Blog: Leonie BarrieChina still dominates apparel sourcing

Leonie Barrie | 12 February 2018

The latest full-year data on US apparel import trends for 2017 suggests China will remain the dominant sourcing region for some time to come.

An analysis of the figures by just-style shows the average unit price of China's apparel exports to the US has dropped steadily over the last seven years – with a decline of 4.8% in the last year alone.

The fall in prices comes despite claims US buyers are seeking alternative sources for clothing amid concerns China is losing its competitiveness. Indeed, a further look at the import numbers shows China's share of US apparel import volumes currently stands at 41.9%, little changed from the 41.53% it held in 2016, and marginally lower than the share of 41.98% it held in 2010.

But Vietnam's garment sector has benefited, too, with its share of the US market in volume terms having risen from 11.52% in 2015 to 13.28% in 2017.

There's no "golden ticket" when it comes to building a balanced sourcing strategy, especially when faced with the need for faster speed-to-market and customer demands for 'buy now/wear now', according to Angela Gaskell, head of sourcing and compliance manager at UK-based plus-size fashion retailer N Brown Group.

But understanding your customer, identifying the right strategy for your company, building trust and working in partnership with your suppliers are all steps in the right direction.

UK value retailer Primark has published its global supplier list just weeks after being criticised for not publicly disclosing the factories that produce its clothes. The company sources from 1,071 factories in 31 countries.

A new US$1.5bn Algerian joint venture for Turkish denim giant Taypa is being described as the largest clothing and textile manufacturing facility in the Europe and Eastern Mediterranean basin – and is due to start production this year.

While Spanish clothing giant Inditex has opened a buying office in Pakistan in a move that could double its imports from the country.

A group of public and private stakeholders in the European textile, clothing, leather and footwear industries has also joined forces to create an EU-wide strategy to boost skills and attract new workers to the sector.

And Latin American apparel makers and retailers are eyeing blockchain technologies and delving into Industry 4.0 manufacturing to tackle rising contraband, slash red tape and bolster sales.

International cotton prices are continuing to move upward, with the Cotlook A index during January averaging 91 cents per pound. This compares with a 2017/18 season to date average of 82.4 cents per pound.

The falling value of the US dollar is partly to blame for the rising price of cotton, due to higher demand for US cotton priced in depreciating dollars. Amid the NAFTA negotiations and ongoing uncertainty as Donald Trump went to Davos, Robert Antoshak, managing director at Olah Inc, took a look at possible ramifications for the textile and clothing sector.

And after a wave of sell-offs on global stock markets early last week, we asked whether there is cause for concern? The answer is yes – but there is also a need for some perspective and there is no reason to believe that a global economic recession is imminent or inevitable.

Meanwhile in other news, Lululemon Athletica's CEO has left suddenly amid allegations of misconduct; a British firm is investing US$100m in a textile and garment facility in Ethiopia; and House of Fraser has had credit insurance withdrawn on some of its suppliers.

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