Blog: Asia facing up to increased competition
Leonie Barrie | 10 October 2016
Increasing competition for garment sourcing contracts is seeing China not only being challenged by other countries in Asia, but by sub-Saharan African and even Russian suppliers too, an international conference has heard. And it is pushing Asian governments to sharpen their industrial policies to try to retain market share.
But while Bangladesh's apparel makers have invested heavily in improving factory safety since the 2013 Rana Plaza disaster, global buyers are still not paying fair prices or following transparent purchasing practices, an event in Dhaka has been told. Instead of a race to the bottom, the industry is being urged to move from paying minimum wages to living wages.
Meanwhile, the Alliance for Bangladesh Worker Safety says it is working on a plan to hand responsibility to the government for its members’ supplier factories in 2018, and has revealed around 63% of remediation work has been completed to date.
Research into living wages and working conditions at ten garment factories in South India supplying Dutch brands and retailers suggests one-third of workers earn less than the minimum wage.
While a separate report has revealed the rate of minimum wage non-compliance among seven major garment exporting nations in Asia is highest in the Philippines and India, with more than half of workers in these countries under-paid. In contrast, non-compliance rates are lowest in Vietnam.
That said, the US Department of Labor (DOL) has updated its list of goods produced using child or forced labour – adding textiles, footwear and leather products made in Vietnam, but removing garments made in Jordan.
Viewing the whole North and East Africa region together could present a new option for a complete sourcing solution for fashion brands and retailers that is both closer to their bases and in similar time zones to Europe, according to a new report from just-style.
Meanwhile, Mexico's textiles and apparel industry is violating workers' basic rights including freedom to unionise, overtime and severance pay, according to the Human Rights Commission of Tehuacan, a major maquila hub in Puebla State two hours south of Mexico City.
Estimates for average cotton prices in the current season have been lowered to 73 cents/lb after revised forecasts suggest increased production in the US, Pakistan and Brazil will offset losses in China. This would represent a rise of just 3 cents/lb on last season's average price.
And with around a month to go until the 2016 presidential election, observers are as undecided on the likely impact on apparel and footwear sales as they are on the winning candidate. But they agree any effect is likely to be short-lived, with a post-election bounce-back most likely to follow.
An uptick in consumer confidence and improving unemployment rates helped two US apparel retailers lift their monthly sales in September, but the rest continued to disappoint.
In other news, VF Corp has named COO Steve Rendle as its next CEO; US women's wear retailer Ascena is restructuring with a new team to oversee its supply chain; Africa's first electrified railway line has opened in Ethiopia, linking Addis Ababa with the port of Djibouti; and consolidation is underway in the US outdoor sports sector after Bass Pro Shops bought Cabela's for US$5.5bn.
Over the past month, Donald Trump and his team failed to offer any clear plan to ensure Americans would "Buy American, Hire American" - while the British government's attempts to clarify the specifics...
The Bangladesh government was forced to respond late last week to pressure over its crackdown on labour activists after a number of global brands and retailers, including H&M and Inditex announced pla...
Fresh from their disappointment at seeing the Trans-Pacific Partnership (TPP) free trade deal abandoned last month with an executive order by President Donald Trump, the US apparel and footwear sector...
With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices o...
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