By Ivory King
Written on 4/12/18
Though the apparel industry seems at times to live in its own separate world, global events have impacted the countries that make and export the majority of clothing. Fashion has its own concerns related to season, color, and cut, but the actual people and businesses are influenced by more mundane events. When it comes to the top performers in the apparel trade, this can come in the form of the whims of our own president, or new enforcements in labor standards.
China is, of course, the largest market and producer of apparel, as well as the largest textile and apparel exporter - they exported $161 billion in clothing in 2016, and more than one-third of clothing imported by the US was made in China. The clothing and textiles industry is much more mature than some of the developing countries that are top of the apparel manufacturing lists, as it has been one the main economic exports in China for decades. Growth has slowed, and market share has dipped slightly, since costs and labor have become a little more expensive in the country as compared to Bangladesh and others. China has pivoted slightly to address this by investing in equipment and skilled labor in order to produce garments with “special fabrics and advanced techniques that allow for breathability, movement, water-resistance, and comfort.”
Even more recently, President Trump’s plans to impose tariffs on Chinese imports has spurred developments affecting China’s apparel and footwear. Meant to punitively target China’s reported illegal technology transfers and appropriation of intellectual property, the tariffs don’t cover clothing directly. But they would include manufacturing machinery like “textile printing and rolling machines, weaving machines, circular knitting machines, embroidery machines, and others as well as parts for the machinery,” according to outdoors news site Snews. Since the Ministry of Commerce in China has responded with a proposal for American tariffs, there is a possibility of a future trade war that would have significant impact on both countries’ textile and apparel import/export practices. That impact would most likely mean that the US would import from other countries further down on this list.
#2: The European Union
Much of the European Union’s $119 billion in clothing exports are from Italy, France, the UK, Germany and Spain, and are based on added value products. Some sectors have focused more on high-tech, engineered products or traditionally produced quality and design items. Related to the former, technical and industrial textiles for medical and automotive have proven to be a sustainable way for European countries to keep their textile industries profitable.
As for the latter, European companies adapted to the post-economic crisis market by concentrating on high-end products, niche markets and new business models. These sectors export over 60 percent of production outside of Europe and make up 10 percent of EU exports. Italy is home to some of the most famous luxury brands in the world, and many of the other European fashion companies are “micro-enterprises” - companies of 10 employees or less. This boutique industry is unique among all the top global apparel performers.
#3 and #4: Bangladesh and Vietnam
Developing countries are the newest players in the clothing industry, and have come to prominence because of their low costs and cheap labor. Those attributes became even more critical as the feverish competition spread of fast fashion shaped the industry. The shorter seasons of fast fashion necessitate minimal design-to-store turnaround times, and gave rise to the practice of manufacturing for price - at any cost. Bangladesh and Vietnam have been top contenders in this arena - the former exports $28 billion per year and the latter $25 billion in apparel.
But Bangladesh is still recovering from the factory disasters that left thousands of garment workers dead in huge multi-brand housing buildings - they have many hurdles to clear to prove that working conditions have improved, and they are ill-equipped to both respond to safety measures and expand manufacturing capacities to catch the market share that China has lost. Five years later, a new 2018 Transition Accord has been signed in order to commit companies to long-term sourcing relationships in Bangladesh with assurance that the factories are being monitored and are addressing safety hazards.
Vietnam has more room to grow in the industry - the combined textile and apparel projection is set to reach $50 billion by 2020. While low wages are a major reason that production costs remain so low, the local industry challenges are rising prices of electricity and transportation. Since Vietnam owns so few of its own labels, much of their production is for foreign brands. This means the industry, however large, is less predictable - those foreign brands can take business to a cheaper country whenever they wish. So, along with vertical integration like using local fabrics, there’s a lot of pressure to invest in higher quality and higher value products - just as China and the EU have done.
Though clothing exports are about $18 billion per year, when it comes to cotton, India outperforms many of the larger exporters. As of last year, India is the largest cotton producing country with 5.88 million metric tons, mainly due to China’s production dwindled 8 percent from 2016. Their increased and growing capacities for growing their own fiber, weaving and manufacturing have led to an organized growth of the industry, as well as the rise of a robust domestic market for their own products. Local government initiatives are encouraging investment, like the Ministry of Textiles and others, incentivising new brands, skill development and growth into “non-traditional markets like South America, Russia and select countries in West Asia.”
Though many of the factors that textile and apparel sectors are reacting to are elements totally out of control - other countries’ politics and buying patterns - it’s clear that local initiatives have been playing a pivotal role. As we see in China and the European Union, technology adoption is also key in creating longer term, sustainable industries. This, along with higher quality production can create more room for higher wages and better work conditions, which we clearly see in those regions, and hopefully will follow for Bangladesh, Vietnam, and ideally the rest of the world. It is this type of industry maturation that leads to cleaner and safer environments for workers and the population at large.