Apparel industry plays a pivotal role in a countrys economy in terms of revenue generation, foreign exchange, foreign investment, and employment generation. Global apparel market is estimated to be around $600 billion USD in 2007. The industry is currently experiencing a period of growth, driven by strong manipulating factors. Apparel segment has grown at a pace of 15% every year since 2003. The growth rate is far more outstanding for mainstream apparels. Convergence of trends of different countries, changes in the preferences of people, and growth in disposable income have all contributed to the drastic expansion of the apparel industry. Apparel sector has proactively utilized the emerging opportunities and has set a bench mark to the other industries.

 

Country-wise Performance:

 

Major apparel exporting countries in the global market are China, Hong Kong, Philippines, Bangladesh, Indonesia, India, Thailand, Pakistan, Sri Lanka, USA, Mexico, Germany, Italy, and Malaysia. These 14 leading apparel exporting countries accounted for 82% of the total apparel sales during 2007.

 

Countries that had a major part of their exports to US suffered a setback during the Wall Street meltdown. Despite the market crash, apparel manufacturing firms from Central America are predicted to have a strong growth for the next five years (2008-2014). Growth of apparel industries of other countries is mainly dependent on the Chinese economy. Deteriorating competitiveness of Chinese apparel firms in the global market, appreciation of Chinese currency, and increase in the cost of raw materials and labor influence the countrys apparel market causing a downslide in their economy. Countries such as Bangladesh and Vietnam are expected to surpass India and China in the coming years. Vietnams apparel exports increased by 31% during 2007, showing rosy future to its apparel industry.

 

Apparel exports of Hong Kong witnessed a decline during 2007 and 08, as its manufacturing operations were shifted to China. Turkey also experienced a decline in the apparel export figures during 2007-08.

 

Mexican apparel exports fell by 7% as its major importers of EU and US shifted their business to Asian countries like India and China.

 

Future Prospects:

 

Global apparel industry is all set to grow in the coming five years. Industry analysts predict a drastic change in the apparel market and estimate its value to grow from the current $600 billion USD to reach $1,781.7 billion USD by the end of 2010. Manufacturers now, adopt new strategies to expand the market for their products. Simultaneously, consumers are more aware and demanding comparatively with the past. Due to globalization, they have more choices in quality, design and price. Apparel industry should focus on systems and technology to reduce cost and lead times through supply chain efficiencies. Large industry players are going in for vertical integration while small players are developing their efficiency. More FDI will come into the developing countries strengthening its apparel sector. Operational excellence and satisfying the buyer requirements will become more vital then ever before.

 

 

Apparel industry is labor intensive, and this makes its operations more complex. The countries endowed with the availability of abundant and cheap labor will be able to use this opportunity to initiate a national industrialization.

 

Global apparel industry will face challenges like innovation, rapid changes in fads, and the time taken to market the outfits. Its focus is now shifting towards developing countries, which constitute a huge portion of their exports. An analysis of the industry trends during the past decade reveals the crystal clear fact that exports from industrialized countries show a declining trend, whereas export figures from developing countries show increasing numbers. Countries from the Asian Pacific region will constitute to a huge volume of exports in the near future.

 

Risk Factors:

 

Despite the positive factors promising a fruitful future for global apparel industries, the industry is not free from its share of hurdles affecting the upward trend of the apparel graph. Short product life cycle, volatile consumer preferences, and long, inflexible supply chain makes its operations more complex.

 

  • Demand for apparels has an ever increasing trend. But in many countries, the production facilities and infrastructure are not adequate enough to match with the growing demand. Industry analysts predict that the industry will grow drastically in the next five years. Along with it new fabrics, innovative textiles, electro textiles, medical textiles, and apparels with special effects will also come in fad. To keep pace with the demand for these kinds of apparels, manufacturers should update their machineries, and improve their efficiency and speed of their supply chain, so as to give the desired output within a limited time.

  • Apparel industry, being fashion driven, is strongly influenced by the changing fashion trends and inventory aging. Due to globalization, and media exposure consumers are now aware of the ongoing trends in countries all across the globe. Apart from this, there is a sizable increase in the amount of disposable income also. This creates an unpredictable trend in the apparel market. Fads appear suddenly, and last for a very short time. Manufacturers should be able to keep abreast of the changing fashion and consumer preferences.

  • Importers of developed countries face stiff competition from countries like China, as the country is proficient to manufacture apparels within a short period of time and also sell them in the market at a very competitive price.

  • Still, in many developing countries, apparel industries are underdeveloped, exploited, and mismanaged. Sweatshops are prevalent in the garment industry of many countries with abhorrently low wages, and poor working conditions.

  • There are some international trade laws that favor developed countries. This affects the exports of developing countries.


Pinnacle Brands and Retailers:

 

Specialty retailers like American Eagle Outfitters Inc, and Abercrombie & Fitch Co, in US are performing well in the apparel market. Followed by them are Banana Republic, and Marcus Group. Gap Inc experienced a declining trend during the past year. The resurrection of professional clothing in place of causal wears is asserted to have a steady growth. Sara Lee, one of the largest apparel manufacturer in US plans for a fundamental reshaping to de-verticalize its products. Many reputed brands including Wonderbras, Hanes, Playtex, and Bali come under their product line. Van-Heusen, Levi Strauss, and Philips are also putting their efforts to build global brands. Industry sources assert that retail giants like Design and H&M from Europe, Chemistry of US, Splash of the Middle East, and S Oliver of Spain are gearing up to meet the challenges in the global apparel market. Followed by them are other retailers like Bandwagon, Promod, Gador, Estee Lauder and Hogl.

 

As economy improves and consumers keep on updating their wardrobes, apparel industry foresees a promising future. Apparel industry is all set to grow in a rapid speed and at a high pace providing employment to many people, influencing the economic growth of a country.

 

References:

 

  1. http://www.fashionproducts.com
  2. http://www.thehindubusinessline.com
  3. http://www.allbusiness.com
  4. http://www.independent.org
  5. http://www.financialexpress.com