Textiles
Intelligence
The EU clothing market in 2008:
Opportunities for Colombian
manufacturers
Sam Anson
Economist and editor
Textiles Intelligence
April 21-22, 2008
Contents
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About Textiles Intelligence and the IAF – 5 mins
Map of the EU and list of member states – 5 mins
Key EU imports of clothing –buyers’ preferences, import
trends, markets for lingerie and swimwear – 35 mins
Key competitive factors when supplying the EU market:
demand driven factors – 30 mins
Coffee break – 15 mins
Key competitive factors when supplying the EU market:
supply driven factors – 15 mins
Case study: H&M – 5 mins
Emerging sectors: Performance fabrics and apparel and
home textiles – 10 mins
Textiles
Recommendations – 10 mins
Intelligence
Q&A – 20 mins
About Textiles Intelligence
• International provider of independently
researched reports on the international fibre,
textile and clothing markets
• Formed as a spin off from the Economist
Intelligence Unit (EIU), part of the Economist
Group
• Publishes four subscription-based publications
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–
–
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Textile Outlook International
Global Apparel Markets
Technical Textiles Markets
Performance Apparel Markets
Textiles
Intelligence
Subscription reports
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International
Technical Textile
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Apparel Markets
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Textiles
Intelligence
The International Apparel Federation and Global
Apparel Markets
• The IAF is a worldwide knowledge network that collects and
disseminates information, statistical, benchmarking and otherwise,
on developments in apparel design, manufacturing, distribution,
sourcing, trade and technology.
• politically neutral global association
• open to entrepreneurs and executives from the apparel chain
worldwide.
• Members include national clothing associations and companies
whose core business is sourcing, designing, development,
manufacturing, distribution, and retailing of apparel products.
• Associate members include educational institutions and companies
that supply textiles, accessories, equipment, technology, and
services to the apparel industry.
Textiles
Intelligence
The International Apparel Federation and Global
Apparel Markets
• The mission of the IAF is to develop business contacts which foster
dialogue, and knowledge exchange between individuals active in
the world apparel value chain:
• for the betterment of business practices
• for the promotion of the international image of the apparel
business
• for the advancement of technology and the promotion of its' use
• for the encouragement of innovation and new ways of thinking
• for the growth of apparel trade worldwide
• for the improvement of social, health and safety, and environmental
conditions relating to the apparel chain worldwide, and
• for the advancement of apparel related education and training.
Textiles
• Annual conference. 2008 conference is in Mastricht, Netherlands
Intelligence
The International Apparel Federation
Textiles
Intelligence
The International Apparel
Federation
•
If you have any questions regarding the IAF,
please contact
Mrs. Nadia van Staden
PR & Communications
P.O.Box 428, 3700 AK ZEIST, The Netherlands
E_ vanstaden@iafnet.com
T_ +31 30 - 232 09 08
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Textiles
Intelligence
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Intelligence
Map of the EU
EU member states
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
Latvia
Lithuania
Luxemberg
Malta
Netherlands
Poland
Portugal
Romania
Solvakia
Slovenia
Spain
Sweden
United Kingdom
The EU market in 2006
• EU clothing imports were worth US$141 bn, or 45%
of world trade in 2006
• Almost half of the EU’s clothing come from inside the
EU
• More than 200 countries supplied the EU in 2006
• Countries in N and S America produced just 1.3% of
the EU’s clothing in 2006
• Many EU firms are outsourcing manufacturing
operations to lower cost locations abroad
Textiles
Intelligence
Preferences for large retailers
• 20-50 large retailers dominate
• They prefer producers who are:
– flexible;
– quick to respond;
– reliable (communications, production, delivery);
– strength in design skills;
– quality production;
– able to demonstrate strong influence over 3rd party suppliers;
– open minded;
– and can show evidence of willingness to collaborate with
competitors if required
– can show evidence of social responsibility;
– ecologically aware;
Brief history of EU trade:
2000-07
Textiles
Intelligence
Brief history of trade: Timeline
• Ten new members joined the EU in May 2004
• EU quotas eliminated on December 31, 2004
• Temporary “safeguard” quotas on certain clothing
imports from China imposed on January 1, 2006
• Two more new members joined the EU on
January 1, 2007
• Temporary quotas on imports from China
removed on December 31, 2007
Textiles
Intelligence
EU25 before quota elimination
Textiles
Intelligence
EU: growth rates, imports from leading suppliers,
by volume, 1990-2004
EU apparel imports
% per annum,
30
25
22.6
20
16.9
15
15.1
10
10.4
9.4
Turkey
India
5
0
Bangladesh
Romania
China
Source: Euratex
Growth shared evenly between suppliers
Textiles
Intelligence
EU25 imports in 2005 (after
quota elimination)
Textiles
Intelligence
EU: growth rates, imports from leading suppliers,
by volume, 2005
% per annum,
60
44.7
40
18.9
20
0.8
0
-0.7
-12.4
-20
China
India
Turkey
Bangladesh
Romania
Source: Euratex
China and India gain market share
Textiles
Intelligence
How did China cope with safeguard
quotas introduced in EU in 2006?
Textiles
Intelligence
Let’s look at the six clothing
categories covered by China
safeguard quotas
Textiles
Intelligence
Impact of safeguard quotas on Chinese exports to the EU, 2006/05
% change
40
Big VOLUME drops from China
in every category subject to
safeguards!
20
0
-20
-40
-30.2
-31.4
-41.0
-47.7
-48.2
-50.8
Trousers
T-shirts
Pullovers
-60
Blouses
Brassieres
Dresses
Volume
Source: Textile Outlook International based on Euratex data
Textiles
Intelligence
Impact of safeguard quotas on Chinese exports to the EU, 2006/05
% change
150
135.6
Big price rises
from China!
100
84.9
68.1
64.0
56.0
43.9
50
0
-50
Blouses
Brassieres
Dresses
Trousers
T-shirts
Pullovers
Price
Source: Textile Outlook International based on Euratex data
Textiles
Intelligence
How did Vietnam, a competing
country, respond to China’s
quotas?
Textiles
Intelligence
EU imports from Vietnam in six clothing categories
subject to China quotas
% change
600
400
561.3
Increases in
volume
250.8
257.7
Blouses
Brassieres
360.2
336.3
239.2
200
0
Dresses
Trousers
T-shirts
Pullovers
Volume
Source: Textile Outlook International based on Euratex data
Textiles
Big VOLUME rises from Vietnam in every category
Intelligence
subject to China safeguards!
EU imports from Vietnam in six clothing categories
subject to China quotas
% change
40
20
0
-20
-40
-60
-53.0
-67.6
-80
-44.2
-51.9
-60.9
-72.8
-100
Blouses
Brassieres
Dresses
Trousers
T-shirts
Pullovers
Price
Source: Textile Outlook International based on Euratex data
Steep price falls from Vietnam
Textiles
Intelligence
Nearby suppliers
Textiles
Intelligence
Key movers: 2005-2007
• Egypt: +8% value, +10% volume
• Macedonia: +17% value, +20% volume
• Serbia: +38% value, +43% volume
Price increases from
• Turkey: +3% value, no change in volume
• Morocco: +4% value, -1% volume
• Madegascar: +11% value, +6% volume
• Albania: +14% value, +4% volume
• Moldova: +16% value, +10% volume
• Intra EU: +2% value, -11% volume*
• Switzerland: +5% value, +1% volume*
Textiles
Intelligence
High volume Asian suppliers
Textiles
Intelligence
Key movers: 2005-2007
•
•
•
•
•
•
•
•
•
Vietnam: +17% value, +42% volume
Cambodia: +3% value, +5% volume
Malaysia: -3% value, +3% volume
Taiwan: -3% value, +1% volume
China: +9% value, +6% volume
Bangladesh: +7% value, +6% volume
Sri Lanka: +9% value, +8% volume
India: +6% value, +4% volume
Pakistan: +5% value, +4% volume
Textiles
Intelligence
Asian suppliers which are cutting
prices in order to compete
Textiles
Intelligence
Key movers: 2005-2007
Less successful Asian suppliers have cut prices in an
attempt to remain competitive:
• Indonesia: 0% value, -2% volume
• Thailand: 0% value, -3% volume
• Macau: -5% value, -8% volume
• South Korea: -7% value, -9% volume
• Myanmar: -6% value, -9% volume
Textiles
Intelligence
Key suppliers to the EU market in
2007
Textiles
Intelligence
Top 10 EU suppliers: 2007
1. Intra EU: 46% of value, 23% of volume
2. China: 20% of value, 34% of volume
3. Turkey: 8% of value, 8% of volume
4. Bangladesh: 4% of value, 9% of volume
5. India: 4% of value, 4% of volume
6. Tunisia: 2% of value, 2% of volume
7. Morocco: 2% of value, 2% of volume
8. Hong Kong: 2% of value, 2% of volume
9. Indonesia: 1% of value, 1% of volume
10. Vietnam: 1% of value, 1% of volume
Source: Textile Outlook International and Euratex
Textiles
Intelligence
Key suppliers of T-shirts and
cotton trousers in 2006
Textiles
Intelligence
Top 10 T-shirt suppliers
1. Turkey
2. Bangladesh
3. China
4. India
5. Mauritius
6. Morocco
7. Hong Kong
8. Tunisia
9. Thailand
10. Romania (now EU)
27%
17%
12%
10%
3%
3%
3%
2%
2%
2%
Textiles
Intelligence
Top 10 suppliers of cotton trousers
1. Turkey
2. China
3. Bangladesh
4. Tunisia
5. Romania (now EU)
6. Hong Kong
7. Morocco
8. Pakistan
9. India
10. Indonesia
15%
15%
12%
9%
9%
7%
7%
4%
3%
2%
Textiles
Intelligence
For more information:
For more information on international trade in textiles and
clothing, please see:
• “Trends in EU imports of textiles and clothing”, once a year in
Textile Outlook International,
• “Trends in US imports of textiles and clothing” - once a year in
Textile Outlook International,
• “World trade in textiles and clothing” - once a year in Textile
Outlook International,
• “World textile and apparel trade and production trends” –
twice a year in Textile Outlook International.
• “Clothing Trade and Trade Policy” – four times a Textiles
Year in Global Apparel Markets
Intelligence
EU lingerie market
Textiles
Intelligence
European markets for lingerie
Low end basic products
Source: Marks & Spencer
Key facts
• Worth US$11.3 bn in 2005 (56% bras, 29% briefs)
• Germany is the largest market, followed by Italy, the
UK, France, and Spain.
• Consumption of items of lingerie per woman rose by
12-13% during 1994-2005
• Average price of bras was US$17.58 per item in 2005.
• Italy has highest average prices, followed by Spain,
France, Germany and the UK.
Textiles
Intelligence
Key facts
• Flurry of merger and acquisition activity, culminating with the
divestment by Sara Lee of its European branded intimate
apparel business to Dim Branded Apparel (DBA) in February
2006 and its UK-based Courtaulds private label apparel
business in May 2006.
• Future prospects for brands in the bra business appear
reasonable.
• Briefs market is becoming intensely competitive as sales of
multipacks in supermarkets exert downward price pressure on
suppliers and other retailers.
• Nightwear is an important part of the lingerie market
• Source: Textile Outlook International – European market for
lingerie
EU swimwear market
Textiles
Intelligence
European markets for swimwear
One-piece swimsuit
Two-piece bikini
Key facts
•
•
•
•
Worth US$3.11 bn in 2005.
Forecast to reach US$3.16 bn by 2012.
Innovative and unique designs are very important factors
Italy had the highest sales and highest prices in 2005 and it
was the only country in Europe to experience price increases in
swimwear during the year
• Prices are expected to fall in all countries except Italy,
Germany and Spain.
• Major differences in cultures between countries –the all in one
swimsuit is more popular than the 2-piece bikini.
• Italy is the largest market, followed by Germany, France, the
UK and Spain.
Textiles
Intelligence
Key facts
Main Trends:
• Many different styles and designs including
functional designs to help improve wearer’s
figure - tummy tuck, cover up – as well as
different lines for different body shapes.
• Source: Textile Outlook International –
European market for swimwear
Textiles
Intelligence
Designs by body shape
Small bust
Larger tummy
Larger bottom
Larger bust
Larger thighs
Source: www.miodestino.co.uk
Narrow hips
Key factors when supplying the
EU clothing market
Textiles
Intelligence
Key competitive factors in supplying the EU
market
Market driven factors:
• Knowledge of the market
– EU trade policy: under heavy pressure to constant reform
from many lobbying groups
– Target customers: largest and fastest growing retailers –
keep abreast of their financial performance and sourcing
strategy
– Understanding that the EU market is the fastest changing
market in the world, mainly driven by oversupply from
Asia, extreme fashion trends and increasingly celebrity
activity - “gossip” and “styles”
– Understanding sizing, pricing and seasonality is a very
important asset
Key competitive factors in supplying the EU
market
Market driven factors:
• Current socio-economic trends:
– Eco-friendly production
– Corporate social responsibility
• Emerging high value sectors: Home textiles
and Performance Apparel
Textiles
Intelligence
www.textilesintelligence.com
EU Market: Key political and
commecial lobbying groups
• Key decision-making bodies in EU:
– The European Commission
– The Council of Ministers
– The European Parliament
– The European Committee for Standardisation
• Brussels-based industry associations
– Euratex
– Eurocoton
– IWTO (wool)
Textiles
Intelligence
EU Market: Key political and
commecial lobbying groups
• Key commerce based associations:
– AEDT–The European Association of Fashion
Retailers;
– Eurocommerce
– The Foreign Trade Association (FTA)
• Workers’ representations
– European Trade Union Federation
Textiles
Intelligence
Sizing
Sizing
– Sizing varies from one EU country to another. All are very
different from USA and LatAm.
– EU initiative to standardise sizing but it’s a long way off.
Textiles
Intelligence
Pricing
Pricing
• Prices have fallen for clothing across the board.
• Low and Mid priced clothing is very popular and comes from
Asia. However, weak in flair and creativity for design. Quality is
generally acceptable, however.
• Low and Mid priced clothing is sold mainly by supermarkets
and large high street retailers and basic department stores.
• Much high priced clothing is still produced within the EU but
retailers are looking for new suppliers abroad as there is
pressure on margins due to high cost of labour, rising energy
costs and slow EU economic growth.
• High priced clothing is sold by luxury department stores,
independent boutiques, own brand stores and via the
internet.
Seasonality
EU markets are traditionally very seasonal.
Temperatures and climates vary massively from one country to
another.
Southern med countries – hot dry summers, cool but not cold
winters. Sometimes flash rain and thunder storms throughout
the year.
North European countries are characterised by cold and wet
winters, variable springs, hot summers with unpredictable rain
and pleasant autumns.
High end retailers focus on the 2 traditional collections a year.
Mid and low end retailers are blurring collections with many
having 6 or more collections a year to encourage a new and
fresh attitude to clothing.
Selling via the internet
Textiles
Intelligence
Selling via the internet
• Volume and value of clothing sales via the internet is
growing fast.
• Time-poor cash-rich consumers are shopping from
home for convenience.
• Established retailers also sell online.
• Most established catalogue sales channels are now
done online
• The biggest retailers have exclusive websites while
resellers and agents collaborate.
Textiles
• Some stores offer free delivery.
Intelligence
Selling via the internet
• Internet sales is characterised by:
• High % of returns which can be resold as shoppers
cannot try the clothes on before they buy
• Lower prices due to lower overheads for retail
space, advertising, staff etc
• High levels of cooperation between competitors.
• Very low margins for agents and resellers.
Textiles
Intelligence
Target customers: largest EU retailers
Target customers: selected fast growing
retailers
Textiles
Intelligence
Fast growing retailers: The importance of
supermarkets in EU clothing retailing
• Supermarkets growing share of UK and EU clothing
market
• In UK, Asda and Tesco are in the top 10 largest
clothing retailers
• Supermarkets are using convenience, existing
distribution, large customer base – online delivery
within 24 hours
• Supermarkets are looking to expand range of
clothing to higher value added goods
Textiles
• Reward cards create loyalty
For more information see “Apparel business update”, Global
Apparel Markets every 3 months
Intelligence
Fast growing retailers: The importance of
supermarkets in EU clothing retailing
For more information see “Apparel business update”, Global
Apparel Markets every 3 months
Textiles
Intelligence
Fast growing retailers: The importance of
supermarkets in EU clothing retailing
For more information see “Apparel business update”, Global
Apparel Markets every 3 months
Textiles
Intelligence
Tesco’s home page
For more information see “Apparel business update”, Global
Apparel Markets every 3 months
Asda’s clothing range, George, has its own dedicated
website
For more information see “Apparel business update”, Global
Apparel Markets every 3 months
Understanding the speed of
change of fashion trends
• Good sources of information include:
– Global Apparel Markets (a one-stop shop);
– The International Apparel Federation;
– Just style;
– www.iamfashion.blogspot.com
– Fashion trade press;
– Financial Times;
– Fashion supplements to EU tabloid papers;
Textiles
– Major retailer’s websites.
Intelligence
Spring/Summer collections
2007 vs 2008
2007
2008
www.iamfashion.blogspot.com
Textiles
Intelligence
Spring/Summer collections
2007 vs 2008
2007
2008
www.iamfashion.blogspot.com
Textiles
Intelligence
Spring/Summer collections
2007 vs 2008
2007
2008
www.iamfashion.blogspot.com
Textiles
Intelligence
Major EU fabric fairs
• EU fabric fairs remain important events for high
quality fabrics for suppliers to the EU
• Spinners and fabric manufactures have met Asian
competition with innovative designs, high quality,
fast turnaround times and superior customer service
(see later)
• Demand is growing fastest for eco-friendly products
– organic cotton and natural dyes
• However, in recent times, Chinese trade fairs have
Textiles
become more important for buyers
Intelligence
Major EU fabric fairs
•
•
•
•
Munich Fabric Start, Germany
Tissu Premier, Lille, France
Milano Unica, Milan, Italy
Texworld, for non-European Textile Producers,
Paris, France
• Première Vision Pluriel, Paris, France
For more information see “Fabric and Apparel trends and fairs”
in Textile Outlook International twice a year and in Global
Textiles
Apparel Markets once a year
Intelligence
Socio-economic trends:
Green textiles and clothing
• Green textiles and clothing is becoming an increasingly
important factor in the EU market in terms of production and
consumers
• Eco labels and official certification
– EU Eco label
– Organic Cotton
• Retailers’ initiatives
For more information see “Green textiles and clothing” in Textile Outlook International
and “Organic cotton” in Global Apparel Markets
Textiles
Intelligence
Socio-economic trends:
Corporate social responsibility
• Social responsibility – “giving back to society”:
– Worker incentives
– Schools
– Child care
– Charitable donations
– Facilities for workers (exercise, restaurants)
– Environmental responsibility
– Charity donations
Textiles
– Local civil projects – schools, water supply,
Intelligence
hospitals, orphanages
Home textiles
Source: John Lewis Partnership
Emerging sectors: Home textiles
• Home textiles include:
– Bathroom textiles
– Bedding
– Cushions and cushion covers
– Table linen
– Window dressings (curtains, drapes etc)
• Bedding and window dressings are largest sub sectors
– 72% of UK market and 75% of German market
• EU import market was worth Euro5.3 bn in 2006. UK is by far
largest market in EU.
• Key suppliers were Turkey (15%), Pakistan (12%), China (11%), India
(9%), Portugal (8%), Germany (5%), Belgium (4%), France (3%),
Textiles
Poland (3%), Czech Republic (3%), Italy (2%)
Intelligence
Emerging sectors: Home textiles
• Common fibres include: Cotton, linen, silk, wool, modacrylic,
nylon, acetate, acrylic, polyester, rayon
• Key growth areas:
– Innovative functional fabrics
• temperature regulation, odour management,
antibacterial coatings, phase change materials, easy
care, stain resistance, flame retardancy, fragrance
encapsulation, cosmeo textiles, anti-static
– Eco friendly fibres and fabric,
– Simple designs are popular in EU market
For more information please see report on “Developments in
Home textiles” in Textile Outlook International Sep-Oct 2006
Textiles
Intelligence
Emerging sectors: Performance
apparel
• Performance apparel:
– Waterproof breathable fabrics;
– Temperature regulating fabrics;
– Compression clothing;
– Antimicrobial technology;
– Ultra violet protection;
– Insect repellent;
– Flame retardent;
– Personal protective equipment;
– Anti odour;
– Anti-static technology
Textiles
Intelligence
Compression clothing made from elastane
and polyester in Guatemala
Trends in sourcing strategies: a case
study on H&M
H&M has reacted to:
• Highly competitive market
• Removal of quotas has meant there’s a situation of
over supply
• Fast changing consumer tastes
• Heavy influence by media
• Large retailers with strong brands have the best
knowledge of the market and the majority of control
Textiles
Intelligence
Trends in sourcing strategies: a case
study on H&M
• H&M is one of the world’s largest and fastest
growing clothing retailers
• Pioneer of fast fashion
– Fast fashion refers to the speed at which a retailer
is able to spot a trend on the catwalk and have it
available, at an affordable price in the shops
• Achieves this with efficiency and flexibility
throughout its supply chain
Textiles
Intelligence
Trends in sourcing strategies: a case
study on H&M
• H&M has strong knowledge of fashion and is
adept at anticipating trends
• This makes it popular with consumers, ,
especially women, who want to have the most
up-to-date fashion items
• It has grown at a formidable rate, despite
challenging economic conditions
Textiles
Intelligence
Trends in sourcing strategies: a case
study on H&M
• H&M’s strategy:
– Centralised key functions of design, buying and
logistics;
– Decentralised decision making for all other
aspects;
– Third party manufacturers;
– Regional distribution centres, or “hubs”;
– Celebrity endorsement; and
– Hi-tech communication technology.
Textiles
Intelligence
Trends in sourcing strategies: a case
study on H&M
• H&M aims to produce “fashion and quality at
the best price” through:
– creative designers
– Strict quality control
– Few middlemen
– Buying in large volumes
– Comprehensive market knowledge
– An extensive supplier portfolio
– Efficient distribution
Textiles
Intelligence
Trends in sourcing strategies: a case
study on H&M
• Corporate social and environmental
responsibility
– H&M has established a reputation for social and
environmental awareness
– All suppliers must adhere to the company’s code
of conduct
• Forced and child labour
• Full Audit Programme
• Environmental legislation on handling of chemicals,
waste management and water treatment Textiles
Intelligence
Trends in sourcing strategies: a case
study on H&M
• Outlook:
– Store expansion will be focused on USA, Europe
and Japan – 1,500 stores at end 2007;
– Product diversification – household textiles and
men’s shoes and maybe performance apparel
For more info please see Profile of H&M: pioneer of fast fashion in Textile
Outlook International Jul-Aug 2007
Textiles
Intelligence
Key competitive supply factors
Supply driven factors to enhance competitiveness in a fast
changing and unpredictable market:
• Low labour cost
• Relative value of exporting currency
• Manufacturing efficiency and quality
• Collaboration with local competitors and third parties
• Short lead times vs distance to market
• Flexibility and responsiveness to clients’ needs
• Building of long term relationships with customers
• Competitive investment climate with competing
countries (including trade policy and investment
Textiles
incentives)
Intelligence
Labour costs in competing
countries
Textiles
Intelligence
Hourly labour costs in the textile industry, 2007
Switzerland
Belgium
Germany
Austria
UK
Japan
France
Italy
Ireland
Australia
USA
Spain
Greece
Israel
South Korea
Taiwan
Portugal
Hong Kong
Czech Republic
Poland
Estonia
Latvia
Lithuania
Slovakia
Brazil
Argentina
Turkey
South Africa
Morocco
Mexico
Colombia
Peru
Tunisia
Thailand
Bulgaria
Malaysia
Egypt
China, coastal
India
Indonesia
China, mainland
Vietnam
Pakistan
Bangladesh
33.67
31.65
28.17
25.24
23.42
22.69
21.61
20.05
18.01
17.63
16.92
15.81
13.09
9.89
7.77
7.64
7.15
6.21
4.90
4.62
4.14
4.05
3.70
3.53
3.27
3.10
2.96
2.78
2.62
2.45
2.32
2.02
2.01
1.75
1.55
1.34
1.02
0.85
0.69
0.65
0.55
0.46
0.42
0.28
0
10
20
US$/hour
Source: Textile Outlook International from W erner data
30
40
Relative value of exporting
currency
Textiles
Intelligence
China's declining competitiveness: exchange rates
Jan-Sep 17, 2007
Sri Lanka
Indonesia
Vietnam
Dominion Republic
Mexico
El Salvador
Honduras
Cambodia
Taiwan
South Korea
Bangladesh
USA
Pakistan
-8.5
-7.6
-7.4
-6.7
-6.5
-6.3
China’s currency
has risen against
all these
countries
-6.1
-5.4
-5.2
-4.8
-4.7
-3.8
-3.2
-10
-5
0
5
10
% change in currency versus Rmb
Source: Emerging Textiles
Textiles
China’s weak spot: the value of the renminbi is rising Intelligence
Manufacturing efficiency and
quality
Buyers look for:
• Low operating costs;
• Implementation of total quality management systems;
• Investment in good quality machinery, perhaps on a modular
basis;
• Removal of expensive and unnecessary gadgetry
• Machinery which has been designed for low labour costs
• Worker incentive schemes for efficiency and quality
• Efficient strategy for fabric sourcing and 3rd party services
Textiles
Intelligence
Collaboration with local competitors
and third party suppliers
Buyers are also impressed with:
• Evidence of collaboration with competitors
• Evidence of development of specialist production “hubs” or
“clusters”
• Evidence of influence over third party suppliers (accessories,
finishing, labels etc)
• Efficient capital markets in country
• Efficient logistics and communication methods
• Strong knowledge of foreign markets
Textiles
Intelligence
Other factors
• Short lead times: Speed to market and up-to-date fashion
items allows retailers to keep a competitive edge
• Modern Information Technology methods which is compatible
with buyers encourages EU customers to do business:
–
–
–
–
Product Lifecycle Management (PLM);
Three dimensional design and visualisation software;
Virtual fabric samples and catwalk technology;
Radio Frequency Identification labels;
• Collaboration and relationship building with local logistics
companies and those in EU can help optimise shipping times
Textiles
Intelligence
Flexibility and responsiveness to
customer needs
• EU market is changing very fast
• Retailers want manufacturers who are flexible and quick to
respond
• No sooner has one trend, fashion or “social phase” been
implemented in a product range, a new one is on its way
• Flexibility is key to win business in terms of:
–
–
–
–
Order size – small versus large;
Quick response – turn around a design in days;
Blurring of conventional seasons;
Integration of emerging products at short notice – lifestyle products,
performance coatings, garment decoration
– Incorporation of celebrity “fads” can make a quick buck Textiles
Intelligence
Building long term relationships
with suppliers and customers
• EU customers have knowledge of market and knowledge of
clothing manufacture
• EU customers don’t have knowledge of suppliers and third
parties in less developed countries
• EU customers can keep abreast of changes in trends and have
exceptional ability in design and innovation
• EU customers need help from suppliers in terms of producing
clothing at low cost quickly and with minimum returns
• Out of a portfolio of 130+ suppliers, retailers have a focus on
three or four producers which they have a long term win-win
relationship with
Textiles
For more information, see “Strategies for manufacturers in
Intelligence
The post quota era to 2015” in Textile Outlook International
Recommendations
• Use Colombia’s political and social situation to your advantage
• If capacity is underutilised, consider collaborating with
competitors to streamline operations and improve efficiency
• Create a databook containing key operational performance
statistics in english to put on your website and give to EU
customers (see ACI – Agencia de cooperacion y inversion- for
template)
• “Shout” about your competitive advantages and achievements
through the international textile and clothing press
• Consider establishing a full time press representative to
generate and receive press releases
• Collect impressive statistics about your company’s achievements
and send the information via press releases to the international
community
Textiles
Intelligence
Recommendations
• Read the textile and clothing business-to-business
press every day to learn what’s going on and to
decide your target countries and customers.
• Use internationally-recognised terminology
• Update websites in English
• List company’s strengths (technology, quality, social
responsibility) in an obvious place.
• Update marketing and sales brochures regularly and
make sure the English is well translated
• Many large retailers have strict requirements for
safety, ecology and treatment of employees. EU
Textiles
certification in these aspects can be a business
Intelligence
winning advantage
Thank you
Questions and Answers?
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