Regionalisation, not globalisation, is the current trend in apparel sourcing. The evidence suggests that in the not too distant future suppliers will be compartmentalised into two regions - China and not-China - argues Mike Todaro.

At a recent apparel industry meeting, one of the pronouncements was that: "The biggest trend in the garment industry today is globalisation."

But it's not. Globalisation is yesterday's news. This is the beginning of the era of 'regionalisation.'

The World Trade Organisation swung the pendulum of each nation's sovereignty all the way to a no-quota borderless world. Now the pendulum is swinging back to rampant regionalisation…or else.

Is China about to become the world's plant floor? Is Wal-Mart on its way to being the world's retail floor? And what of the supplier nations to China and Wal-Mart wrapped like a DNA chain around this channel? What is to become of them, of nations like Mexico, of regions like Central America, or entire continents like Africa?

China and not-China
Earlier this year, our network, working with the fibre maker Unifi, surveyed leading sourcing executives in the US - brands, manufacturers (really marketers who source but do not make what they sell) and retailers.

We asked them their sourcing plans beyond 2005. The answer was that they would source from two regions: China and not-China. They would source 70-80 per cent of their merchandise from China and 20-30 per cent from everywhere else or the so-called 'not-China.'

So, right there, you do not have globalisation. You have China and the heart-stopping fear of wondering whether your nation is to be one of the 20-30 per cent in the land of not-China.

But that's not all.

In the midst of consolidation in retail and brands (Liz Claiborne, for example, has expanded from 4 to nearly thirty brands), those buying for these massive companies want to do so from equally massive suppliers.

And the business models epitomising these 'massive' firms are mostly in China, or Hong Kong or somewhere else in the Far East. One sweater manufacturer in China which supplies US retailers employs 45,000 people - not to mention the ability to do everything full package, full service, on-line, on-time, and spec-specific.

Fewer nations
Speaking at the meeting in Istanbul, one brand said it used to source from 50 nations; this is now down to 35 and is on its way to being reduced to maybe ten. A major retailer mentioned similar numbers. A manufacturer said the same thing. By this, they not only mean fewer - and bigger - suppliers. They mean fewer nations.

So the trend is as far from globalisation as it's possible to be. In fact, 'un-globalisation' would be a better term. More accurately, the trend is that the end-of-game is in sight for entire national apparel and textile industries excluded from 'not-China.'

Expert Analysis

The 2003 Clothesource Handbook of Apparel Sourcing
Since its introduction in 2002, The Clothesource Handbook of Apparel Sourcing has become the most widely recognised and respected manual of sourcing information in the clothing business. It is used by major multiple stores, manufacturers of all sizes, and wholesale organisations throughout the world, to find the best possible sources for their production. Find out more here.


What are some of the choices in the land of not-China? Regional trade blocs are one response. New, fresh, exciting tariffs are yet another. And most importantly of all - and generally missing worldwide, except in China - are entirely re-engineered, responsive, responsible and risk-ready business models.

As Rod Birkins of JCPenney Sourcing said: "The world's (sourcing) business model is about to change. Is yours?"

Kellwood's Jim Jacobsen added: "US industrialists have adapted to change and are prospering as a result".

One indication of the change needed comes from a senior brand sourcing executive who said: "We'll send our suppliers two things only - a sketch and a cheque, period. They'll do everything else."

Andy Bond of the [Wal-Mart-owned] fashion line George said: "The consumer does not respect our [apparel industry] time frames." Meaning they want it now, fresh, fast, furiously churning and cheap.

All of which supports the fact that what we all ought to be talking about, what nations ought to be planning for, and what regions ought to be acting like, is the land of 'not-China.'

Mike Todaro is the managing director of Atlanta, USA-based AAPNetwork (