Outsourcing textile and apparel production is a necessary step along the supply chain for many large international brands which, more often than not, have long-standing relationships with manufacturers abroad.

These partnerships have to start from somewhere, though - and with economic development continuing to grow in the BRICs (Brazil, Russia, India, China) and other emerging market countries, there are many third-party companies and services that can help international buyers choose the right manufacturer.

Shri G Manikandan, CEO of Tirupur, India-based Apparel Global Consulting (AGC) says his company is constantly in search of apparel importers, retailers and agents in Europe who require outsourcing services.

Most international brands, he explains, operate under a couple of different methods when it comes to outsourcing. The first is through sourcing offices such as AGC: "This gives [brands] more choices in getting into factories...and also to have control over price and merchandise," Manikandan says.

The second method, he continues, is through liaison offices. "These are mostly operated by selected local people...to ensure that the code of conduct and other technical requirements are followed by the factory."

Mantas Balcius, a retail consultant and partner at Entry-India (which works with textile brands that require assistance while doing business or collaborating in India) says that since the outsourcing process involves multiple risks, sourcing agents can provide an increased level of assurance as "it is difficult for a foreigner to evaluate the quality of a manufacturer."

Despite the services in place, however, Manikandan admits that outsourcing from India has not been encouraging in recent years. This is mainly due to external factors like the economic recession in Europe and the US, along with internal factors such as yarn price fluctuations, the government's restrictive cotton policy and increasing demand to serve India's domestic market.

Furthermore, the presence of multinational corporations in Indian retail, currency conversion fluctuations, and dyeing plant closures at Tirupur (where 700 bleaching and dyeing units and treatment plants were shut down in 2011), has not helped.

One advantage India does have going for it, though, is in terms of consumer trends, saya Balcius: organic products in a wide range of textile categories are likely to continue to grow fast, which helps India "due to low levels of industrialisation in agriculture."

China bucks the trend
In China - where outsourcing remains steady - third party service provider ShiningHub, which specialises in the apparel and textile trade, helps international companies outsource through its "specially designed and transparent free online inquiry bidding system and free online order control system."

Companies can post enquiries on ShiningHub's website, receive quotes from factories all over China within 24 hours, and place orders with factories directly. Through its order control system, companies can also view and monitor the progress of their order online.

"With the help of information sharing on the internet and transparent supervision, what international apparel enterprises need in the future is a reliable and superior one-stop third-party service provider to fulfil those tasks cost-effectively and efficiently," says a spokesperson for ShiningHub.

And although China has felt some impact from the economic slowdown in terms of outsourcing, speciality fabrics and clothes are becoming increasingly popular amongst foreign buyers. These include "outdoor sports fabric and apparel that are waterproof and breathable, anti-mosquito or UV-blocking, hemp fibre and bamboo fibre," according to the spokesperson.

Losing outsourcing ground
In the less obvious outsourcing destination of Brazil, Cezar Batista, director of Assist Sourcing, says that for the last five years costs have been rising dramatically and today, instead of exporting apparel, the country has actually become a net importer from China, India and other far East countries.

Brazil has lost a lot of ground in recent years as an outsourcing area in the apparel and textile sectors, says Batista, largely due to increased labour costs and an exchange rate that is "less than favourable" for exports.

Despite the slowdown, though, the use of a sourcing agent is still the most effective way to find suppliers. "For a customer to go on his own looking for the right partner is very time consuming, and he may end up buying from a company that is not designed to attend to his specific needs, be it in terms of product, quality, volumes, price, service or even culture."

He adds that the only real area of growth in Brazil for exports is cotton fibre, as the country is the third largest exporter of cotton in the world today.

Overall, while outsourcing is still happening from the BRICs, according to Avedis Seferian, president and CEO of Worldwide Responsible Accredited Production (WRAP), most of the attention these countries have been getting from the West in recent years has been more in terms of potential markets to sell to, rather than to outsource from.

As the Chinese economy grows, for instance, the cost of living is going up, says Seferian, which is putting upward pressure on labour costs and wages. Investors are instead putting their money into factories in lower cost emerging market countries in the region, such as Bangladesh, Vietnam and Cambodia.

From the apparel point of view, he continues, Brazil and Russia are not major players as sourcing destinations, and companies are looking at them to try and cultivate as markets, instead.

Professor Alan Braithwaite, interim director of the Supply Chain Research Centre at Cranfield University in the UK, agrees that garment outsourcing in Russia is a particularly small market.

"It's not a place that people are naturally looking [at]...and it's not really a corner of the market that Russia has really gone for."

He adds that, as a whole, the "second level of emerging countries," such as Turkey, Morocco, Tunisia and Egypt are becoming significant outsourcing destinations, as they can generate garments on shorter lead times, and at lower costs.

Click on the links below to read other articles in this management briefing:

just-style management briefing: Suppliers developing their own design hubs

just-style management briefing: International brands eye emerging markets

just-style management briefing: New outsourcing players challenge export giants