Blog: Leonie BarrieIs China losing its sheen?

Leonie Barrie | 12 August 2013

Data released last week showed that US apparel imports continued to climb in June - with double-digit gains in shipments from Bangladesh and Vietnam helping offset declines from China.

The figures, which coincide with retailers starting to bring more merchandise into the country ahead of the back-to-school season, show that while China remains the largest apparel supplier, its shipments were lower than a year earlier. In contrast, second-largest supplier Vietnam showed the strongest growth, followed by Bangladesh in third position.

The figures suggest there has so far been no negative impact on orders from Bangladesh following the Rana Plaza building collapse earlier this year and wider factory safety issues.

The numbers also lend weight to concerns that China is losing its sheen as the ultimate low-wage, high-growth sourcing and manufacturing destination. New research pinpoints 16 nations in Africa, Asia and Latin America as the likely pretenders to China's crown.

One of the biggest and most fundamental differences between Bangladesh and rival Cambodia is that the Cambodian government and industry are held accountable for making the necessary improvements to factory working conditions. And this will help ensure Cambodia moves up the economic ladder.

But while pressure groups are adept at focusing on social and environmental scandals linked to the clothing industry, the impact of buyer behaviour rarely gets a look-in. Yet the impact of unpredictable weather, over-geared retailers and uncertain consumers magnifies as it passes down the supply chain.

While most US apparel retailers posted same-store sale gains last month, concerns were raised that many also missed expectations in a still-challenging trading environment. However, despite a slow start to the key back-to-school season, observers expect consumers to start shopping in earnest in August.

And German sportswear brand Adidas lowered its full-year outlook and said it expects the "lacklustre" trading environment in Europe - particularly Spain and Italy - to continue to weigh on sales and profit growth.



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