The Global Fashion Industry Affects Society

Esquel, one of the leading cotton-shirt-manufacturers in the world came from China and it supplies lots of clothing brand such as Banana Republic, Tommy Hilfiger, Hugo Boss, Brooks Brothers, Abercrombie and Fitch, Nike, Nordstrom and Lands’ End, in addition to private companies (Plunkett Research, Ltd.). However, due to the high demand of the US apparel stores for Chinese products, the low cost, which was the main reason why raw materials are being purchased from China, have increased. China’s competition is huge, with Vietnam, the Philippines, Malaysia and Sri Lanka also producing material at cheap prices (Plunkett Research, Ltd.). The US apparel stores can instead purchase from these other Asian countries. It is hard to determine the exact number of suppliers in this industry; but, in general, majority of them are in Asian countries that can provide low-cost raw materials to US-based apparel stores. Therefore, the US apparel stores may acquire higher net profi

Although the Chinese apparel manufacturers would lose profitability due to rising cotton prices and competition from emerging countries, they stand to gain the most from the removal of U.S. quotas and tariffs. According to the author, in 2007, 95% of the 20 billion garments Americans made were purchased overseas. Due to U.S. trade barriers, China’s share of the U.S. apparel import was only 30%. Once these barriers were removed, Chinese apparel would flood the American market due to their low cost and dominance in garment manufacturing. Experts predict that China could eventually supply 85% of U.S. apparel. As they increase their market share in the

The global apparel, accessories, and luxury goods industry had reached a value of $1.8 trillion in 2011 and continued to grow at a rate of 3% annually since then [14]. In 2015, the top five importing countries were United States of America (24.1%), Germany (8.5%), United Kingdom (6.6%), Japan (6.6%), and France (5.2%) while the global top five exporting countries were China (37.6%), Bangladesh (6.8%), Vietnam (5.0%), Hong Kong (4.0%), and Turkey (4.0%) [29]. The global apparel export and import markets indicate a flow

Garments are generally consider as discretionary items, suffered by high unemployment and squeezed disposable incomes in Greece and Spain, most of market consumers feeling unaffordable to spend on garment though most of European does. Expenditure peak of €296.2bn is not forecast to exceed the 2007 until 2017. Following the economic downturn and a prolonged recovery, the sectors might need a decade to get fully recovered. (Ormrod, 2016)

As seen in the figure above, China holds the largest percentage share in world exports with an approximation of 37% in 2016. It is then followed by the European Union (EU). The USA, although being one of the most market-dominant countries in the world and the third biggest exporter, shows a decline from 1980-2016 accounting to being under 5% of the world’s share in exports. This further exemplifies how reliant the US became on countries in the Global South to produce their clothing goods. Contrastingly, the value of imports in millions ($US) was dominated by the EU, who had 175 million dollars’ worth of the value in 2016 (see below). The USA had $90 million dollars’ worth due to its clothing conglomerates being based there, and with consumers’ purchasing power, it was of the top importers of clothing. There is also a rise of NICs as exporters and a rapid growth in imports from Asia. This is due to a change in consumption habits, influenced by the idea of ‘fast fashion’. The idea of ‘Here Today, Gone Tomorrow’

There are many large companies that we see every day, many fashion garments that we buy monthly, weekly or daily, and many people cannot seem to deal with how we manage to get clothing from India, China and Bangladesh and into our day to day lives.

Rivalry among existing competitors: The apparel industry is highly competitive with a great number of both local and global competitors. As the market is mature, its growth is small. Accelerated growth and expansion to new markets are not easy goals to achieve. The barrier to get out of the industry is quite low for distributors, but high for producers. Most fashion manufacturers moved their production base to low-cost countries like China as wage and raw materials in developed markets like Western Europe are high. Besides, there is no great discrepancy in terms of quality of products, so customers make their purchase choices based on price and brand recognition.

Fashion industry has been changing for the last few decades (Hirscher, 2017). Intense price competition among the brands lead them to find some option to reduce the production cost, increase production volume and increase the profit. Lower wage in some countries such as Eastern Europe and Far East Countries causing manufacturer choose to do offshoring due to cut the production cost, and sustainability for the company (Biraldi et al. 2017). However, companies start to consider the risk of offshoring based on their strategic factor and supply chain, not just the cost analysis (Moradlou and Backhouse, 2014) (Tate et al., 2014). Furthermore, it has been proved that offshoring has issues in environmental, work ethic and social which induce the transparency to the consumer for some brands in western countries (Gulmann and Meiker).

Brazil ranks as the fourth largest exporter in the world excluding export of cotton fibre and the second largest employer in the country. The Brazilian textile and fashion industry has 30,000 companies and it is worth up to $63bn. This industry produces 9.5 million garments every year. There is a higher demand for Brazilian designers such as Oskelin, Carlos Miele, and Alexander Herchcovich within the growing middle class society. Brazilian Fashion Designers Association (ABEST) was started less than 10 years and now they have 54 members exporting textile to 48 countries. However, Brazilian Textile and Garment Association (ABIT) imports 60% of the garments worth up to $1.450bn from China and it is a 500% increase since 2006. The board of ABIT has raise awareness about the Brazilian textile industry at a governmental level and offer assistance to become more competitive. The problem is the production cost levels and the cost of labour in Brazil is higher. In addition, the international trade rules and procedures of Brazil are more complex and the international trade is not supported by any international agreements. As a result, the domestic market of Brazilian textile industry only produces for local retailers and customers. Brazil is an interesting case among the developing huge producers of textile around the world with its solid local business sector (Pasquinelli, 2012).

Based on the market reports of June 2010, Mexico accounted of 24.6 percent of U.S. exports of textiles and apparel. This is primarily because Mexico provides significant market opportunities for producers in the United States to meet the increasingly growing needs and wants of Mexican consumers (Forsythe et. al, 1993). The Mexican apparel industry has developed to become the largest importer of apparel

In today’s fashion trend is more affecting with new technology after the 20th century. The one of the well-populated growth country of China is involved with virtually all activities in the textile and clothing industry value chain. After the 20th century, the China exports textile products vacillating from raw materials, fiber (natural and man-made) and fabrics to ready to wear, as well as

The value of EU clothing and textile exports to countries outside the EU has risen 13.3% from 2010 to 2011 which hints that global trade is increasing and expanding during this time frame. Sales of textiles increased 8.3% and clothing 19.4%. However, although in terms of value trade appeared to rise, in terms of volume exports decreased 0.3% and production within the EU declined throughout the year. EU imports also showed similar figures as imports from non-EU countries were up 9.8% in value but only 0.5% in volume. This reflected a 13.7% increase in average export prices.

In the last three decades, clothing manufacture has migrated substantially from the developed to the less well developed economies. The major clothing producing nations in 2005 were China, India, Indonesia, Bangladesh, and Pakistan (Audet 2007). The growth in Chinese as well as Indian clothing production has been substantial in the last two decades. In 2002, over 70% of the Japanese and over 77% of the Australian apparel markets originated from China (Nordas 2004). Chinese manufactured clothing entering the US and the EU apparel markets grew by 43%

Almost half of the Italian imports of clothing from Eastern Europe come from Romania and more than one fifth from Hungary, the rest being spread among the Czech and Slovak Republics, Bulgaria and Poland, in the order. Together with an increasing deficit for Italy, the share of clothing in total Italian imports from each CEEC has been increasing recently in all cases, and particularly so from Romania and Bulgaria, where it now stands at 41% and 27%, respectively, and from Hungary (12%).

According to Technopak Advisors, India is one of the largest textile producers in the world and is still growing. They are second only to their neighbors, China, and India is predicted to have a US$ 223 billion industry by the year 2021. In 2010 the Ministry of Textiles in India openly shared that textiles were responsible for 11.04% of India’s total exports. This year, according to ibef.org, textile exports were estimated to be around US$ 28.53 billion from April 2013 to January 2014. It is clear to see that India is a major player in the world concerning textile exports and manufacturing and according to Dr. A Sakthivel, Chairmen of the Apparel Export Promotion Council (A Brief Report Textile Industry in India, 2012), India will continue to advance and reach roughly US $60 billion over the next three years.