Blog: If you can't beat them, join them
Leonie Barrie | 29 July 2013
Taking the stance that "if you can't beat them, join them", the Chinese government's external investment plans are supporting a shift of some production to cheaper centres overseas, especially in Southeast Asia. The 'Going Out' strategy will help keep Chinese influence over the lowest-cost clothing and textile manufacturing as the country's own labour and input costs rise.
But could India rival China as a clothing exporter? It might have the required size, structure and potential inputs - but its problems include on-time delivery, labour productivity, staff turnover and a weak work commitment. A recent conference suggests this could be addressed by reorganising the industry to play to its strengths.
Either way, the combined apparel market of China and India is forecast to grow to US$740bn by 2025, according to a new report. It also estimates the global apparel market will nearly double to cross the US$2 trillion mark in just over a decade's time.
But garments from Vietnam have been added to a US government list over concerns that some production uses forced or indentured child labour. The Bureau of International Labor Affairs said cases of forced child labour predominantly occur in small, unregistered workplaces.
The US government has also set out a series of steps that Bangladesh needs to implement - including improved worker rights and worker safety in the country's garment industry - if it wants GSP trade preferences to be restored.
Among its recommendations are hiring more government labour, fire and building inspectors, and improved training. It also wants to see increased fines and other sanctions applied to ready-made garment and knitwear factories that fail to comply.
And the Bangladeshi government has joined representatives from the country's employers' and workers' organisations to sign a national plan of action on fire safety and structural integrity in the garment sector. Its goal is to speed the momentum for improvements in factory safety.
And a month after pledging to double the size of its business by 2016, fast-growing sportswear business Under Armour has unveiled a 23% increase in revenues to US$455m and net profit of $18m - more than twice last year's figure.
It also looks set to be a mixed picture for apparel retailers this back-to-school season, as increased taxes and general economic worries continue to play on consumers' minds. But many will look to cut corners elsewhere and head to department stores to get the best deals this year.
Companies: Under Armour
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