Speed and flexibility are new normal in exports
Asmara, meaning love and passion in Indonesian, is a global fashion company that operates in 13 countries with sourcing offices in nine and employs more than 1,100 people. The company acts as a bridge between brands and suppliers. EVP-Technology, Sustainability and Marketing, Asmara Group Nitiin Gupta exchanges his views on blockchain, the US-China trade war and Industry 4.0 along with an overview of the latest at Asmara.
What are the sustainability goals set at Asmara India and the Group in general?
We are consciously working towards encouraging our clients to move towards more sustainable raw materials, and not just linked with the marketing of such a move. We are actively working on promoting BCI cotton as well as recycled polyester. We are also working on establishing our internal sustainability policy which looks minutely on our carbon footprint. This includes changes in our energy consumption by shifting to LED lights, reduction in paper use and shifting to FSC-approved recycled paper, better wastewater management including enhancing our rainwater harvesting systems, setting up solar panels for electrification or water heating, etc. Apart from that we are developing tech solutions that will switch all technical and quality reports from a traditional physical copy to a digitised paperless system.
What is size of the global apparel industry? What is the expected growth rate by 2020?
The global fashion industry is valued at nearly $3 trillion and contributes nearly 2 per cent to the global GDP. The industry seems to have turned a corner in 2017 and the trends emerging are positive for the industry to grow by 3.5-5 per cent CAGR between 2017 and 2020, with a few countries outperforming others in relative terms, as all industries are not growing evenly.
Which major factors have influenced apparel sourcing in a big way in the last 5 years?
The industry has seen dramatic changes, especially in the last five years. While cost was one of the main aspects of sourcing decisions five years ago, today it's led by technology, digitalisation and sustainable practices in the supply chain. However, the biggest factor is the need for speed. There has been a shortening in the length of the fashion cycle and companies that have stayed agile have seen growth.
Will the US-China trade war be beneficial to Indian garment exporters?
It is too early to say if the US-China trade war will benefit the Indian garment industry, as the dynamics of manufacturing and production in China are very different from India. Raw materials particularly synthetics are of a superior quality in China, while product categories are much wider than India's. Some of our larger export houses with a highly organised operation are already seeing an uptick in inquiries if not orders, particularly in specific categories like soft dressing and bottoms. However, the main beneficiaries from the trade war will be countries like Vietnam and Cambodia who offer a product portfolio that is similar to China's.
Do you plan to integrate systems at Asmara with Industry 4.0?
Industry 4.0 is a very interesting idea whose time has come. We have certain systems and applications that have been beat-tested and a few others in development which focus on the use of AI and machine learning to take over some of the more mundane and unproductive processes of our associates. We hope to update you in a few months on the success of these trials.
What initiatives have been taken to increase sustainable production and consumption patterns in the garment industry?
On the production side, we are already seeing a lot of initiatives, both led by activism or by policy implementation. Whether that is mills and laundries adhering to effluent treatment regulations, setting up new plants that are zero discharge, focus on using sustainable raw materials like recycled polyester or BCI Cotton, reducing water consumption in the manufacturing processes, or improving efficiencies to ensure better resource management, manufacturers are taking the lead in sustainability. We are also seeing a greater demand for transparency on the consumption side, especially in the case of millennials and Gen Zs. There is an increased awareness in this new consumer on the negative social, health or environmental impacts of their consumption. There is however, great pressure as consumers do not expect to spend more for sustainable products and the expectation is that sustainability will be a new normal for the industry.
What is the contribution of menswear, womenswear and kidswear to Asmara's revenue mix?
Asmara is a lifestyle company and works across every aspect of personal fashion. Women's apparel and accessories contribute nearly 50 per cent, followed by men's apparel and accessories at 40 per cent, and kidswear at 10 per cent to our revenue.
What are your thoughts on blockchain?
Blockchain will play a huge role in transforming the apparel industry towards a more transparent supply chain. Physical-digital link between the product and its digital identity, digital chain of custody, etc, will greatly help identify counterfeits from originals. We continue to watch the progress of blockchain and what new possibilities emerge for our business.
Which new markets do you plan to tap in the future?
Our attention continues to remain the best partner for our clients and vendors, and we continue to build internal bench strength together with skillsets to cater to every future need of our clients. We feel that our operational excellence, innovation and philosophy offer a unique platform for us to enter new markets and make deeper inroads in ones we already have a foothold in.
What are the core competencies of Asmara Group?
Asmara comes from the Indonesian word which means love and passion. We pride ourselves with being one of the youngest and most progressive companies in the sourcing industry, attracting some of the best talent in the world to come and work as interns or full-time associates. We credit our company's open and modern outlook that has led to people from 18 nationalities working in the organisation. We add human value to our business at every level. We are extremely product focused. Research and development form a very critical service that we provide to both our clients and vendors. With internal forecasting services, market and business intelligence modules and design offices in New York, Barcelona and Melbourne, we bring a very high level of expertise on the table.
As a global sourcing platform, we cater to every need of our clients across the fashion lifestyle, with countries having specialised expertise in products from intimates, sweaters right up to outerwear and technical outdoor clothing and everything in between. Technology is at the centre of our next level growth with specific applications developed for our TNA management, supply chain optimisation and a dedicated platform for product development and trends. Apart from applications, we have dedicated teams in 3D virtual design and are actively working with clients to effectively use this technology to reduce time to market, cost and effort in product development and technical design or fits.
What are the top sustainable processes followed at Asmara Group?
Sustainability in product has been a major focus area at Asmara. We are already helping brands produce clothing and accessories with recycled polyester, BCI cotton and organic cotton in India, along with the use of traceable viscose across Asia, recycled polyester padding made from PET bottles for outerwear in Vietnam, traceable down and feathers inspected by IDFL (International Down & Feather Laboratory & Institute) and vegan leather products.
What are your expectations from the textiles policy?
India is losing its global competitive edge especially in apparel exports over the last few years. I am hoping that the textiles policy will address issues that have challenged our export and manufacturing. I am also wishing that there are incentives and encouragement to move towards digitalisation and import of technology in this regard should be made duty-free. Job creation especially for the female work force is another expectation. The policy should also lay emphasis and encourage sustainable raw material production, practices and business processes.
What are the challenges curbing the growth of the Indian apparel industry?
The industry continues to be fragmented and a large part of industry is in the MSME segment with low adoption of technology as well as best practices. Fortunately, the worst effects of demonetisation and GST implementation are waning, but other challenges like the reduced export incentives, global price pressures and competition, cotton price volatility, logistics shortfall, delay in infrastructure projects are affecting the growth. We have also not focused on enhancing our raw material capabilities particularly in fabric production and processing as well as a superior quality of polyester yarn is hurting our competitiveness. Speed and flexibility are new normal in the export industry, and there is greater need for the industry to move faster with innovation to meet the market changes.
Any expansions planned for 2018-19? Can we expect any major announcements from the Asmara Group this year?
This has been an action-packed year for us. We have commenced operations in Myanmar and Morocco for two of our main clients to tap into what these regions offer in the global sourcing world. We will also be setting up the Asmara Foundation towards the end of the year as our commitment to making positive impact in communities where our associates live and work. The foundation will formalise our global efforts in CSR as well as sustainability and mobilise both funding and man hours of our associates, where we can share our knowledge and skills and lead campaigns as well as participate in disaster relief. (HO)
