets like its neighbor Bangladesh. The proof lies in the fact that Japan’s apparel import as of August 2022 stood at $2.8 billion which was 23 per cent higher than August 2021. Last year, India exported apparels worth $141.37 million.

China sees a drop in the US market

In the US market, China has experienced a sharp decline in garment exports as its share steadily declined by 8 per cent since 2019. Vietnam and Bangladesh are the beneficiaries, experiencing a growth of 3 per cent each. India gained 1 per cent. Looking at the US market in September 2022, apparel imports were valued at $9.6 billion which is 18 per cent higher than in September 2021. On a year to date (YTD) basis, the imports are 35 per cent higher than 2021.

Monthly apparel store sales in the US market in October 2022 were estimated $17.3 billion, 2 per cent higher than October 2021. On YTD basis, sales are 9 per cent higher than 2021. Apparel inflation remained in the range of 5.5 to 8 per cent during 2022, which reveals low volume growth.

China, India lose ground in Europe market

The EU presents an interesting pattern as between 2019 and 2022, China held steadfast with 29 to 30 per cent share. India too, though small, has held steady at 5 per cent. However, both China and India haven’t seen growth whereas Bangladesh has grown by 3 per cent with 23 per cent share in 2022. In the January-August period of 2022, Bangladesh clocked €14.35 billion compared to €8.85 billion in the same period in 2021. With Bangladesh poised to focus on artificial fibers, it is predicted to grab more of China’s share in the EU in the years to come.

Turkey and Vietnam are in a similar situation as are China and India – steady but no growth. While EU’s import figures might look impressive, the high growth figures are due to a low base value and inflated prices. EU’s apparel imports in September 2022 were approximately 42 per cent higher compared to the same period in 2021. The EU basket of apparel imports from January to August 2022 stood at €73. 4 billion, with China at 29 per cent, Bangladesh 23 per cent, Turkey, India and Vietnam at: 12, 5 and 4 per cent, respectively; while others clocked in 27 per cent.

UK shows a different pattern

The UK market shows a slight difference as China, Bangladesh and Turkey increased their exports by 5, 4 and 3 per cent respectively. The UK’s apparel import basket for January to August 2022 stood at 15.4 billion with China’s share at 24 per cent, Bangladesh at 19 per cent, Turkey 10 per cent, India and Italy at 7 and 5 per cent respectively; others stood at 36 per cent. In terms of apparel sales, the year to date performance in the UK is 23 per cent higher and in October alone, it was 3 per cent higher than last October at a total value of £3.5billion. Overall, the growth of apparel sales, imports and exports look healthy but the uncertainty that might befall the world might have a different story.