The textile and clothing industry maybe almost unrecognisable from its organisation today in ten years’ time: Chinese-owned offshore production; unstoppable e-commerce, demand for eco-textiles, shifting luxury markets to Asia’s new middle class, and higher prices for everyone, are just some predictions.
Jacques Hervé Levy, branch director at l’Institut Français de l’Habillement et du Textile (IFTH) in France, says that China’s current hold on the textile industry production will expand, with its companies outsourcing work overseas.
“We don’t know where garments will be produced, but they will be owned and managed by the Chinese industry. If you look at what’s going on in Africa, much of the production is owned by Chinese industry already,” he explains.
But this will not be the whole picture. As China’s clothing and textile industry gets more sophisticated, some western brands will seek to seize back control of their own manufacturing, repatriating work back home.
“With the economic crisis, we saw some people bringing part of their production back to Europe,” Levy says. “It’s not small players either, it’s big companies. Some US companies have also been taking production back from China, and from Mexico.”
Levy predicts this trend will continue on a small scale into the future as luxury brands try to inject a sense of “responsibility” back into their image.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Emerging market demand
One thing that hasn’t left China, however, is demand. China and emerging markets such as Russia, India and Brazil are expected to become their own sales hotspots for luxury and fashion items in the next decade.
“Increasingly important are those developing countries that are recording high growth rates and where middle and higher classes are growing: China, Brazil, Russia, India,” says Christian Schindler, director of the International Textile Manufacturers Federation (ITMF).
“These markets are already important, and will be more important in the future. The Middle East will be, too. Where you have growing economies you’re going to have high end products.”
Costs for all textiles – not just luxury clothing – could also be higher in ten years, and rise even more in the long term, Schindler says, as countries such as Vietnam and Bangladesh – some of the last low-cost frontiers on the planet – become more expensive to manufacture in.
“There’s always pressure to relocate, but this is not an endless story because there’s only one world and eventually there will be no countries left to relocate to,” Schindler explains. “Costs will start rising and textiles will become more expensive in the mid and long run.”
Cost-saving opportunities still abound, however, and Schindler predicts it will be energy and water saving initiatives that will really cut costs, while meeting consumer demand for sustainability.
“The big trend which is not going to disappear will be sustainability,” he says. “The manufacturing industry is certainly focusing on how to reduce energy consumption, reduce waste water and water consumption in general.”
For example, he says a spinning company he spoke to recently implemented new energy saving technology, and experienced a reduction in energy costs by 30% to 50%.
Another cost-saving and business-boosting technology – when used well – is the internet.
Increasing numbers of companies are expected to jump onto the e-commerce bandwagon in the next decade, to take advantage of the growing consumer acceptance of researching and shopping for products online, according to Alessandro Bedeschi secretary general of the European Association for Fashion Retailers (AEDT).
“I think you see every day more and more companies and brands taking advantage of social marketing, social networks, and e-commerce,” he says. “This is an increasing trend that can only become more and more important. New generations and younger consumers are already so used to shopping online or doing research before they go to the physical shops.”
But he believes retailers shouldn’t expect online shopping to wipe out their street-level stores.