just-style management briefing: Suppliers developing their own design hubs
The growth in outsourcing has been the most important trend in the clothing and textile sector in the past decade, with emerging market countries offering increasingly reliable and sophisticated services. While the recession has put paid to a lot of talk about emerging market suppliers developing their own design hubs, the idea is still very much alive.
India is a case in point. It has been developing as a design and production hub, but not largely for home-grown companies, rather for international brands including Donna Karan New York (DKNY), Gant, Arrow, Marks & Spencer and many others.
But even here, there are concerns that this progress might not last. In the last six months analysts have been warning that foreign companies are holding back from expanding into India.
Ashish Amin, an independent consultant advising foreign textile companies to set up business in India, says the situation has changed drastically. "At the moment foreign companies are not at all interested in India."
The situation is not specific to the clothing industry, with Amin blaming business-hostile policies from the present Congress-led government. But that of course impacts the clothing sector.
Specifically, he points to the problems faced by Spanish company Inditex while introducing its Massimo Dutti apparel brand in India. Although the company already sells its Zara brand through a joint venture with Tata group, it was in July denied permission for launching Massimo Dutti. No clear reason for the refusal was given by the government.
However the fundamentals of India's garment sector remain strong, and the skills are there to increase the amount of design undertaken in its workshops.
Rathi Vinay Jha, an independent fashion expert and former head of the Fashion Design Council of India, told just-style "there is no shortage of fashion designers in India" and says many are already directly employed by foreign companies.
India also has a huge supply of domestic cotton and there are textile and clothing industrial centres well equipped with infrastructure and technology. So, it might not be long before the country lives up to its promise as a key production and design hub.
China's domestic opportunities
Meanwhile, in China, foreign companies continue to move orders away to avoid the country's rising manufacturing costs. As a result, Chinese textile companies are increasingly turning to the domestic market, creating their own fashion brands in order to stay afloat.
A good example is Guangzhou-based Trendy International Group, which runs Orchirly - a domestic fashion brand that is so popular among young Chinese women that it even attracted investments of approximately US$200m by French apparel multinational LVMH in February of this year.
In Shanghai, leading casualwear company Metersbonwe Group aims to be a leader in fast fashion, joining multinational giants such as Hennes & Mauritz (H&M), Zara and Uniqlo. One way Metersbonwe is trying to stay competitive is by recruiting an international team of designers, and combining fast fashion principles with Chinese culture.
In March this year, the company teamed up with 21 independent designers from mainland China, Hong Kong and Taiwan to launch a T-shirt collection based on the traditional Chinese story 'Journey to the West', by creating story motif prints.
"Right now, we are only operating in mainland China which provides huge potential," says Metersbonwe spokesman Ice Ye. "However, with the combination of Chinese culture and sophisticated design, we look forward to entering the Western markets like London and New York in the next three to five years."
Higher-end Vietnamese brands
In Vietnam, an outsourcing location that has benefited from the rise in Chinese costs, the domestic market for apparel has also been growing. And while the unbranded and cheaper section of the market - usually produced in China - continues to hold the largest share, higher-end Vietnamese brands are starting to develop an international reputation.
Two designers - Duong Nguyen and Chau Nguyen - showed their collections in London recently. Both incorporate traditional elements from Vietnam into their clothes, such as ethnic minority dress.
There are also fashion schools in Vietnam's major cities, and the London College for Fashion Studies has had a presence in Vietnam for some time, turning out dozens of graduates each year.
One of the best-known accessory labels currently being produced in Vietnam is Ipa-Nima handbags. While inexpensive compared to the thousands of dollars Fendi might claim for a bag, this is a higher-end brand in Vietnam with its products usually costing more than US$200. The bags often incorporate elements of traditional Vietnamese design and craftsmanship and have been featured in many well-known fashion magazines overseas.
Vietnam is also known for its silk, and many designers incorporate this into their work as they start to look for higher-end international sales. Ten years ago, silk products for foreigners tended to be cheaper and aimed at the tourist market, along with traditional clothing such as the 'ao dai', the women's national costume.
Rules and regulations thwart Brazilian ambitions
Of course, the ultimate ambition for emerging market design hubs is to take their own brands and sell them to the rest of the world. And a good example of this kind of success is Brazilian sandals company Havaianas, which has managed to draw the world into wearing its wares.
Brazilian women's footwear company Melissa, whose shoes are infused with the smell of sweets, has also done the same. From having high-end London-based fashion designer Vivienne Westwood design several seasons of the plastic shoes, to a recently opened store in New York City's SoHo district, its shoes have become positioned as a high-end international brand.
Melissa has established itself with both online and physical stores in 34 key markets, such as the UK, Angola, Hong Kong, and Singapore.
However, while Brazilian shoe companies have had success in securing global sales of their own designs, the country's clothing exporters have not had as much success due to weak trade deals with potential export markets. Excessive trade regulations have also made it difficult for Brazilian brands to export and set up abroad.
Most of the brands that are shown at São Paulo fashion week, such as Colcci and São Paulo-based clothing line Cavalera, only sell and operate within Brazil, essentially because of export administration complications.
But, maybe frustratingly for them, big international players sometimes have the will and resources to overcome Brazil's bureaucracy and make headway in the Brazilian market. The Spanish clothing chain Zara has experienced incremental growth in Brazil over the past five years, for instance.
As it stands, only the internet appears to offer Brazil-based clothing lines a clear opportunity to sell abroad while avoiding export hassles; the e-commerce market is booming in Brazil, allowing its companies to sell Brazilian designed and made clothes outside the country to foreign customers.
With additional reporting from Sheena Rossiter, Helen Clark and Wang Fangqing.
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