Fashion & apparel companies rethinking on traditional supply chains

“While shifting of production and sourcing are not easy and not cheap either, the prolonged impact of the pandemic and all related consequences like higher logistics cost are leading companies to review their sourcing and manufacturing footprint,” Niki Frank, CEO South Asia and CEO India, DHL Global Forwarding, wrote in a post on his LinkedIn profile the other day.

According to Frank, “The key point seems to be more diversification to mitigate potential risks in the future and to reduce dependency on one supplier, one country or also one region. India for sure will be one of the countries that is ready to step up and expand its production.”

Coincidentally, the next day, India-based PDS Multinational Fashions Limited (PDSMFL) announced that it has entered into a partnership with German fashion giant s.Oliver Group, wherein Techno Design GmbH, a subsidiary company of PDSMFL will source for the s.Oliver Group.

As per the deal, PDSMFL’s subsidiary company Techno Design GmbH will acquire s.Oliver Group’s sourcing operations in India and shall exclusively source apparel and accessories in India and Sri Lanka for the s.Oliver Group.

“s.Oliver choosing a partner to source exclusively from India reflects their commitment to source from India and Sri Lanka. It is also an indication that more global companies are diverting their sourcing needs to South Asia, and primarily to India and Sri Lanka,” within hours after the announcement was made public.

But India and Sri Lanka are not the only countries from where sourcing is likely to increase as companies divert a portion of their sourcing away from their traditional suppliers in China and Vietnam. Turkey, for example, saw its apparel exports growing by 23.39 per cent year-on-year in the first ten months of this year.

At a recent conference in Istanbul, Livio Manzini, head of the Italian Chamber of Commerce and Industry, said that Italian businesses are also looking for supply chains other than China and there are not many better alternatives than Turkey. Turkey’s investments in Italy are steadily increasing as Turkish firms view Italy as a gateway to the European Union (EU), Manzini told the conference. He expressed optimism that Turkey-Italy trade will exceed $20 billion this year and the two nations will increase that to above $30 billion within five years.

Fibre2Fashion News Desk (RKS)