The changing dynamics of apparel production and consumption came under the spotlight at the recent International Apparel Federation's 23rd World Apparel Convention in Taiwan. Delegates argued that in the future, Asia will not only be the major region for textiles and clothing but will also be the world's largest consumer market. Vicky Sung reports from Taipei.

There's no doubt that today the centre of garment production is in Asia and the centre of consumption is in the EU, US and Japan. But in the future, Asia may well be the centre of both.

Hence the theme of the 23rd IAF World Apparel Convention which took place in Taiwan at the end of last month: 'Asia: An Emerging Consumer Market from a Global Production Base'.   

Concerns that the US mortgage crisis may lead to a slowdown in the US economy, and that Asian governments will succumb to pressures to protect their industries, was central to the keynote speech from Ms Marjorie Yang, chairman and CEO of Hong Kong's Esquel Group.

She believes there is a "silk parachute" looming over Asia, and that with 3.7bn people, intra-Asia trade will soon rival that of the US and EU. China and India, the fastest growing nations, will be the driving force.
Asia's economy is also fast-moving, and the region must learn new tricks to tackle its fragmented markets, she stressed.

Asian suppliers are good at carrying out designs, but in future will need to come up with their own designs and expand their concepts for the Asian market. Distribution will be another key area, and learning how to reach the consumers is key to success.

But before Asia can develop its own brands, companies must learn about and understand the region's consumer market if they are to prosper.

Trade liberalisation vs barriers
Kevin Burke, president of the American Apparel & Footwear Association (AAFA), believes free trade is good for the global apparel industry, good for consumers and good for businesses.

Free trade is building the economies of China and India as well as the smaller apparel producing nations, he said, and while globalisation has led to job losses in the US and the EU, many have gone on to better jobs in other industries.

Despite safeguards imposed on imports from China in 2005, US production still decreased and imports from Asia went up. The US wants China to open up its market for US brands and China needs to play by the WTO rules, he said.

"We need to work together to promote free trade. Globalisation is good; it opens new markets to source from and new markets for our products."

William Lakin, director general of Euratex, the European apparel and textile organisation, urged the industry to reject protectionism and recognise globalisation - but it must be a two-way traffic. Free trade is good as long as it is fair, he said.

Rory Macmillian, Nike director of government affairs in Europe, Middle East, and Africa, believes that for multi-national brands to survive they must have lean manufacturing, diversify and specialise, good transport, logistics and infrastructure, be vertical in material sourcing and manufacturing, reduce lead times, be near to their markets, and increase focus on social responsibility issues.

However, all textile and apparel manufacturers need predictability and certainty, he said. Like sports, trade has very clear rules of the game.
Ms Chaw-Hsia Tu, deputy director of the Taiwan WTO Centre, said tariff barriers are simple and clear, but non-tariff barriers are hard to define, and it is therefore hard to calculate the affects. Green barriers such as REACH, Oekotex, and social responsibility are becoming more and more important.
Asia market: risk and opportunities
Mr BS Nagesh, managing director of Shopper's Stop of India, said there are great opportunities in apparel retailing to be exploited in India. But it is a diversified country with different tastes from one end of the country to the other, and the present retail structure is dominated by 'mom and pop' stores.

Eric Lin, chairman of Taiwanese retailer Les Enphants which has stores in Indonesia, Thailand, Singapore and China, offered some suggestions on doing business on the mainland. Choose the right business, create the right strategy on product, price, place, promotion, and people - and do not take what works well in one country and expect it to work in another.

Dominique Jacomet, director general, Institut Francais de la Mode (IFM) said fashion is about taking a local heritage and making it attractive to other cultures. Branding is about controlling the retail stores as they are direct links to consumers, but the importance of strong domestic support must not be under-estimated.

At the moment, China produces the products while others do the branding, said Tianxing Shao, vice president of China Textile Commerce Association, adding that there is a shortage of retail experts and designers in China.

However there is a retail boom in the country and as domestic sales increase Chinese firms will face a dilemma - to serve the domestic market or export.

Capacity growth vs profitability
In his discussion on the impact of quota elimination, Robin Anson, director and managing editor of Textiles Intelligence, said the post quota era will be characterised by tough competition on price.

China is cheap, but not as cheap as Vietnam he explained, adding that rising fuel prices are likely to lead to local sourcing. Competition may also be on location due to the demand for quick response and quick delivery, and corporate social responsibility will also play a role in non-tariff barriers.

Justin Huang, secretary general of the Taiwan Textile Federation, said China's exports are slowing on labour shortages, escalating raw material costs, increasing labour costs, power shortages, currency appreciation, and reduced export rebates.

As the economy of China booms, the income level has gone up and the propensity and desire to consume consumer goods such as clothing have increased tremendously. Reduced export rebates will push companies to turn to the domestic sales.

"Is there really an oversupply of clothing in the world?" asked Mr Rahul Mehta, president of the Clothing Manufacturers Association of India.

He believes quotas have made some companies complacent, and that textile and apparel exporting countries just look at half of the world market only - the EU, US and Japan - without viewing the developing countries.

If manufacturers are willing to look beyond their present products and markets, then they will not be faced with overcapacity, he said.