Southeast Asia – a strategic sourcing review
Myanmar is starting to attract attention from several international brands
Cambodia, Vietnam and Myanmar continue to attract huge interest as apparel supply bases – and a new report from just-style aims to make it easier for retailers, brands and importers to evaluate the key advantages and challenges of sourcing and manufacturing in each country.
The report 'Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar' comes as the global sourcing landscape remains in a state of flux. It takes a value chain approach, looking at each country from the perspective of sourcing (access to raw materials), manufacturing, market access, and business environment.
It then drills deeper, evaluating each on 15-point sourcing criteria that include production quality, price, compliance, sample development, lead time, tariff advantages, flexibility on quantity, efficiency, reliability, and vertical integration. Feedback from a panel of senior executives completes the picture.
Vietnam, Myanmar and Cambodia are also rated on their current levels of competitiveness, with five-year projections across two scenarios capturing where the countries may move across this period.
Almost 90% of the world's garment exports in 2014 came from just 15 countries, of which 11 are in Asia. While China dominates with almost 40% of global exports, challenges such as rising costs, strict compliance and environmental regulations, labour shortages, and a move to the production of higher value products means most sourcing managers are looking for alternatives.
Which is why neighbouring countries such as Cambodia, Vietnam and Myanmar are attracting so much attention.
Vietnam is already the fourth-largest exporter of apparel globally (after China, the EU and Bangladesh) and trade is likely to surge in response to the potential benefits from the TPP (Trans-Pacific Partnership) with the US and a free trade agreement with the EU.
Cambodia's garment industry accounts for 80% of the country's exports. It is still viewed as a low cost destination in Southeast Asia, but there are questions over whether it will be able to retain its advantage against rising competition from neighbouring countries.
And with the gradual opening up of its economy, coupled with investments and strategic trade agreements, Myanmar is starting to attract attention from several international brands. With around 300 factories the sector is growing rapidly, but mainly on a CMP (Cut, Make, Pack) basis. With limited exposure to clients in Europe or the US, factories have little understanding or experience of managing FOB (Freight On Board) exports or factory compliance.
Future scenarios outlined in the report for sourcing from these countries over the next five years take in the impact of new trade agreements, compliance and sustainability, and new channels to market.
Click on the link below for more details:
Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
This report is aimed as a strategic tool for both buyers and suppliers to assess and compare the advantages and challenges of sourcing and manufacturing apparel garments in the Southeast Asian countri...read more
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