Comment: Sourcing segmentation is at odds with the data
Myanmar's garment export industry has potential, but not yet
The latest word is "segmentation": a trend whereby China is losing its position as a low-cost garment exporter and other countries have stepped up to claim their part of the manufacturing pie. The problem, says David Birnbaum, is that the concept is somewhat at odds with the data.
- Twenty years ago, the top seven countries together accounted for 50+% of US garment imports and the top ten accounted for 62% of total US market share.
- Ten years ago, at the end of the quota period, exports had diversified to the point where the top nine countries together accounted for 50+% of US garment import and the top ten accounted for 55% of total US market share.
- In 2013 (the most recent period when data is available), the top three countries together accounted for 50+% of US garment imports and the top ten accounted for 79% of total US market share.
|Top 10 US garment imports 1994-2013|
|RANK||COUNTRY||MKT SHARE||AGGREGATE||COUNTRY||MKT SHARE||AGGREGATE||COUNTRY||MKT SHARE||AGGREGATE|
Bangladesh is a special case. We can see the possible beginning of a reversing trend. 2013 began well, with a spike in October. The following month market share fell below 2012 figures. It is too early to say whether this will continue, but we can say that Bangladesh does have problems.
Myanmar is the last remaining member of the segmentationists' low-cost winner trio. If only it were true.
I am currently working in Myanmar, designing a strategic plan for the industry. Let me say at once, this is an industry with great potential. However at this moment I see myself as a garment industry oncologist; and my patient is suffering from three versions of the Big C: No Capital, No Compliance, No Customers.
Under the circumstances, to speak of Myanmar's garment export industry as a possible alternative to China is about the same as declaring my late grandmother's knitting circle cum KaffeeKlatsche as a potential major global sweater exporter.
As we understand the word, there is no Myanmar garment industry. There are approximately 247 factories and, with the exception of the Japanese operations (that of course they look like they are taken directly from the textbook 'Building a World Class Garment Factory for Fun and Profit'), the other 244 cannot begin to work for any legitimate customer.
Customers and global factories who, only 12 months ago, were rushing to Myanmar to get in on the ground floor are mostly gone, having left their business cards with the note: "Call us when you have an industry."
Myanmar can develop a world-class industry. If you know serious people - customers and factories - interested in being on the ground floor of the final successful Asian garment industry and who are able to wait six months, please e-mail me. Segmentationsts welcome.
An interactive databank with intelligence on the major apparel sourcing countries
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