Introduction

The fast-growing Thai fashion industry, encompassing leather, jewellery and garment industries, contributes to Bangkok's creative and energetic ambiance. However, fashion is still a young industry in Thailand compared to European fashion houses, as its first brands appeared only some 25 years ago. Nevertheless, in terms of market range, the Thai fashion industry has grown to cover near the whole pret-a-porter sector: women's, men's, and children's fashions are all well-represented in Bangkok's shop windows.

Fashion in this report will focus on the garment, leather based and gems and jewellery industry.

Thailand has strong traditions for high-quality fabrics such as Thai silk. Today, the industry has an important contributing role to the country's economy, accounting for approximately 17 percent of total GDP.

The government has taken action to further strengthen this industry by setting up the "Bangkok Fashion City" project launched in February 2004, which serves to turn Bangkok into a fashion hub in the South East Asia region and into a world fashion centre by the year 2012. The cabinet has approved a budget of THB 1.8 billion (DKK 282 million) plus THB 487.9 million (DKK 76.5 million) from the private sector for the project in 2005. Its goals are to promote all aspects of Thailand's fashion trade covering textiles, garments, jewellery and ornaments, footwear and leather industries on a grand scale and to establish the image of Bangkok as a centre of fashion designs.

Full liberalization in textile quotas under World Trade Organization (WTO) commitments that came into effect January 1, 2005, has caused tougher competition between WTO member states in global textile markets and Thailand is becoming less competitive against cheap labour countries such as China, Indonesia, India, Pakistan, and Vietnam. Thai manufacturers should manufacture higher quality products in order to compete with high quality product countries such as Hong Kong, Korea, and Taiwan. Furthermore improvement of logistics and supply chain systems is a must in order to gain better efficiency and promptness in the industry.

2: Market indicators

2.1: Market structure

The far most central sector in the fashion industry is textile. It consists of six different industries (the synthetic fibre industry, the spinning industry, the weaving industry, the knitting industry, the garment industry and the industry of bleaching, dying, and finishing) with the garment industry being the largest in terms of production output.

The Thai textile industry is pursuing high quality, value-added strategy to succeed in the quota-free, competitive environment. The quality of the fabrics in Thailand is generally high and continuously improving. The silk quality is especially good, and Thailand is particularly strong in design such as Jim Thompson silk.

The government-sponsored programs to advance the Thai fashion industry beyond OEM-based production to higher value-added design and brand development work are preparing the industry further to compete in the Post-Multifibre Agreement (MFA) environment.

To be prepared for the MFA the textile and garment industry has invested more than US$45(DKK 268) million in imported machinery over four years for fibre manufacturing, spinning, weaving, dyeing, printing and finishing.

The numbers below show the increase in imports and exports from Thailand of textile and clothing. The development should be considered in the context of Chinas rapid growth within the last years particularly within textile and clothing industry.