Are there any alternative fibres that are coming to replace cotton?
There is always competition when it comes to fibres. I know Tencel has been marketing in India. Polyester from a price standpoint is also going to be a competition for brands and retailers as they consider what fibres they are using. But cotton offers many advantages such as comfort, quality, softness, environmental friendliness, and others. Cotton is also the most preferred fibre for majority of consumers across the globe and especially in India where cotton in highly preferred over other fibres like polyester or rayon/Tencel. I think there is a very strong case to be made that cotton will continue to share large part of market here. But there always will be competition.
Are any of the BCI initiatives a part of your research?
We are for all cotton; so obviously BCI falls under that. We have our own initiative for US cotton called Cotton Trust Protocol, that was launched this year. From a sustainability standpoint, the US has been very stringent on the measures for sustainability and being sustainable because we are governed by the USDA (United States Department of Agriculture). But we want to continue to be more sustainable, so we came out with a ten-year goal or 20-25 on improving the sustainability of cotton in the US even more. The goals include increasing soil carbon, increase land efficiency, decreasing greenhouse gases, decreasing energy (consumption like) water. All the big areas that you would think of from sustainability standpoint of growing cotton. US. cotton continues to be on the forefront of sustainability and we will continue to ensure that US cotton is the best and most sustainable in the world.
What is the impact of BCI initiatives on the global cotton market?
That question is probably best suited for BCI, as they would have a better understanding of their impacts.
What kind of impact has the US-China trade war had on the global cotton trade market?
With the latest round of increases (U.S. hit Chinese-made apparel with tariff increases September 1st), the trade dispute now directly touches all stages of the supply chain - from fibre to finished apparel.
The US is the world's largest exporter of cotton fibre. China is the world's largest cotton importer. The US had been the dominant source of fibre to China. Even though China increased its imports 70 per cent in the 2018/19 crop year, the US exported less cotton to China because of the tariffs.
The US is the world largest importer of apparel. China is the world's largest apparel exporter. Although the US had been threatening China with tariff increases for more than a year, it is only in the latest trade data - for September and October - that we have started to see some movement away from China. It will likely be another 8-10 months until we see the complete effects of the tariff increase on U.S. apparel sourcing.
Beyond these direct effects on the apparel supply chain, an even larger impact has likely come from the cumulative consequences of smaller orders across industries/countries on global macroeconomic conditions. The slowdown in global economic growth has been coincident with escalation of the trade dispute. Slower economic growth is correlated with slower demand for fibre and apparel, and, in turn, has contributed to even lower order volumes and lower fibre prices.
What will be the production and consumption of cotton in China as a result of the trade war?
Over the past several years, Chinese production has shifted to Xinjiang province, where there are still price guarantees in place. As a result, the trade war is not expected to have much of an impact on Chinese cotton production.
China has been suffering from slower economic growth. This has been accompanied by slower demand growth for the domestic apparel market. Although it still will be a few more months until we have a full understanding of the effects of US tariffs on China-made apparel, a slowdown in US orders from China can be expected. Weaker domestic and international demand for Chinese apparel should weigh on demand at each stage of the Chinese supply chain, including spinning.
Because the import duty is high in the US and EU on import like garments from China now. So, are you seeing work from China being spread into other neighboring countries?
There has been some movement in sourcing away from China. Vietnam, Bangladesh, and India have benefitted in certain product categories. However, China remains the dominant location for US apparel sourcing and it will take shifts on a scale much larger than what we have seen so far to change that.
For several years, there have been incentives, like the promise of the TPP agreement, that encouraged movement away from China but there was not much of change (of course, TPP did not happen).
China offers a scale and breadth of options unmatched by many other countries. China has technical expertise and the infrastructure to deliver. A commonly cited reason for companies keeping sourcing in China is that China maintains contract sanctity, shipping what was promised when promised. There are reasons why sourcing has not moved away from China in the past, and the value of those reasons will be balanced against the cost of tariffs as long as tariffs are in place.
Are brands a part of this research too?
Sometimes. But we don't focus a lot on brands themselves because we are for the all-cotton, so we try to get cotton into every brand if possible. Sometimes we are looking at different brands which are most popular, so that we can understand from an internal strategy standpoint are the key player to focus on when discussing how to drive more cotton products into the marketplace-just maybe from that standpoint. But not normally a core part of our research.
Is there a pattern in consuming more clothes that are made in India, not necessarily made by a foreign brand? Is there any conscious decision that goes into sourcing products that are made locally?
In my consumer research in India, from the consumer standpoint, I don't think that they are looking specifically for either clothes made in India or locally. I think in some other areas there might be some interest in that but again it's probably pretty small for the most part. When we talk about what are the primary factors for shopping for clothing, country of origin or where an item is made would be towards the bottom of the list. Most important things would be like fit, comfort, price, cotton right at the top. There's probably a niche consumer that might be looking for locally sourced clothes, but from our research we don't see many Indian consumers consciously seeking it out.
Are there any tier-II towns and tier-III towns that have been covered in the research?
We did do a few but I need to double-check. In our consumers research we cover the non-metros of Lucknow, Indore, Coimbatore, Patna, Ahmedabad, Jaipur Guwahati. And we are looking to continuing to expand into more non-metros each year.
Is the consumption of textiles and apparel growing via e-commerce, social media?
Definitely. We have seen in the last couple of years a very significant growth of online apparel, growing from ₹95 billion in 2014 to over ₹400 billion last year. There are some things that consumers are concerned about shopping online but the convenience of being able to shop from stores that may not be in your local facility has been very appealing to most Indian consumers, understanding the fit, quality are the number one global issues for consumers when looking for shopping online for apparel. But it is still going to grow very substantially here in India just from the opportunity standpoint as the infrastructure growth or opportunity may not necessarily be there for some brands and retailers. So, I think we are looking over the next five years that online apparel sales are expected to double again. Online apparel sales are projected to be about over 17 per cent of all apparels sales by 2022 in India.
What are the major influences while purchasing a garment or home textile product for an Indian consumer?
Fit normally is #1-that's probably the biggest driver and then comfort. With a shift towards casualwear comfort is becoming a little more important. Consumers really want to be comfortable when it comes to their clothing and I think cotton plays a major role in giving consumers that. Quality is the third most important thing and is actually very important here in India, maybe more than we see in most of the other countries. Next is price which always plays a factor. It's got to be the right price. Those are the biggest factors that you see while purchasing clothes here in India.
How is the research carried out? Through e-mail or physically?
Here in India its face to face because internet penetration is still only 40 per cent. So, going online makes it hard to get a representative sample. We would like to move it online because it is less expensive but we are sticking with face to face interviews so that we can be more representative of India. (HO)