APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / Chairman’s Message
Dear Friends,
T
he year 2019 has started on a good note, with exports recording a growth of over 26 per cent (in rupee terms) in the last quarter - raising hopes of a higher growth
trajectory this year. The industry has also got a shot in the arm from some positive policy announcements. I am thankful to Ministry of Finance for including merchant exporters in Interest Equalization Scheme. This decision will benefit over 2,800 apparel merchant exporters who can now avail of lower packing credits. The decision of the GST council in its 32nd GST council meeting to increase the threshold limits for exemption from Registration and Payment of GST from Rs. 20 lakh to Rs 40 lakhs will also help many small job workers in the apparel value chain. Similarly, increasing the Turnover Limit for the existing Composition Scheme upto 1.5. cr will also provide operational ease to many smaller manufacturers. Vietnam is expected to get preferential access in Peru, Mexico & Canada under CPTPP this year. This will increase
production and export enhancement strategies. Since
the competition for Indian garment exporters as India
many of them are high value products with very high
does not have preferential access in these countries yet,
global demands, I see this as an important opportunity
although, India is negotiating with Peru and Canada for
to diversify our export basket. I invite your comments
trade agreement. We request government to fasten the trade
on a product development strategy that can help in
agreements with Peru and Canada and explore the feasibility
developing capacities and a good supplier base for
of India- Mexico trade agreement. The Council is working
some of these products in a time bound manner.
with NITI Ayog and Ministries for optimizing our trade with old partners like Russia and FTA partners like Japan.
Competitiveness strategies are about positioning too. India is uniquely positioned – not only as one of
In order to remain competitive, the Indian garment
the largest suppliers, but also as a responsible sourcing
industry will have to develop capabilities to tackle both
destination. Recognising this fact, AEPC has signed an
larger volume orders and manage rapid turnaround with
MOU with Marks and Spencer’s for promoting Gender
short lead times for diverse fashion garments. Scales
Equality in the apparel sector. Under this programme
and product development are key to growth for an
AEPC will support Marks and Spencer’s in capacity
economy like ours. AEPC is working towards enabling
building of apparel units in respect of workforce
our members to move to new products - specially in
sensitisation, trainings on gender equality, POSH issues,
the technical textile segment. The Ministry of Textiles
awareness on laws pertaining to violence against women
has recently identified 207 HSN codes for technical
and functional Internal Complaints Committees. Our
textiles. This includes 12 apparel products which are
calendar for this year also takes this message forward.
presently being traded under traditional textile products. This identification will help in developing focused
Happy 2019! n HKL Magu, Chairman, AEPC
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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C O n T e n T s
04 | the broadCaSt
India’s Ready-Made Garment (RMG) Export Update for FY (April-December) 2018-19
05 | the broadCaSt
India’s Textile & Ready Made Garment (RMG) Update for Index for Industrial Production (IIP) for FY (April-November) 2018-19
CHAIRMAN AEPC Mr. HKL Magu CHAIRMAN EP Mr. Sudhir Sekhri
06 | aEpC aCtiVitiES
AEPC signs MoU with Marks & Spencers, India for equal workplaces
10 | aEpC EVEntS
Seminar on AEO Program, Trade Facilitation Agreement & Currency Risk Management organised by AEPC
ADVISOR AEPC Mrs. Chandrima Chatterjee PUBLISHER Apparel Export Promotion Council Apparel House, Sector-44, Institutional Area, Gurugram, HARYANA – 122003. Phone: 0124-2708000 www.aepcindia.com
12| marKEtS
Printing Press: VIBA Press Pvt. Ltd. C-66/3, Okhla Industrial Area, Phase-II New Delhi-110020 e-mail: info.vibappl@gmail.com
Millennials to drive Chinese luxury market
28 | ConCErn
Deep-rooted concerns in textile industry needs attention to fast forward growth
30 | brand rEtail
Six new brands enter ‘Top 50 Valuable French Brands 2019’ ranking
33| brand rEtail
• Burberry works on its strategy to boost bottom lines • Uniqlo Japan’s profit to rise in H2 2019 • M&S’ UK to reshape product offerings
34| brand rEtail
• Retail sales grows highest in six years • Luxe brands focus on accessories to attract customers • Gap shuts down weaker stores to increase profitability
13| marKEtS
35| trEndS
Content & Design DFU Publications New Delhi Email: dfudelhi@yahoo.co.in
• Denim jeans market to grow at 8.5% by 2025 • Revenues for global winter wear to grow at 5.8 % CAGR
26 | luXury
• Global spandex market to grow at a CAGR of 8 per cent by 2023 • Robust growth expected for the global lingerie market
14 | CoVEr Story
Innovative trends to drive the fashion industry in 2019
18| tradE trEatiES
Ripples of impending Brexit to be felt across the globe
20| tradE trEatiES
• Vietnam becomes the seventh country to ratify TPP11 • UK explores both TPP and TPA with Japan • India seeks enhanced trade opportunites with Vietnam
21| tradE trEatiES
• Govt focuses on making India’s FTA more efficient • UK plans entry into both TPP and TPA with Japan • US seeks rules of origin for its trade agreement with EU
22| rEGional tradE Regional supply chains to determine future global textile, apparel trade
24 | priCES
Labor, input costs to push up global apparel prices in 2019
• Denim trends in 2019 to be influenced by consumer opinions • Under Armour returns to its roots with sportswear • Demand for yoga wear in US increases by 35.8%
36 | buSinESS
US: Apparel sales hit all time high this holiday season, inventory worries persist
38 | marKEtS
China to emerge the largest fashion market in 2019, beating the US
40| aEpC aCtiVitiES
Textile Ministry launches coffee table book on the industry
42| aEpC EVEntS
AEPC organises seminar on currency risk management and GST update
43 | EVEntS
Global Textile Expo 2019 & IND -TEXPO, 2019 held in Coimbatore
44 | rEtail
Online retailers adopt ‘click to brick’ strategy to augment business
46 | SuStainability
Sustainability Initiatives: Repair not replace gaining ground globally
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48| Sustainability
• Youth driven consortium increases upcycling among new designers and businesses • UK apparel brands plan to minimize waste • UK apparel brands plan to minimize wasteIncreased consumption creates millions of tonne of textile waste
49| Sustainability
• Recent British poll indicates consumers’ lack of trust in fashion brands • Lenzing ramps up recycling for Refibra • Americans seek transparency from clothing brands
50 | rEVIEW
700 international visitors mark their presence at IIGF 2019
52 | eventS
Upcoming The Fairyland for Fashion in Paris to attract 1,800 exhibitors
54 | eventS
• Pitti Bimbo to be held in Italy • Tommy Hilfiger’s next show to be held in Paris • Tommy Hilfiger’s next show to be held in ParisPure Origin London to showcase innovations and materials for AW21/SS22
55 | Compliance
• AAFA’s new guidelines for denim finishing facilities to create better industry • Oeko-Tex updates standards for use of chemicals in textiles and leather
56 | Infrastructure
• India creates a export promotion cell for a MSME enterprises • Retail sector likely to add 39m sq ft space by 2022 • Center for excellence for research and training opens in Tirupur
57 | MINISTRY NOTIFICATIONS 58| GSt Update 59| GSt Update 60 | AEPC EVENT CALENDAR
CALENDAR OF EVENTS 2019
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APPAREL / The BrOaDCasT
India’s Ready-Made Garment (RMG) Export Update for FY (April-December) 2018-19 India’s RMG Exports RMG exports were to the tune of USD 1374.3 million in December 2018 with the growth of 2.77 per cent against the corresponding month of December 2017, which was USD 1337.20 million. In rupee term export for the Month of December 2018 was ` 9720.59 cr. as against ` 8590.47 Cr. in December 2017 with the growth of 13.16 per cent. India’s RMG export to World in the April-December of 2018-19 was to the tune of USD 11350.44 mn. which has decreased by -8.35 per cent compared to the same period of previous financial year. During April-December 2017-18, India’s apparel exports were to the tune of USD 12384.72 mn. india’s rmG Export to World month
fy 2017-18
mom Growth of 2018-19 over 2017-18 (%)
fy 2018-19
in inr Crore in uS$ million in inr Crore in uS$ million
inr
uS$
April
11272.24
1747.44
8859.67
1349.81
-21.40
-22.76
May
10342.55
1605.37
9040.63
1338.57
-12.59
-16.62
June
9979.57
1548.59
9202.63
1357.46
-7.79
-12.34
July
8262.94
1281.95
8757.23
1274.83
5.98
-0.56
August
8552.24
1336.95
8986.67
1292.18
5.08
-3.35
September
10704.85
1661.19
7967.69
1103.32
-25.57
-33.58
October
5401.86
830.02
8327.42
1130.95
54.16
36.26
November
6719.85
1036.01
8112.46
1129.02
20.72
8.98
December
8590.47
1337.20
9720.59
1374.30
13.16
2.77
Total
79826.57
12384.72
78974.99
11350.44
-1.07
-8.35
Source: DGCI&S, Kolkata, 2018
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APPAREL / The BrOaDCasT
India’s Textile & Ready Made Garment (RMG) Update for Index for Industrial Production (IIP) for FY (April-November) 2018-19 indEX of induStrial produCtion manufacture of textiles month
mom Growth rate (in %)
manufacture of wearing apparel
mom Growth rate (in %)
2017-18 2018-19 2018-19/2017-18 2017-18 2018-19 2018-19/2017-18
april
116
114.2
-1.6
155.5
134.6
-13.4
may
116.7
116.1
-0.5
156.8
136.8
-12.8
June
116.4
115.5
-0.8
145.2
151.6
4.4
July
116.4
119.8
2.9
134.2
147.3
9.8
august
116
125.1
7.8
121.4
144.3
18.9
September
115.2
121.4
5.4
118.8
143.6
20.9
october
113.5
120.5
6.2
106.3
136.1
28.0
november
117.7
112.0
-4.8
118.1
144.2
22.1
total
116
118.9
2.5
132
143.1
8.4
Source: CSO, 2019 Summary • Manufacturing of Textiles has shown a decline of -4.8% in November, 2018 and growth of 2.5% for the period of April-November, 2018-19 • Manufacturing of Wearing apparel has shown a growth of 22.1% in November, 2018 and growth of 8.4% for the period of April-November, 2018-19
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AppArel / aepc ACTIVITIES
Signing of the AEPC – Marks & Spencer, India MoU. Mr. HKL Magu (Chairman, AEPC ) and Ms. Nidhi Dua( Country Manager, M&S, India) signed the MoU
AEPC signs MoU with Marks & Spencers, India for equal workplaces
T
he Apparel Export Promotion Council of India and Marks & Spencers, India signed a Memorandum of Understanding on 3 January 2019 to explore avenues for working together on a program on Gender Equality through work place training. Through this collaboration, both the organizations have ground their support for the larger objective of creating just and equal workplaces, and in turn, equal societies and perception. The MoU is valid for three years, to start with. As custodians of the sector that employs the second largest work force in the country and a large women work force, AEPC is
well aware that it shoulders a huge responsibility in national development. Representing over 8000 Apparel exporters of the country who export garments worth 18 billion USD, they are proud providers of over 3 billion USD wages to women workforce alone. AEPC will use its massive outreach network to encourage Apparel export manufacturing units all over India to voluntarily join the program. AEPC will support the design and dissemination of the message. In the words of Chairman AEPC, “We look at this partnership with Marks & Spencer as a great opportunity to support the dissemination of such an initiative and help magnify the outcome to reach an 11.2 million workforce through our member exporters. I promise our unstinting support towards making this a countrywide movement.” To start with, the AEPC Annual Calendar of 2019 has been
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AppArel / aepc ACTIVITIES
Unveiling of AEPC 2019 calendar. Seen here from L to R are Mr. Anand( Change Alliance), Mr. Malhotra ( oASG, AEPC), Mr. HKL Magu ( Chairman, AEPC ), Ms. Nidhi Dua( Country Manager, M&S, India), Mr. Ranjeeb Sarma (Head of Compliance, CSR, Plan A & Administration,M&S India)
designed on this very theme and is a testament to the council’s unstinted commitment to supporting and promoting Gender equality in apparel factories of India. Apart from playing the role of a catalyst along with M&S to facilitate the program, AEPC would also help create awareness about this program (in consultation with M&S and implementing agencies) through outreach mechanisms including emails, hosting web banners on AEPC website, fortnightly e-blasts to its data base, social media campaigns, monthly features in the AEPC eMagazine, dedicated seminars and other events. Under Project POWER (Providing Opportunities to Women with Equal Rights), as it is rightly called, a very well structured program, led by Marks & Spencer, India, will be implemented by Change Alliance and Swasti Health Catalyst. The objective of the project is to have safe and enabling work space, happy workforce, which is aware, assertive, responsible and productive, leading to reduced attrition and absenteeism and benefit to factory as firms join and commitment to better work. This is basically a capacity building program
for apparel manufacturing units, covering workforce sensitization and training on gender equality, stereotypes, roles, behaviour and attitude (women and men both – workers and managers/ supervisors), capacity building of women and men (workers and managers/ supervisors) on sexual harassment at workplace (POSH), awareness on laws pertaining to violence against women (VAW) and gender based violence etc and functional internal complaints committees (ICC) and technology assisted grievance and management reporting systems, etc. It is expected to help the garment industry in India, to address gender issues (working with both men and women) and empower women to have the skills and confidence to take up leadership roles, contributing to a safe and gender equal society. The trainers shall implement the modules as per agreed methodology, implementation plan, eligibility criteria of garment factories and other related matters in consultation with M&S. Says Nidhi Dua, “We are very excited about M&S and AEPC partnering together to work on our Gender Equality program, POWER (Providing Opportunities to Women for Equal Rights). This program has been running successfully for the past two years in our factories and it has benefitted a number of stakeholders
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AppArel / aepc ACTIVITIES
including workers, factories and brands, it has also had a far reaching impact on communities. While we continue to run and scale this program to its next phase, we feel encouraged to share the program modules
and the knowledge gained with the wider industry for implementation and greater good. The support of AEPC and the vision of Chairman HKL Magu will give it the impetus, reach and impact.� Work is already underway on the project and the project will soon be rolled out. n
AEPC 2019 calendar based on the theme of Gender equality
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AppArel / aepc events
(L to R) Mr. HKL Magu, Chairman, AEPC, Mrs. Chandrima Chatterjee, Advisor, AEPC, Shri Rajesh Kothari, Joint Commissioner - Mumbai Customs, Mr. Ravi Kumar, Asst. Commissioner - Mumbai customs, Ms. Rachna Bhusari, VP-SME- NSE, Mr. Vivek Acharya, Sr. Manager – NSE & Mr Ankur Kapoor, AVP - Emkay Global
Seminar on AEO Program, Trade Facilitation Agreement & Currency Risk Management organised by AEPC
A
EPC organised a seminar on AEO Program, Trade Facilitation Agreement & Currency Risk Management, in association with Mumbai Customs & Emkay Global Financial Services on January 24, 2019 in Mumbai. HKL Magu, Chairman, AEPC elucidated on the current scenario in the garment industry. He highlighted that
that results in the last two quarterswas encouraging for garment industries. Although growth has slowed down due to the introduction of the GST, it is now going upwards. In future, India is likely to remain remain the favorite destination of many sourcing countries
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AppArel / aepc events
Ravi Kumar, Asst. Commissioner, AEO cell, Mumbai Customs Department gave a the power point presentation on authorized economic operator. Rajesh Kothari, Joint Commissioner, Mumbai Customs was also present at the seminar. Indian Customs Department signed two mutual recognition agreements with the Customs Administrations’ of South Korea and Hongkong. The department is negotiating future MRAs with United States of America and Taiwan. These MRA proposals have been forwarded to major trade countries in South East Asia like Malaysia, Singapore,
Thailand, Philippines & Indonesia. Additionally, few major regional economic blocks like East African Community have proposed MRA with India. These proposals are being earnestly studied and actively pursued. Exporters were also informed about the currency risk managementtools like hedging foreign exchange risk and were explainedabout the advantage of having hedging and how they can prepare a strategy to dodge that risk related to currency fluctuations. n
Participants at AEPC seminar in Mumbai
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AppArel / marketS
Denim jeans market to grow at 8.5% by 2025
T
is
to offer denim jeans products for athleisure and active wear
anticipated to grow at a healthy 8.5 per
he
global
denim
jeans
market
besides work wear and casual wear. Manufacturers are trying
cent from 2018 to 2025. The major driving
to adopt product differentiation to gain a competitive edge.
factors of this growth include rising disposable
The growth of the global denim jeans market is mainly bound
individual incomes, surging e-commerce
to various macro-economic and micro-economic factors. The
industry
for
major restraining factors of the global denim jeans market are
denim jeans. Manufacturers are adopting
changes in consumer lifestyles and the introduction of yoga
fiber technologies that have enabled them
pants and other active wear. n
and
increasing
preference
Revenues for global winter wear to grow at 5.8 % CAGR
R
evenues of the global winter wear market are expected to increase at a CAGR of 5.8 per cent during 2018
to 2027. Favorable trade policies, growing apparel production globally, rise in per capita income, favorable demographics, and shifting consumer preference to branded products will boost the demand for winter wear during the forecast period. Other key factors driving the growth of the winter wear market are population density, downstream industry effectiveness, and changing economic policies as well as business legislation. Abundant availability
of raw materials such as wool, silk, cotton, and others
customers. Manufacturers have also adopted various key differentiation
is another driver of the winter wear market.
strategies to have a competitive edge.
Companies across the globe are focusing on
Factors such as increasing population, rise in adoption of e-commerce
the launch of new products with latest fashion and
have led to a surge in the growth of the B2C. Consumers are seeking products
high quality along with expanding market presence
online. Growth of the global online sales channel along with a widening winter
through establishing new manufacturing facilities
wear product portfolio through new product launches is projected to further
as well as sales channels to reach potential
accelerate the growth of the global winter wear market. n
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AppArel / marketS
Global spandex market to grow at a CAGR of 8 per cent by 2023
T
he global spandex market is estimated to grow at a CAGR of more than 8 per cent from 2016 to 2023. The spandex
market is expected to grow with the recovery in the US economy post recession. Technology advancement with moisture management properties coupled with performance efficiency is likely to benefit this growth. Factors such as superior elasticity, regaining original shape, durability, lightweight, resistance to UV light are likely to favor spandex market demand. Increase in automobile production, particularly in the Asia Pacific, is also likely to drive this growth. n
Robust growth expected for the global lingerie market
R
ecent industry research has indicated
People and Stella McCartney, are making intimate wear
that the global lingerie market, fuelled
and changing the space that was previously dominated by
by the rise in the ‘HER Economy’ will
industry leaders like Victoria’s Secret.
reach $59.15 billion by 2024. The sector, in
The expansion of the intimate market is set to continue
2018, saw an ushered in era of functionality,
due to rising consumer demand across various sectors,
form and sustainable credentials. Brands
ranging from maternity to multifunctional intimates. With
now seek products that are functional,
this diversification, there is likely to be rapid technological
eco-friendly
Many
advancement in intimate wear production, with growing
fashion brands are also diversifying into
new technologies that support multiple functions in intimate
the intimate wear space. Labels like Free
wear catering to consumer needs. n
and
comfortable.
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AppArel / COVER STORY
Innovative trends to drive the fashion industry in 2019
A
recent report on State of Fashion 2019 by Mckinsey/ BOF predicts a lower growth rate of 3.5 per cent for 2019 over 4.5 per cent in 2018. However, this growth rate is likely to differ by geography and segment. The trends that will drive the fashion industry in 2019 are
Novelty through new products, business solutions A British survey revaled, an average person buys 60 per cent more clothes compared to 15 years ago. They are also retained for only half as long time. To maintain their novelty, brands need to respond quickly to changing trends, launch the right products and innovate their business models.
Technology, social media enable instant gratification According to a 2017 study, about half the respondents were influenced by bloggers, influencers compared to just 20 per cent placing faith on in-store assistants. To minimise the time between the want moment to have moment, players need to use technology solutions. Also, offline retailers need to promote products in-store with social/influencer credibility with real-time intelligence.
Big data solutions guarantee maximum returns With a potential slowdown in global economy by 2020, players will need to work on key areas to get maximum returns on invested capital. This can be achieved by using technology/ big-data to drive decisions along with human intuition.
Improving market relevancy through start-ups As per Mckinsey millennial survey, up-and-coming brands show high saliency and engagement in social media. Incumbents
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AppArel / COVER STORY
fashion brands to deliver customised services and to examine consumer’s preferences. More important, Artificial Intelligence has the capacity to play a complementary role in fashion design. With the help of AI, fashion designers can not only predict upcoming trends, dictated by current fast-changing environment of fashion, but also examine and minimise the environmental impacts in their production process.
Increase in sustainable need to build a way to stay relevant by learning how to think small, working with start-ups, building innovation bandwidth internally or through an incubator.
Exploring demand model through data analytics, automation Innovations in the data analytics and automation will enable players to explore “on demand� model of fulfilling demand. However, with the help of social media, consumers are establishing trends as opposed to brands and retailers. To retain their brand identity players need to induct data based demand sensing tools in the development process and nearshore products.
Artificial intelligence to deliver customised services Artificial intelligence (AI) aids brands to mine a big pool of data on any specific subject. This information can help
fashion projects More efforts and deep expertise will be devoted to developing projects that save animals from suffering for the sake of fashion all over the globe.Stella McCartney, a well-known vegan designer, has already implemented many innovative ideas and presented garments made in a laboratory. The material of the garment was similar to silk but made from natural materials.
3D printing in fashion 3D printing enables professionals to transcend any boundaries of design, as it gives
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AppArel / COVER STORY
them a chance to turn the most improbable projects into reality.3-D textile projects, implemented despite their overall complexity, combine different materials into one piece of cloth, for instance, waterproof textile with a flexible one, and so on. Another important trend, customisation helps in achieving fittings depending on individual parameters, such as size, height, etc. Surely adoption of tech in fashion brings more value than is visible.
Emerging methods of products’ access Today’s consumers seek innovative, sustainable and affordable products. To achieve many brands are resorting to resale and rental consumers are shifting away from traditional ownership to newer ways to access product.
Increasing transparency in brand operations Ongoing data breaches at apparel companies have fueled a rising distrust that brands and retailers will need to counter. They’ll need to ramp up transparency, in many cases, as McKinsey explained, by specifying
costs of materials, labor, transport, duties, and mark-up—a level of ‘radical’ transparency that has helped fuel success for companies like Everlane.
Self disruption emerges a major norm Technology and social media are enabling a new breed of ‘challenger’ brands that disrupt a sector or category where incumbent players have rested on their laurels. To compete and stay relevant among demanding young consumers, traditional brands are disrupting their own brands, offerings, and business models.
Brands to provide value added services E-commerce players will continue to innovate by adding profitable value-added services either through acquisitions, investments or internal R&D. They will strengthen their lead over those remaining pure players who rely solely on retail margins and existing offerings.
Delivering on-demand In 2019, more companies will step out to deliver on ondemand as many a startup in the space has already done. This will result in increase in just-in-time production, reduce levels of overstock and increase importance of small-batch production cycle.
Made-to-measure clothing, the future of fashion To cater to individual needs new made-to-measure business model will be the trend in future. Fashion brands
Social media has become a tool for showcasing lifestyles, express fashion tastes and promote selfconstructed images. The emergent of such digital mediums, in hand with the aid of Artificial intelligence (AI), has created a field of global data mining pools, from where marketers can investigate any imaginable subject, on any possible consumer segments. 16 / APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | February 2019 Apparel_February_2019_Gaurav.indd 16
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AppArel / COVER STORY
are tailoring each garment to customer’s size, body type and — in some cases — style preference. Businesses, such as Zozo and Red Thread, are using mobile technology to acquire a 3-D body scan for an accurately-sized garment, while others like Olivia Rose The Label -make their pieces, taking individual measurements and aesthetics into account.
Digital printing emerges as the future of commercial printing Conventional textile printing is giving way to digital printing inorder to accommodate short runs, fast turnarounds, or new products. The market is supported by a complex and well-established textile supply chain, of which printers are only a very small component. Commercial printers therefore, need to focus on more accessible textile segments similar to applications they already produce, such as textile-based sign and display graphics and direct-to-garment (DTG).
Textile signage market to grow Keypoint Intelligence – InfoTrends’ wide-format consulting service reports the market for soft signage is expected to see a compound annual growth rate (CAGR) of 6 per cent between 2017 and 2022, reaching 91.3 million square meters of output by the end of the forecast period.
Higher profit margins for soft signage applications Soft signage applications have higher profit margins in relation to most other commercial printing applications. Based on 2017 estimated street price of $60.2/m from InfoTrends’ Wide Format Application Forecast, PSPs can expect a profit margin in the range of 40 per cent to 60 per cent. These margins are difficult to find in commercial applications.
DTG printing to experience strong CAGR According to InfoTrends, the DTG market will experience a strong CAGR of 13 per cent between 2016 and 2021, reaching a global value of nearly $10 billion. This segment is also witnessing new developments. The use of synthetic fibers (eg, polyester) is growing leading suppliers to seek ways to print directly into these materials. The market recently introduced a new pigment-based technology that enables the printing of white ink, followed by CMYK. n
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AppArel / trade treaties
Ripples of impending Brexit to be felt across the globe
F
or the last two and a half years, Brexit has consumed the entire United Kingdom. The UK’s negotiations with the EU have dragged on, and the consensus is that the economic fallout will be felt far more acutely in Britain than in the EU, and elsewhere. Still, the rest of the world is facing profound challenges of its own. Political and economic systems are undergoing farreaching structural changes, many of them driven by technology, trade, climate change, high inequality, and mounting political anger. In addressing these issues, policymakers around the world would do well to heed the lessons of the UK’s Brexit experience.
UK to feel the pressure When Britian decided to leave the EU, experts predicted that the UK economy would suffer an immediate and significant fall in output following the 2016 referendum. However, Brexit was different. There was no immediate break in British-EU trade. In the absence of clarity on what type of Brexit would ultimately materialise, the economic relationship simply continued “as is,” and an immediate disruption was averted.
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AppArel / TRADE TREATIES
Tax and regulatory arbitrage are likely to become increasingly common as well. And economic policymaking will become a tool for addressing national security concerns (real or imagined). How this approach will affect existing geopolitical and military arrangements remains to be seen.
Uncertainty about economic growth The question therefore, is not whether the UK will face a considerable economic reckoning, but when. The UK economy is already experiencing slow-moving structural change. Foreign investment is falling contributing to the economy’s disappointing level of investment overall. Moreover, this trend is accentuating the challenges associated with weak productivity growth. Companies with UK-based operations have also begun to trigger their Brexit contingency plans after a prolonged period of waiting, planning, and more waiting. In addition to shifting investments out of the UK, firms will also start to relocate jobs. And this process is likely to accelerate even if British Prime Minister Theresa May manages to get her proposed exit deal through Parliament. The Brexit process thus provides a preview of what awaits an increasingly fractured global economy if this continues: In this context, costly self-insurance will replace some of the current system’s pooled-insurance mechanisms. And it will be much harder to maintain global norms and standards, let alone pursue international policy harmonisation and coordination.
Lastly, there will also be a change in how countries seek to structure their economies. In the past, Britain and other countries prided themselves as “small open economies” that could leverage their domestic advantages through shrewd and efficient links with Europe and the rest of the world. But now, being a large and relatively closed economy might start to seem more attractive. And for countries that do not have that option—such as smaller economies in East Asia—tightly knit regional blocs might provide a serviceable alternative. Brexit holds important lessons for and about the global economy. We live in an era of considerable technological and political fluidity. The outlooks for growth and liquidity will likely become even more uncertain and divergent than they already are. n
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AppArel / Trade Treaties
Vietnam becomes the seventh country to ratify TPP11
V
ietnam, recently became the seventh country to ratify the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership, popularly known as TPP-11. The other six countries include Vietnam, Australia, Japan, Mexico, New Zealand, Canada and Singapore. Vietnam’s entry into the pack on January 14, 2019, creates an interesting dynamic in the cotton trade. Vietnam’s textile sector is burgeoning and is since 2013/14 when the export from the United States was about
in good need of cotton. In the last three seasons, Vietnam is the number
one million bales.
one importer of United States’ cotton. In the
Vietnam is followed by China in terms of U.S. exports, while other
2017/18 season, about 2.98 million bales (480
major importing countries are Turkey, Indonesia, and Pakistan.
lbs. each) were exported to Vietnam from the
Interestingly, Bangladesh is marching closely with Mexico in importing
United States. The export has more than doubled
U.S. cotton.n
UK explores both TPP and TPA with Japan
T
he U.K. is exploring entry into the Trans-Pacific Partnership as well as a free-trade agreement with Japan after it leaves the European Union at the end of March. The
India seeks enhanced trade opportunites with Vietnam
I
ndia is seeking investment opportunities in Vietnam. India is one of the major material suppliers to Vietnam’s garment and textile sector but trade value between the two sides remains
modest. The two sides have defined garment and textiles as a prioritised sector in bilateral ties. In the first 10 months of 2018, bilateral trade between the two countries increased by 47 per cent over the same period in 2017,
economic
bringing the countries closer to the target of 15 billion dollars in
partnership
two-way trade in 2020. Under the free trade agreement between
agreement between
India and Asean, most cotton and woven cotton fabric and knitted
Japan and the EU
fabrics imported from India will enjoy tax exemption from January
will take effect in
1, 2019, making India a competitive supplier of garment and
February,
textile materials and machines for Vietnam. n
allowing
the U.K. to trade under that framework as long as it remains in the bloc. But Britain will fall outside the treaty’s jurisdiction should a no-deal Brexit materialise, making a new trade pact necessary to maintain a smooth trading relationship with Japan. London is open to both bilateral and multilateral deals like the 11-nation TPP, which recently went into force, to ensure that Japanese companies can stably enter the British market.n
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AppArel / Trade Treaties
Govt focuses on making India’s FTA more efficient
T
he government is at present
the ASEAN, Japan and Korea came
focused on how to make India’s
into effect. Trade deficit with the
free trade agreements deliver
three countries, which stood at $4.5
more for all stakeholders and has also
billion in 2004 and $16.4 billion in
employed three think-tanks to analyse
2010, shot up to $29.7 billion in 2015
the on-going RCEP negotiations. A
before cooling down a bit to $26.6
study published by think-tank Third
billion in 2016.The three CEPAs not
World Network, India’s three free trade
only resulted in rising imports but also
agreements with the ASEAN, Japan
a progressive slowdown of exports.
and South Korea have resulted in
Available trends in both exports
growing deficits in merchandise trade.
and imports point to a hollowing
After the initial spurt in middle of the
out
previous decade, trade imbalances
of
the
manufacturing
base, which has prompted the
increased sizably after the three Comprehensive
present government to initiate measures for the revival of the
Economic Partnership Agreements (CEPA) with
manufacturing sector. n
US seeks rules of origin for its trade agreement with EU
UK plans entry into both TPP and TPA with Japan
T
he US wants its trade agreement with the EU to develop rules of origin that ensure that preferential benefits go to products
T
he UK is exploring entry into the Trans-Pacific Partnership as well as a free-trade agreement
genuinely made in the United States and the EU. Apart
from wanting a comprehensive duty free treatment for textiles
with Japan after it leaves the European Union
and apparel products, the US wants rules of origin to incentivize
at the end of March. The economic partnership
production in the US and EU and establish origin procedures that
agreement between Japan and the EU will take
streamline the certification and verification of rules of origin and
effect in February, allowing the UK to trade under
that promote strong enforcement, including with respect to textiles.
that
as
In customs and trade facilitation, the US aims at building
long as it remains in
framework
mechanisms to ensure shipments are released quickly after
the bloc. But Britain
determining
will fall outside the
laws and regulations. In addition, objectives
treaty’s
jurisdiction
in this area include providing for streamlined
no-deal
and expedited customs treatment for express
should
a
Brexit
materialise,
delivery
compliance
shipments,
with
simplified
applicable
customs
making a new trade
procedures for low-value goods and a more
pact
reciprocal de minimis shipment value–the
necessary
to
maintain a smooth trading relationship with Japan.
minimum value for goods that can enter the country duty-free–all generally aimed at promoting cross-border e-commerce.
London is open to both bilateral and
The US also wants to create a mechanism to take appropriate action if the
multilateral deals like the 11-nation TPP, which
EU negotiates a free trade agreement with a non-market country, such as
recently went into force, to ensure that Japanese
China. Additionally, the US wants to strengthen existing procedures and create
companies can stably enter the British market. n
new ones to address antidumping and countervailing duty evasion. n
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AppArel / REGIONAL TRADE
Regional supply chains to determine future global textile, apparel trade
A
Vietnam. Based on relatively lower wages, the less developed countries typically undertake the most labor-intensive processes of apparel manufacturing and then export finished apparel to major consumption markets around the world.
Asian supply chain: Economically advanced Asian countries such as Japan, South Korea, China and India supply textile raw material to the less economically developed countries such as Bangladesh, Cambodia, and
European supply chain: Developed countries in Southern and Western Europe such as Italy, France, and Germany, serve as the primary textile suppliers. Regarding apparel manufacturing in EU, products for the mass markets is typically produced by developing countries in Southern and Eastern Europe such as Poland and Romania, whereas high-end luxury products are mostly produced by Southern and Western European countries such as Italy and France. Furthermore, a high portion of finished apparel is shipped to
growing phenomenon - RPTN refers to geographically proximate countries forming a regional supply chain. Deepening of this RPTN increases the concentration of world textile and apparel exports. Broadly, three primary textile and apparel regional supply chains operate in the world today:
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AppArel / REGIONAL TRADE
developed EU members such as UK, Germany, France, and Italy for consumption. US supply chain: Here, the United States serves as the leading textile supplier, whereas developing countries in North, Central and South America (such as Mexico and countries in the Caribbean region) assemble imported textiles from the United States or elsewhere into apparel. The majority of clothing produced in the area is eventually exported to the United States or Canada for consumption. Associated with these regional production and trade networks, three trade flows are important: Asian countries emerge major sourcing hub for Asia: In 2017, close to 80 per cent of Asian countries’ textile imports came from other Asian countries, up from around 70 per cent in the 2000s. EU intra-region trade in textile, apparel stable: In 2017, 55 per cent of EU countries’ textile imports and 47 per cent of EU countries’ apparel imports came from within
the EU region. Over the same period, 68 per cent of EU countries’ textile exports and 75 per cent of their apparel exports also went to other EU countries.
Western hemisphere supply chain becomes unbalanced In 2017, as much as 80 per cent of textiles and 89 per cent of apparel exports from the Western hemisphere went to the same region. However, the operation of Western hemisphere supply chain is facing competition from Asian suppliers. For example, in 2017, only 24.8 per cent of North, South and Central American countries’ textile imports and 15.7 per cent of their apparel imports came from within the region, a record low in the past 10 years. Implementation of several new free trade agreements, such as CPTPP, RCEP, EUVietnam FTA, and the potential US-EU and US-Japan FTAs are in process. How they affect regional pattern of world textile and apparel trade remains to be seen. n
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AppArel / Prices
Labor, input costs to push up global apparel prices in 2019
A
s per the US Bureau of Labor Statistics, retail apparel prices, following months of rise, fell to a seasonally adjusted 0.9 per cent in November. The prices, compared to last year, declined 0.4 per cent. Now some of these retailers expect prices to increase as cotton prices went up $1 per pound in June only to level off at around a current 75 cents a pound. According to Cotton Incorporated, average import prices for cotton-dominant apparel increased 0.9 per cent month-overmonth in October. Year-over-year, cotton-
dominant apparel import prices were 2.7 percent higher. Glenn J Chamandy, President and CEO, Gildan Activewear, recently said cotton and polyester prices have gone up during the year, as have other costs across the supply chain. Gerald W Evans Jr, CEO, Hanesbrands, also instituted price increases of around 4 to 5 per cent in its innerwear business due to higher raw material costs.
Rising labor, input costs a concern As per Moody’s Investor Services, apparel companies face input cost inflation from labor and cotton. However, it’s the US-China trade war and threats of stiff tariffs on the industry that poses the biggest dilemma. The uncertainty has already caused importers to make major changes in their sourcing strategies, while increases labor and other costs in Asia and elsewhere have made it more challenging than ever to chase the cheapest needle.
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Tariff war a bug bear A tariff survey by Purchasing Manager’s Index, IHS Markit revealed that the US manufacturers expect tariffs to increase prices over the next two years. In the survey, conducted in second half of October, 44 per cent respondents expect tariffs and trade wars to lead to higher domestic prices for their goods in the US over the next two years.
Fear leads to price rise Fear is an important factor that will lead to price rise, believes Rick Helfenbein, President and CEO of the American Apparel & Footwear Association. The retailers, even with all the leverage they have will not be able to avoid increase in prices. They may force some of it back to their vendors—and that would be part of the natural process—and vendors will try to force some of it back to their factories. At the end of the day, there will be an increase in prices. n
Nicole Bivens Collinson, President of International Trade and Government Relations at Sandler, Travis & Rosenberg sees the tariffs threats a long-term, multiyear trend. The results will be an overall rise in global prices. President Trump first imposed $50 billion worth of tariffs aimed at China that left the apparel industry largely unscathed. The next 10 per cent tranche came in the form of an additional $200 billion in tariffs, hitting certain apparel items, some leather, and hats and handbags.
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AppArel / Luxury
Millennials to drive Chinese luxury market
A
survey by Bain & Company reveals, millennials, who make up one-third of China’s total consumers, were responsible for the growth in Chinese market which touched 142 billion yuan in sales in 2017, about 20 per cent higher than earlier. Millennials are the generation born between in the early 1980s and early 2000s. In China, millennials comprise two distinct groups: those born after 1980 and those born after 1990. They are referred to as the single most important demographic group on the planet today by Goldman Sachs. Indeed some luxe brands have caught the attention of millennial customers.
Brands cash in on Gen Y Alexandre Arnault, the youngest CEO in luxury fashion, has re-launched collaborations with artist Olafur Eliasson, Fendi, M/M and cult streetwear brands Supreme and OffWhite, to make the century-old suitcase brand one of the most sought-after names among his peers. In June, Arnault released a couple of transparent polycarbonate suitcases costing $1,000 in partnership with the streetwear sensation Off-White by Virgil Abloh. In 2016, Bernard Arnault’s LVMH bought 80 per cent stake in Rimowa for $716 million and immediately appointed Arnault as co-CEO, alongside Dieter Morszeck, the grandson of the suitcase’s founder. Today, it’s extending its reach to become more than a travel companion by marrying the ‘Made in Germany’ concept with LVMH’s business acumen.
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are sneakers. Its sock-sneakers infiltrated the wardrobes of celebrities and fashionistas, especially the limited-edition, bright-red pair reinvented by Parisian retailer Colette. The stacked-sole Triple S, which costs US$850, is a global bestseller online and offline.
Millennials to rule over luxe market
Balenciaga is another brand that has caught the eye of millennials. In the Lyst Index, Balenciaga raced ahead of Gucci for three quarters in a row to become the most popular fashion brand. According to Cédric Charbit, the brand’s CEO, Balenciaga is also the fastest-growing brand at its parent company, Kering. Last year, Balenciaga saw over 100 per cent growth in several categories, thanks to the millennials who make up 60 per cent consumer base of the iconic label. Men’s fashion is also becoming a strength for the coutureturned-edgy brand. In 2016, Gvasalia brought the men’s line back to the house after 17 years. The brand is no longer the couture house that Cristóbal Balenciaga founded in 1919, nor the elegant brand imagined by former creative director Alexander Wang. They now offer flea-market vintage, cool hoodies, big logo prints and off-the-shoulder parkas. Balenciaga products that have made the biggest impression
Nowhere is Balenciaga’s influence more noticeable than among China’s millennials. In late April, an incident involving Chinese customers being mistreated as they were queuing for the new Balenciaga sneakers in a Paris department store went viral on Weibo. It led to a short boycott of Balenciaga, and prompted an apology from the brand. The luxury industry is being universally disrupted by the young game changers, from sellers to shoppers. The young, affluent, savvy yet ephemeral millennials have taken the industry off guard. The Chinese cohort will continue to dominate the market as the nation’s economy booms and the balinghou and jiulinghou take over as the consuming class. Capturing the coterie is crucial for luxury companies. A distinctive brand identity with high-quality products is just an essential start; a cultural understanding of their needs and desires is the key for brands to win the battle in this hefty fashion reshuffle. n
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AppArel / Concern
Deep-rooted concerns in textile industry needs attention to fast forward growth
T
he Indian government, in order to support the industry, has increased import duty on several textile items. However, to ensure long-term sustainable revival, it first needs to address certain deeprooted problems. Currently, the industry is finding it extremely difficult to compete with players like Bangladesh and Vietnam.
Tackling competition from other Asian countries Valued at around $127 billion, the textiles and apparels industry is a huge foreign exchange earner, and second-largest employer in India. However, the country’s share in
global textiles exports is just 5 per cent, which is minuscule as compared to China’s share of 38 per cent. Much smaller players like Bangladesh and Vietnam, having a share of 3 per cent in global exports, are increasingly threatening India’s exports. Other bug bears are domestic issues. Textile exports were expected to increase with the abolition of the Multi Fibre Arrangement (MFA) in 2005-06. However, this growth did not materialise, as the industry faced increased competition from low-cost producers like Vietnam and Bangladesh. Growing Chinese labour cost could also have provided an opportunity to increase India’s share in global textiles industry. But domestic issues including outdated technology, inflexible labour laws, infrastructure bottlenecks, and a fragmented nature of the industry remained a bug bear. As per World Trade Organisation’s Agreement on
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AppArel / Concern
Subsidies and Countervailing Measures, a country needs to phase out export subsidies for a product as it achieves export competitiveness, defined as 3.25 per cent share in world trade. As per this agreement, India needs to end export subsidy for the textiles sector by 2018. The industry needs to abolish some of the existing export subsidies such as Merchandise Export from India Scheme (MEIS) and the Export Promotion Capital Goods (EPCG) Scheme.
Skill development, technology upgradation need of hour The government needs to focus on regional, cluster, technology upgradation and skill development subsidies, which benefit all producers. Globally, manmade textiles and garments are in high demand. However, India, despite being the second-largest textiles exporter, lags in this category due to the unavailability of manmade fibres at competitive prices. The total textiles and clothing exports from India, cotton accounts for around 75 per cent. We need to align our production with the global consumption patterns.
Flexibility in labor laws and adequate skilling is likely to boost the textiles sector in a big way. For instance, allowing women to work in all three shifts, after taking into account adequate safeguard measures, will enable the industry to employ more female workforce. Technology upgradation schemes will help Indian players increase both their productivity and competitiveness. In addition, the government needs to carefully evaluate various trade agreements—Bangladesh and Vietnam benefit from favorable access to some of the big apparel markets. Although India has the required ingredients in the form of raw materials and abundant labor to make the industry a success, outdated technology, inflexible labor laws and infrastructure bottlenecks hamper its growth. The government needs to re-look at fibre neutrality and evaluate various trade agreement opportunities, while domestically focusing more on technology upgradation and skill development. n
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AppArel / BRAND RETAIL
Six new brands enter ‘Top 50 Valuable French Brands 2019’ ranking
S
ix new brands have entered the ‘Top 50 Most Valuable French Brands 2019’ ranking, released by WPP and Kantar recently, along with popular luxe brands brands Louis Vuitton, in the first position, Chanel at second at Hermes third. The luxury sector, accounting for 47 per cent of the total value holds a prominent position, in the ranking. This is the second annual BrandZ France ranking, released by WPP and Kantar.
Total brand value declines with lack of innovation The new entries include: Céline at the 38 position, Van Cleef & Arpels 43rd , Vichy at 41st,Tefalon 46th, Carte D’Or on 44th, and Maisons Du Monde 49th. The total value of top 50 brands rose 12 per cent, which
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though is significantly ahead of the 2.3 per cent increase in the country’s GDP, is less compared to the 21 pe rcent rise in total brand value seen in the BrandZ Global Top 100 Brands. The primary reason for this is comparatively low perceived innovation score for France’s top brands. Taking 100 as the benchmark for this measure, the Top 50 most valuable French brands average 103 compared to 113 for both BrandZ Global Top 50 and the US Top 50 rankings. The number of brands that aim to be socially responsible has also grown 14 per cent over the past year, double the rate for brands that are low scorers. Some French brands emphasise on innovation by media and providing opportunities for consumers to test products. Brands in the Top 10 for CSR include: Decathlon,Michelin,Air Franceand Credit Agricole. encouraging staff to act as brand ambassadors on social
Emerging trends Commissioned by WPP, the valuation behind the BrandZ™ Top 50 Most Valuable French Brands was conducted by brand equity research experts Kantar Millward Brown. The methodology is similar to the one used to calculate the annual BrandZ Top 100 Most Valuable Global Brands ranking, now in its 13th year. But some French brands are delivering on innovation with initiatives that include: encouraging staff to act as brand ambassadors on social media and providing opportunities for consumers to test products. Sports retailer Decathlon is viewed by consumers as the most disruptive brand in the ranking. Some emerging innovative trends in the index are:
Dior registers highest growth Dior registered highest growth in the ranking. It by 58 per cent; Rémy Martin followed closely with 39 per cent growth and Saint Laurent by 34 per cent.
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AppArel / BRAND RETAIL
Promoting regional products Preference for fresh products on the rise The percentage of French consumers opting for fresh produced has risen 33 per cent from 29 per cent a decade ago. More than half of French consumers say they are willingly paying more for higher quality.
Percentage of experienced consumers increase Nearly one third of the French population is over 55 years. They account for over 40 per cent of expenditure on consumer goods and prefer great food, fashion, travel and tech.
Supermarkets and national brands are now promoting regional heritage of selected produce, and a new brand, C’est qui le Patron, co-created with consumers, is successfully selling a growing range of fresh food, from milk and butter to burger patties. The ranking combines rigorously analysed market data from Bloomberg and Kantar Consulting with extensive consumer insights. Globally, the research covers 3.6 million consumers and more than 122,000 different brands in over 50 markets. In France, it interviewed more than 101,000 consumers for over 1,100 brands in 88 categories. As the only brand valuation ranking grounded in consumer opinion, BrandZ’s analysis enables French brands to identify their strength in the market and provides clear strategic guidance on how to boost value for the long-term. n
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AppArel / Brand RetaiL
Burberry works on its strategy to boost bottom lines
B
ritish brand Burberry is having distribution
into positive business performance will take
problems. The company’s supply chain
time. Most discussions to evolve its wholesale
remains weak. The brand’s strategic
distribution are now complete and the required
focus is on igniting brand heat — starting with
changes to its third-party distribution network are
influencers and key opinion leaders, which
expected to accelerate.
will cascade to all consumers. But shifting
All regions performed in the first half. The
consumer perception, transitioning product,
UK and Italy grew, with an improvement in
and transforming the distribution will take time.
the second quarter, while the Middle East
Burberry is undergoing a major transformation,
remained weak due to macro factors. But Asia
with a new designer, a new focus on ultra-
Pacific grew by a mid-single-digit percentage.
luxury, a new logo and a change to the
The company has seen the successful launch
way it drops its product. But while early signs
of its new go-to-market model. The broader
are encouraging, transitioning the product
luxury industry faces the prospect of slowing
offer, evolving its distribution, changing wider
economic growth globally and weak demand
consumer perception and seeing this translate
from Chinese consumers. n
Uniqlo Japan’s profit to rise in H2 2019
J
apan Uniqlo profit is expected to rise sharply in the second half of the year on strong cost control. Fast Retailing is the
M&S’ UK to reshape product offerings
M
&S’ UK sales declined by 2.2 per cent on a like-for-like basis and 2.7 per cent in total. International sales too fell, although the large size of drop was mainly due
to the sale of its Hong Kong business to its franchise partner
owner of Uniqlo. The retailer’s overall operating
and the closure of stores in loss-making markets. Factoring
profit fell eight per cent over September to
those out, international revenue was down only 1.4 per cent.
November. The domestic business is expected
Reducing consumer confidence, mild weather, Black Friday,
to record a larger-than-expected decline in
and widespread discounting by competitors made November
profit in the first half due to the discounting.
a very challenging trading period for the company.
The company will increase discounting
Improvements to its online proposition and operations helped it to
in Greater China and South Korea to offload
mitigate lower footfall to stores resulting from, in part, the increasing
winter inventory. However, Uniqlo’s international
pace of change in the store estate. Women’s wear online growth
business is expected
significantly outperformed, driven by areas including dresses and
to rake in strong first-
knitwear. Stock that went into its clearance sale was down around
half revenue and profit
25 per cent, as a result of a planned reduction in stock levels.
growth.
Operating
The company is still in the early
profit for the business
stages of far-reaching changes in
jumped
per
range, style, customer focus and
cent in the reported
channel mix. Its objective is to reshape
quarter, boosted by a
its buy, deliver market leading value
double-digit growth in China. The firm opened
and focus on stylish and wearable
78 stores in China last fiscal year, expanding
wardrobe must-haves as it grows the
to 633 locations, while it closed four stores in
business with family-aged customers
Japan, ending the year with 827 stores. n
seeking style, quality and value.
12.6
n
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AppArel / Brand RetaiL
Retail sales grows highest in six years
M
astercard
SpendingPulse,
which
increased 19.1 per cent over
provides insights into overall retail
last year. The expenditure
spending trends across all payment
on home improvement was
types, including cash and check, reported a
recorded at 9 per cent. Sales
5.1 per cent holiday sales increase to over $850
in the home furniture and
billion this year – the strongest rate since 2012.
furnishings
The research firm reviewed holiday shopping
increased by 2.3 per cent.
from November 1 through December 24.
category
also
However, sales in electronics and appliances declined by 0.7
Led in part by a surge in home improvement
per cent. Department stores sales also slipped by 1.3 per cent
spending, this season’s holiday retail sales were
following two years of growth below 2 per cent. Online sales growth
at their highest in six years. Online shopping
for department stores, however, increased by 10.2 per cent. n
Gap shuts down weaker stores to increase profitability
Luxe brands focus on accessories to attract customers
V
etements has created a phone case with tech accessory brand Casetify, which has also collaborated with
luxury brands including Moncler and Saint Laurent for relatively affordable accessories with a luxury brand name attached. The case is being sold through Casetify and retail partners like Ssense. This is part of a growing trend in the luxury business of leaning into the accessibility of accessories. Luxury brands rely on the exclusivity of their more expensive apparel
offerings
that
and
G
ap is closing hundreds of its stores that don’t fit its expectations, whether in terms of profitability, customer experience or traffic trends. Instead focusing on higher-
performing shops, Gap hopes to save some $100 million and strengthen healthier stores.
accessories offer a good way to do that. Customers
Gap offers apparel, accessories, and personal care products
who are not affluent enough to be regular Gucci
for men, women, and children under the Old Navy, Gap, Banana
customers and drop more than $1,000 on a jacket
Republic, Athleta, and Intermix brands. Its products include denim,
can instead save up and get a Gucci belt or a pair
tees, button-downs, khakis, and other products; and fitness and lifestyle
of socks. At the same time, the brands are able
products for use in yoga, training, sports, travel and everyday activities.
to sell more product and create relationships with
The operating model improvement process at the company’s
customers who may make further purchases in
namesake brand has been fraught with inventory problems.
the future without having to lower any of the prices
As a result, the company was saddled with excess inventory
for their more expensive items — something that
coming into the first quarter, which consequently impacted the
luxury brands are loath to do normally.The phone
company’s sales from this brand as well as its ability to optimize
case costs around $250. n
its margins, since it forced the brand to be more promotional. n
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AppArel / trends
Denim trends in 2019 to be influenced by consumer opinions
D
enim trends for 2019 are expected
Flare
and
crop
flare
to be shaped by consumers and
are gaining traction in the
the environment around them. The
women’s market, while men’s
relationship between denim and politics is
is moving toward straight cuts
expected to pick up steam in the coming year
with an exaggerated cuff.
as the next US presidential election nears and
Bolder
historic
younger generations continue to find their voice.
come
through
A
whole
generation
is
getting
references in
washes
into
like acid, enzyme and tie-
demonstrating and gaining a voice about
dye. Raw denim is shifting
what’s happening around the world. Millennials
toward something that looks
and Gen Z will likely follow in the footsteps of
handmade
young generations from the ’60s and ’70s, which
a-kind. This is an artisanal
took bold actions to fight racism and injustice,
direction, which will challenge
fought for women’s rights and protested the
many companies, particularly
Vietnam War. Their fashion will follow, too.
those that manufacture on a large and cheap scale. n
Under Armour returns to its roots with sportswear
U
nder Armour is returning to its roots as a sportswear company, refocusing its
and
one-of-
Demand for yoga wear in US increases by 35.8%
T
he number of yoga products
in
stock
in US in 2018 has
increased by 35.8 per
attention on making clothes for athletes.
cent compared to 2016.
This refocus comes at a critical time for the
Yoga leggings skyrocketed
Baltimore-based company. Earlier this month
by 87 per cent compared
it issued an underwhelming financial forecast
to 2017. What was once
at an investor day, while its culture has
a simple stretchy legging
also been in the spotlight after a report that
has become a wardrobe phenomenon.
employees put strip club visits on expenses.
Pricing in the traditional sports market, despite some
Under Armour, started in 1996, expanded
fluctuations, has generally maintained a consistent level.
aggressively and took on the likes of Nike
Traditional active wear retailers are having to compete to
and Adidas. But its shares have fallen by 68
maintain their valuable relationship with customers. Non-
per cent since 2015 while sales have flagged
traditional sports retailers are getting in on the game and
in North America. Under Armour seeks to
launching their own active wear collections at a more
capitalise on rising demand
accessible price point for consumers.
for athletic-themed clothing.
So retailers need to harness the power of data and
The company’s ventures into
understand when to buy-in or buy-out of trends. Grey and
sports-inspired fashion included
white are the most favored color for new active wear products,
a tie-up two years ago with
holding almost 23 per cent of the color palette. High rise
designer Tim Coppens, known
leggings are the most popular style for replenishments – not
as Under Armour Sportswear. It
surprising seeing they are a flattering design that suits all body
has since been discontinued. n
types.
n
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AppArel / Business
US: Apparel sales hit all time high this holiday season, inventory worries persist
U
S’ apparel industry is bouncing back with shoppers flocking stores such as Lululemon, Abercrombie & Fitch, Old Navy and Urban Outfitters this holiday season. As Abercrombie & Fitch CEO Fran Horowitz reveals, outerwear sales are trending higher during the fourth quarter, thanks to cooler temperatures finally hitting much
of the country, in addition to soft and cozy items like sherpa hoodies and pajama sets flying off shelves.
Leading brands fuelling apparel sales growth As per consulting firm Customer Growth Partners, spending on apparel registered the highest growth since 2011, increasing 5.4 per cent over Black Friday weekend. The category, as Craig
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AppArel / Business
Jonhson, President of CGP reveals, normally registers a growth of only 1 to 2 per cent only. The National Retail Federation predicts overall holiday sales will grow between 4.3 and 4.8 percent this year, with apparel retailers making nearly a quarter of their annual sales during the holidays. Some retailers are known to continuously outperform, with the biggest outperformers being off-pricers. TJ Maxx owner TJX, for example, reported a 7 per cent increase in sales in the latest quarter, with net sales increasing 12 per cent from a year ago to reach $9.8 billion. Brands such as Nike, Adidas and Under Armour are fuelling gains in apparel sales. Targeting women, these brands are rivaling Lululemon and Gap’s Athleta brand, which are now trying to appeal to more men. Nike, for example, will open up studios to sell yoga pants in some of its stores.
Active wear gains ground Johnson points out, performance wear is currently the fastest-growing category as more and more women are now
comfortable wearing leggings, graphic tees and jogger pants outside the house. Brands like Bandier, Outdoor Voices and Fila are taking over Instagram feeds, and their puffer jackets and sports bras are on many women’s holiday wish list. Amazon too is expanding its active wear range. Coresight Research reveals the e-commerce company recently listed over one million women’s and men’s clothing products on its site, registering a 25 per cent increase from February 2018. Basics brands like Gildan and Calvin Klein, along with Under Armour and Adidas, are gaining popularity on Amazon.
Inventory still a bug bear for retailers However, retailers such as Gap and J Crew are struggling to balance supply and demand, so they don’t end up with too much inventory on their shelves or in stock rooms. Nomura Instinet analyst Simeon Siegel noticed during the third quarters that department stores, as a group, reported their first quarter of inventory growth after 10 quarters of declines. These stores have managed to pass on excess apparel inventory to off-price chains such as TJ Maxx and Ross Stores more easily in the past, However, it’s becoming increasingly difficult for them to do so now. There are fears, apparel companies might get more promotional in 2019 increasing the pressure on retailer’s margins. However, US President, Donald Trump and Chinese President Xi Jinping have decided to delay increasing tariffs in early 2019 on many consumer goods, including clothing. And this truce is expected to benefit a number of retailers, including Fossil, Stitch Fix, Skechers and Steve Madden. n
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AppArel / Markets
China to emerge the largest fashion market in 2019, beating the US
A
s per ‘State of Fashion 2019’ report by McKinsey & Company and the Business of Fashion (BoF), China will go beyond the US as the world’s largest fashion market for the first time in 2019. The report predicts leading trends expected to shape luxury fashion industry in 2019.
Trade war a business dampener Despite predicting year-on-year growth of 3.5 to 4.5 per cent for the fashion industry, experts remain pessimistic. This pessimism could be driven by fears of the accelerating trade war between China and
the US, and uncertainty in Europe over how Brexit will impact the global fashion market, according to the study. However, in the report, Joann Cheng, Chairman of Fosun Fashion Group & Lanvin, expresses her belief that the trade war will have minimal effect on China’s business.
Oomnichannel integration on the rise Technology-impacted consumer shifts are among the most important trends predicted in 2019. Luxury fashion brands in China have been quick to utilise the country’s most popular social-media-turned-e-commerce app WeChat, which boasts over one billion daily active users. Around 54 per cent of the McKinsey-BoF State of Fashion Survey respondents prioritise omnichannel integration alongside investing in e-commerce and digital marketing as their number one priority for 2019.
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Consumers demand transparency
While 51 per cent of executives in the premium and luxury fashion sector believe fashion sector will ‘become better; in 2019; 19 per cent believe it will stay the same. In North America, staggering 64 per cent executives believe the industry will become worse suggesting America is more cautious of impending trade war tariffs.
China’s growing domestic demand China is the world’s fastest-growing consumer market, accounting for more than 18 per cent of all final goods consumed. Chinese manufacturers are using its vast production abilities to cater to surging domestic demand even for luxury products. China’s Singles’ Day shopping holiday in 2018 hit an estimated $30.8 billion in sales, surpassing both Black Friday and Cyber Monday in the United States combined.
The discerning customers are demanding specific information on materials, labor conditions, duties and mark-up. According to the report, fashion companies must cater to demand of distrusting consumer and ensure full transparency across the value chain. 65 per cent of respondents cited consumer needs for trust in product authenticity and creative originality among their top 5 trends for 2019. Surveying over 270 global fashion executives, the report uses McKinsey & Company’s database of over 500 private and public companies to analyse and compare the performance of individual business against their peers by category segment and region. It recognises the top 20 companies leading charge in the global fashion arena. These “super winners” now account for 97 per cent of global economic profit, compared with 70 per cent in 2010, showing their increasing dominance in the market. These 20 companies include: Inditex, Nike, LVMH, TJX Companies, Hermès, H&M, Richemont, Ross, Adidas, Kering, LBrands, Pandora, Fast Retailing, Next, VF, Luxottica, Michael Kors, Gap, Hanesbrands and Burberry. n
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AppArel / aepc ACTIVITIES
Dr. A Sakthivel, Vice Chairman, AEPC, ( 2nd from R) Mr. Rahul Mehta, EC member, AEPC and President, CMAI( Extreme L) , at the launch of India series- The Textile Story- by Smt. Smriti Zubin Irani, Honorable Union Minister of Textiles, GoI
Textile Ministry launches coffee table book on the industry 40 / APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | February 2019 Apparel_February_2019_Gaurav.indd 40
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AppArel / aepc ACTIVITIES
T
he India Series- the Textile Story- Coffee Table book 2019 was launched by Smt. Smriti Zubin Irani, Honourable Minister of Textiles, GoI, on 16 January 2019 at Udyog Bhavan, The book has been curated and published under the guidance of the Ministry of Textiles, by Trendsetters Marketing Services Pvt. Ltd. Dr. A Sakthivel, Vice Chairman, AEPC, Mr. Rahul Mehta, EC member, AEPC and President, CMAI, and Mr. Gautam Nair, EC Member, AEPC, were invited to the afternoon launch by HMoT. Impressive stories and details about the diverse and huge Indian Textile and Apparel industry have been brought together in this edition of the book to focus on the future of the Textiles and Apparel Industry of India. On the occasion, Dr. Sakthivel, Vice Chairman, AEPC said, “There is perhaps no better time to be having such a publication than the onset of 2019. I say this because the textile and apparel sector, much like the broader Indian economy, is experiencing a process of overwhelming transition and metamorphic structural change. And this change presents both opportunities and challenges. More opportunities than challenges...” All the leading Textiles and Apparel councils and associations of India have participated and contributed stories and data to the book, focusing on the journey of growth over the last four years. Apart from AEPC, Export Promotion Council of Handicrafts, Clothing Manufacturers Association of India, Confederation of Indian Textiles Industry have been a part of the making of this edition. Dr. Sakthivel went on to say, “I am happy to share that the Indian Apparel exports have closed 2018 on a very optimistic note. We exported readymade garments worth USD 1374.3 million in December 2018, with a growth of 2.77 per cent against the corresponding month of 2017, amounting to Rs. 9720.59 cr (as against Rs. 8590.47 Cr. in December 2017 with the growth of 13.16 per cent). This gives us immense confidence to ride the new wave of global fashion and find new ways of improving our game through the smart use of technology and innovation.” He congratulated the Government, saying there is no better time to be in India than now from his textiles career spanning more than four decades. He said “I would like to compliment this government for balancing the economic growth trajectory carefully with social development, without disturbing the diverse environmental and cultural heritage of the country. I, as an Indian, feel fortunate to be witnessing such
exemplary partnerships and participation of the government, the states, the industry and most importantly, the people. We are all connected like never before.” He went on to say, “ As we all strive to achieve an all round growth and build a resurgent nation, the government has been working on building and augmenting the infrastructure to support this massive expansion. Sector specific zones and parks, Industrial corridors and smart cities are being developed based on state-of-the-art technology.” He gave credit for the success of the sector to the “able guidance and unstinted support of our Honorable Minister Smt Smriti Zubin Irani. From handling the roll out of unique reforms like GST to making our workplaces safer for women workers through Internal Complaints Committee, the Minister has brought about ground-breaking transformation of the sector.” He also expressed gratitude to the Honorable Minister for showcasing this fragmented and highly diverse sector on one unified platform through events like Textiles India 2017, in Gandhinagar, Gujarat. He spoke about the ‘Symphony of Indian Textiles 2019’, recently hosted by the Minister, that brought together the entire value chain of Indian textiles once again. Such events, he said, are a testimony to the continually improving presence of India on the global textile map. Sakthivel proudly said that the Indian Textiles industry has evolved! “We are now host to the best fashion brands of the world. We are increasingly engaging with global brands and buyers to plan for greater sourcing from here. This gives me the confidence to invite all Buyers of the world today to source from and sell in India.” He complemented the publishers on the compilation of the unique and beautiful coffee table book and expressed confidence that the insights from this coffee table book will help the Indian Textiles and Apparel sector to position itself far stronger and improve its brand image globally. n
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AppArel / aepc events
Dr. A Sakthivel, Vice Chairman, AEPC, ( 2nd from R) Mr. Rahul Mehta, EC member, AEPC and President, CMAI( Extreme L) , at the launch of India series- The Textile Story- by Smt. Smriti Zubin Irani, Honorable Union Minister of Textiles, GoI
AEPC organises seminar on currency risk management and GST update
A
EPC organised a seminar on Currency Risk Management, Outlook of Rupee & GST Update in Noida on December 21, 2018. The seminars covered rupee`s
outlook and efficient ways to manage the risks, exchange traded derivatives and SME listing and information on minimising forex risks & hedging followed by session on GST Update like latest changes in GST procedures, process or any other issue. n
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AppArel / events
(L to R) Dr. A Sakthivel, Vice Chairman, AEPC, Shri S P Velumani, TN Minister of Municipal Administration and Rural Development, Smt. Smriti Zubin Irani, Hon’ble Union Minister of Textiles, Shri O S Manian, TN Minister for Handlooms and Textiles during the inauguration of Global Textile Expo 2019 & IND -TEXPO, 2019
Global Textile Expo 2019 & IND -TEXPO, 2019 held in Coimbatore
G
lobal Textile Expo - 2019 & IND -TEXPO, 2019” at Codissia Trade Fair Complex, Coimbatore during 27 - 29January, 2019 was inaugurated by the Hon’ble Union Minister of Textiles Smt. Smriti Zubin Irani in presence of Hon’ble Minister of Tamil Nadu Mr. O.S.Maniyan, Minister of Textiles, Mr. S.P.Velumani, Minister of Municipal Administration & Rural Development and Mr. Pollachi V.
Jayaraman, Dy.Speaker, Tamil Nadu Govt.,District Collector Coimbatore, Vice Chairman, AEPC Dr. A. Sakthivel and other dignitaries. Dr. A. Sakthivel, Vice Chairman, AEPC thanked the Hon’ble Union Minister of Textiles Smt. Smriti Zubin Irani for her continuous support to the industry by earmarking Rs.6000 Crores special package, support in increasing MEIS from 2% to 4%, announcing HSN code for Technical textiles of 207 products, taking efforts to increase ROSL, conducting Textile’s conclave in New Delhi for the benefit of the industry etc., He has also thanked Govt. of Tamil Nadu for taking initiatives for the benefit of Textile Industry in Tamil Nadu. n
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AppArel / Retail
Online retailers adopt ‘click to brick’ strategy to augment business
T
ill recently, most online brands depended only on one form of retail and brick and mortar stores were passé. Companies like Warby Parker, Bonobos and Casper relied more on their well-designed website to boost sales. However, growing competition, surging online advertising costs and cheap mall space are prompting many digital retailers to open offline stores. In fact, 90 cents of every retail dollar in the US is spent on a physical location. This “clicks-to-bricks” phenomenon encompasses big names like Amazon Books and Casper as well as less-known startups
such as men’s shorts purveyor Chubbies and hair color brand Madison Reed.
Brick and mortar stores a good back up plan Physical presence is necessary for a brand’s long-term growth. Retail startups now include a store opening plan in pitches to venture firms. Bonobos, acquired last year by Walmart, recently opened in Lexington, Kentucky, and will soon have stores in over 60 locations. Buying ads on Google, Facebook and Instagram once made a lot of sense as it allowed nascent brands to narrowly target shoppers and grow fast. Now social feeds are jammed with posts from obscure brands. The competition to grab attention has pushed up the cost of ads even as they become less effective
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AppArel / Retail
sales. In July, Margaux opened a permanent store in Manhattan’s Greenwich Village. She’s planning more.
Physical stores boost bottomlines
with so many of clamoring for attention. With millions of square feet of space available across the country, opening a physical store has become cheaper. Landlords are offering leases as short as a year with extension options. That flexibility extends to temporary locations, too, with spaces dedicated to rotating pop-ups so tenants can easily test concepts. To further reduce risk, they’re offering to help pay for store remodeling and taking a small percentage of sales instead of monthly rent. A physical store offers instant gratification, merchandising, employee service and dressing rooms to get shoppers to buy more and return fewer items. Alexa Buckley, co-founder women’s shoe purveyor Margaux, outlines the merits of having a store when she rented a loft space in Philadelphia. Despite heavy rains and wind from the remnants of a hurricane, 200 women showed up and generated almost a month’s worth of
Profit margins in physical stores are better, too, without the brands needing to pay for shipping or as many returns. Plus, offline customers tend to buy more, and after the store’s debut there is a noticeable lift in the surrounding area’s online sales. On the heels of that brick-and-mortar success, Kleiner Perkins Caufield & Byers, an early Amazon backer, invested $30 million in UntuckIt so it could open more stores. Bonobos’s “guide shops” are set up for customers to try on and order clothes. The brand focuses not on sales-per-square-foot — a traditional industry metric — on how much the stores drive sales online and off in a particular market. Digital natives are absorbing many of the lessons honed by retailers for the past century: that people like to feel the fabric, try on glasses, get face-to-face shopping tips. The question is whether Bonobos, Warby Parker and the rest have also learned the painful lessons — how over-expanding can cannibalise existing stores — that laid low so many specialty retailers in recent years. n
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AppArel / Sustainability
Sustainability Initiatives: Repair not replace gaining ground globally
F
or a long time, the global apparel industry has been greatly impacted by the use and disposal of clothing. A paper by WRAP suggests if consumers use their clothes for even nine months longer, they can reduce their eco-footprint by around 20 to 30 per cent. Applying this principle, outdoor manufacturers like Vaude, Patagonia, and Peak Performance are extending the lifecycle of their products through their second-life initiatives.
Measures for a sustainable value chain Peak Performance in collaboration with the Sustainable Apparel Coalition (SAC) has developed the popular Higgs Index, which offers standardised measures for a more sustainable value chain. Companies are also incorporating life-prolonging measures into the planning of their garments. Accessories like zippers, cords, and push buttons are being offered as spare parts. Many also offer and promote repair service. Vaude recently joined the online platform ifixit to develop repair instructions, while Patagonia repairs damaged clothes on site free of charge. It also explains the sustainable use of functional clothing in its workshops.
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AppArel / Sustainability
Sharing, exchanging and renting on the rise Lately, ownership of clothes has lost value. Clothes today are shared, exchanged and rented depending on the function and occasion. The industry’s second life initiatives are building on this attitude. Companies now take back used clothing from their customers. They are recycled, resold, or donated to charitable associations. Since October 2018, sporting goods retailer Decathlon has been offering an online platform for resale of sporting goods by customers. At so-called Trocathlons, it is also possible to buy and sell used goods in the chain’s stores similar to a flea market. disposal, upcycling, and recycling. Houdini sets up recycling boxes in its outlets and collects sorted-out polyester clothing. Customers can use the containers with a clear conscience. Houdini guarantees professional recycling. Recycling till now was limited to the outer fabric. Jack Wolfskin presented its Texapore Ecosphere jackets at ISPO Munich 2018. The outer fabric of these jackets, as well as the membrane and inner lining, are made of completely recycled material. In the winter of 18/19, shells, fleece, and hybrid models will also appear in fully recycled materials. n Vaude, in cooperation with eBay, has set up an online shop that consumers can use to sell their used Vaude products. The company is neither the operator of the platform, nor does it earn anything from it. The second-use website is one of many lifeextending measures for products. Burton’s sustainability program focuses on returns. The snowboard brand, which earlier focused on replacing damaged clothes, now aims to repair. The company has targeted a repair quota of 40 per cent by 2020. The North Face offers returned goods and items with production defects in their own US online store – at reduced prices and with a one-year guarantee on wear and tear. James Rogers, Head of Sustainability at The North Face, sees resale as an important measure “to reduce the ecological footprint and open up new markets.
Recycling the new mantra When used clothing no longer meets the requirements for resale, all that remains is environmentally friendly
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AppArel / Sustainability
Youth driven consortium increases upcycling among new designers and businesses
T
he rise of upcycling among new designers
uptick in younger sustainably minded brands
and businesses is increasing due to a youth-
could possibly stem from design schools, too,
driven consortium within the fashion industry
which have been adding more sustainability-
which is poised to support brands that create
focused courses into their curriculums, training
things in a positive way. With this, the process
their students to adopt new ways of thinking
works well for younger, smaller brands who find it
about fashion systems. Programs teach young
easy to buy deadstock or vintage garments for
designers to think critically about how fashion
the purpose of upcycling in place of expensive
is made and consumed, and to reconsider
fabrics that often require minimum orders. This
both its processes and outcomes. n
UK apparel brands plan to minimize waste
M
ore than 80 companies have signed up to the Sustainable Clothing Action Plan (SCAP) to
date, including ASOS, Next and Primark. By selecting more sustainably-produced fibers such as cotton and viscose, SCAP signatories have reduced the lifetime water
Increased consumption creates millions of tonne of textile waste
I
ncreased
consumption
patterns
have
millions
of
created
tonne
of
textile waste in landfills and unregulated settings.
footprint per ton
Negative consequences at
of clothing they
each step of the fast-fashion
produce by 15
supply chain have created a
per cent. The
global environmental justice dilemma. While fast fashion offers
signatories have
consumers an opportunity to buy more clothes for less, those
also
reduced
who work in or live near textile manufacturing facilities bear a
their
collective
disproportionate burden of environmental health hazards.
carbon footprint
From the growth of water-intensive cotton, to the release of
by 11.9 per cent
untreated dyes into local water sources, to low wages and poor
and have made moves to become more
working conditions, the environmental and social costs involved
resource-efficient, such as redesigning
are widespread. Potential solutions include sustainable fibers,
their approach to pattern cutting or donating
corporate sustainability, trade policy and the role of the consumer. In North America, the fast fashion market is likely to face
factory offcuts to be upcycled. The Sustainable Clothing Action Plan
tremendous growth in the coming years owing to swiftly
(SCAP) was founded in 2012 in a bid to
increasing number of fast fashion retailers in the region. The
help big-name fashion brands minimise
European market is pegged to foster high revenue in future
their waste, water and carbon footprints
owing to growing adoption of new fashion trends. In India,
while
China, and Japan, the market is poised to expand further in the
sourcing
materials.
n
more
sustainable
coming years due to high purchasing capacity and penetration of major fast fashion retailers in the region. n
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AppArel / Sustainability
Recent British poll indicates consumers’ lack of trust in fashion brands
A
recent poll in Britian indicated six in 10 people
provided by clothing companies. The poll based on
are willing to spend upto 5 per cent more
interviews with 7,700 adults across seven nations from
on clothing if garment workers are paid the
Britain and France to the United States - found that
so-called “fair living wage” that would allow them
consumers considered luxury brands to be no better
to cover the basic needs of their families. However,
than budget or high-street retailers when it came to
according to an opinion poll by Ipsos MORI, over
sustainability. About 6 per cent of respondents associated Italian
two-thirds of consumers found it difficult to know if
label Gucci and budget chain Primark with having sustainable
these brands have high ethical standards, while less
supply chains, the poll, commissioned by the Changing Markets
than a fifth would trust information on sustainability
Foundation and the Clean Clothes Campaign, stated. n
waste it’s recycling for Refibra. In 2019,
Americans seek transparency from clothing brands
Lenzing will begin offering Refibra made
ccording to a recent study, four
Lenzing ramps up recycling for Refibra
L
enzing is ramping up the amount of
with 10 per cent more post-industrial cotton, increasing the amount of waste recycled from
A
in five Americans believe clothing brands should provide information
on their environmental commitments and
20 per cent to 30 per cent. Lycra has made strides to improve performance of stretch technologies, and
the measures they are taking to minimize pollution in their supply chain.
advance both their comfort and sustainability
Around three quarters of the American
in denim. The company’s latest innovation,
public also believe that clothing brands
Lycra T400 with EcoMade technology,
should be responsible for what happens in the manufacturing
maintains the stretch, recovery and retention
process, and that they need to take measures to ensure clothes
characteristics of Lycra T400 fiber but with a sustainable
are produced in an environmentally friendly way. About half would be put off buying from a brand that does not pay workers a fair living wage. The majority of consumers are
twist. Lycra T400 with EcoMade
also willing to pay 2-5 per cent more for their clothing to allow
cent
factory workers to earn a fair living wage. These are among the
sustainable fibers. Fifty per
findings of a Ipsos MORI poll, carried out in the United States,
cent of the fiber is made
France, Germany, Italy, Poland, Spain and the UK.
comprises
68
per
from recycled PET and 18
American consumers want more information on working
per cent made from plant-
conditions in fashion supply chains and would be put off
based materials. The fiber
buying from brands that are not paying a fair living wage. Most
fits in nicely with brands
American consumers are skeptical about the credibility of
that have 2020 sustainability
information communicated by brands, with only a quarter of
goals to meet, and lives up to the performance
Americans saying they would trust the sustainability information
standards of its popular predecessor. n
provided by clothing brands themselves. US consumers make up the biggest apparel market worldwide. n
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APPAREL / reVieW
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APPAREL / REVIEW
A
round 700 international buyers, stores and retail chains from 62 countries and 300 agents attended the india international garment Fair, that was held from Jan 1618, 2019 at Expo Mart in Greater Noida.
latest collectioNs aNd iNNovatioNs oN display The three day fair, presented latest innovations in women’s wear, men’s wear, ki’ds wear, bags, fashion accessories etc. exhibitors included leading apparel companies from across india. it displayed the autumn/ Winter 2019-20 collections of european Union, Usa, middle east and other western markets.
atteNdaNce by distiNguished lumiNaries The fair was inaugurated by Union Textile minister, smriti irani, who was also the Chief guest. it was attended by other dignitaries including ajay Tamta, minister
of state for Textiles as the guest of honour; rahul mehta, Chairman, igFa; a shaktivel, Vice Chairman, aePC; Lalit Thukral, Vice Chairman, igFa and mohan sadhwani, executive Director, Cmai. irani inaugurated the fair by cutting the ribbon, lighting the lamp and the hand spinning the yarn on the charkha in the CFB area of iemL. n
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APPAREL / eVenTs
TEXWORLD / APPAREL SOURCING
Upcoming The Fairyland for Fashion in Paris to attract 1,800 exhibitors
T
he Fairyland for Fashion, the banner under which bi-annual Paris trade fairs held by messe Frankfurt France at the Le Bourget exhibition centre are grouped, is dedicated to materials, clothing and forward planning for textiles, clothing and accessories. The event includes: apparel sourcing, avantex, Leatherworld, shawls& scarves, Texworld and Texworld Denim Paris shows. They will be held from February 11-14, 2019 in Paris Le Bourget.
an absolute must for anyone involved in designing collections of clothing and accessories, The Fairyland for Fashion will feature over 1,800 exhibitors, producers from every continent, who will on average meet over 14,000 principals. The event will include lectures, round-table discussions, catwalks and specific itineraries for fabrics.
apparel sourciNg to see a wide raNge of rmg oN display apparel sourcing Paris, the biggest trade fair in europe for sourcing, comprises 600 clothing manufacturers from 17 countries. From basics to high-end, the fair covers the whole range of ready-to-wear for women, men and children, grouped by area of expertise in fashion clothing: knitwear, dressmaking, tailoring, sportswear, evening wear, made-to-measure, lingerie and swimwear, workwear, textile accessories, etc.
avaNtex, to showcase techNological iNNovatioNs avantex Paris is the first international trade fair dedicated to technological innovation and sustainable development in the fashion industry. Featuring 38
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AppArel / Events
And a dedicates Shawls and Scarves fair
exhibitors from nine countries, the fair brings together companies, from the design phase through to retail, to offer effective solutions for encouraging and shaping tomorrow’s fashion. Far more than just an exhibition, it is a real network bringing together brands, industries and research that share a similar determination to integrate fashion and technologies for the future and explore the challenges and prospects for tomorrow’s markets in a series of highly regarded lectures.
Leatherworld to display flexible materials
Shawls&Scarves Paris is the only international trade fair dedicated solely to scarves and shawls. It will feature headscarves, wraps, capes, ponchos, etc in materials like cashmere, wool, silk, cotton, linen, bamboo, etc, from entry level to very high end, both woven and knits. The fair will feature 33 exhibitors from 17 countries in September 2018. The Fairyland for Fashion, the French agency for Messe Frankfurt France, was established in Paris in 1953. The Messe Frankfurt France subsidiary was founded in
Featuring 58 exhibitors from seven countries, Leatherworld Paris is dedicated to flexible materials used in particular in certain branches of fashion such as leather goods, footwear, gloves and fur items. A vast range of fashion articles and accessories made of leather, fur and related materials that attest to a wealth of technical skills. In this domain, the finished product is certainly not overshadowed and stands its own among the other offers at the trade show, which is now attracting a growing number of retailers, in addition to buyers of fabrics or manufactured products.
2002 in order to acquire the Texworld trade fair. Since then, its portfolio has expanded with Apparel Sourcing Paris, Avantex Paris, Leatherworld Paris, Shawls&Scarves Paris and Texworld Denim Paris. The company is firmly rooted in the global fashion industry environment while actively promoting young design at the same time. Today, with 20 staff, a turnover of €26.2 million and 75 marketing agencies throughout the world, the company is in a position to organise every type of trade fair in France. In 2017, the company’s trade shows brought together around 3000 exhibitors from 21 countries and 30,000 visitors from 110 countries. n
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AppArel / events
Pitti Bimbo to be held in Italy
P
itti Bimbo will be held in Italy from January 17
Pitti Bimbo expects around 10,000 visitors.
to 19, 2019. This is a trade show dedicated
A new addition for the upcoming season
to children. The program will feature 553
is the launch of KidsLabs, a partnership
brands, of which 60 per cent are international. Among the brands that will exhibit at the
with museums that will offer children a chance to participate in workshops with the Science and Technology Foundation.
show, around 40 will be from France, including
A space dedicated to licensed products will also be part of the
Bonton, Arsène et les Pipelettes, Tartine et
trade show as the Bologna Licensing Trade Fair and the Bologna
Chocolat, Bleu comme Gris, luxury baby shoe
Children’s Book Fair which will feature around 20 franchises
brand Jolee Môme and Yves Salomon Enfant.
including National Geographic, Miffy, and Pokemon. n
Tommy Hilfiger’s next show to be held in Paris
Pure Origin London to showcase innovations and materials for AW21/SS22
F
ashion
festival
Pure London, Pure Origin
will
launch
its own forward trends catwalk
showcasing
key
innovations
looks,
and materials for AW21/
T
SS22. Pure Origin will
will be held from Feb. 25 to March 5, 2019. It
supply chain expo. Major players in the industry will showcase
will allow the label to show off the fruits of its
new technologies and emerging trends that will shape the
collaboration with American actress and singer,
future of fashion and help businesses to stay ahead of the curve
Zendaya. Tommy Hilfiger chose Paris for its next
in today’s fast-changing retail landscape. Offering a visual
show, following a string of previous events in
platform, the catwalk will showcase the latest trends for sourcing,
Shanghai, Milan, London, Los Angeles and New
sustainability and manufacturing including fabric, raw materials,
York. The brand will present a see-now-buy-now
apparel, footwear and accessories.
ommy Hilfiger’s next show will be held
be held from February
in Paris, on March 2, 2019 during the
10 to 12, 2019. This is
Paris Womenswear Fashion Week that
a manufacturing and
collection, in line with its current strategy.
Pure Origin will bring together over 200 exhibitors from 13
The event will showcase Tommy Hilfiger’s
countries to create a wide range of business and networking
latest creative collaboration. It will also
opportunities, new thinking and innovation. Garment and fabric
showcase the first pieces from the spring 2019
suppliers, denim and textile designers and technology brands
line ‘TommyXZendaya.’ All of the looks shown
attract buyers, sourcing, and technical personnel. With its own
on the catwalk will be available for sale after
seminar stage,
the show in over 70 countries, via the label’s
change-makers debating the future and how to make it
stores, partners and e-commerce store. n
sustainable and circular. n
Pure Origin features speakers and leading
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AppArel / Compliance
AAFA’s new guidelines for denim finishing facilities to create better industry
T
he American Apparel and Footwear
and contracted out by brands. They include afety protocols
Association (AAFA), through its Safety
for common techniques in denim finishing, like bleaching
in
or creating wear marks that a more general understanding
Denim
collaborated
Finishing with
Working
industry
Group,
professionals
and outside consultants to release a new
of workplace safety might not properly cover.
set of guidelines and best practices for
Those tapping into the denim
denim finishing facilities in December. These
safety guideline will find several
guidelines are expected to create a better
indicators for success, the least
industry for both workers and the brands they
of which is an increased level
represent.
of production and return on
The guidelines are specifically designed
investment for brands that should come as a result of fewer
for denim finishing facilities, giving facility
production accidents and employee illnesses. Brands will also
managers—most of which are independent
be able to attract better workers and better press.n
Oeko-Tex updates standards for use of chemicals in textiles and leather
O
eko-Tex has updated its standards for
The even more stringent requirements for residues in textile materials
chemical use in textiles and leather.
will result in an overall lower impact on the environment, workers and
These new regulations will come into
consumers. Standard 100 by Oeko-Tex is a worldwide consistent,
effect on April 1 after a three-month transition
independent testing and certification system for raw, semi-finished and
period.
finished textile products at all processing levels, as well as accessory
Important changes for companies that are part
materials used.
of Oeko-Tex’s various certification programs have
For over 25 years, Oeko-Tex’s strategy has not been to wait for
the substance benzene and four amine salts have
legislation but to be proactive in the field of consumer protection as
being included in the Standard 100 by Oeko-Tex
a pioneer. n
and Leather Standard by Oeko-Tex programs with limit values defined. The substance quinoline, which has been under observation by Oeko-Tex since 2018, is now also regulated with a limit value. Limit
values
have
been
made stricter for Standard 100 by
Oeko-Tex
(softeners),
for
phthalates
alkylphenols
and
alkylphenolethoxylates, as well for perfluorinated and polyfluorinated compounds.
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APPAREL / inFrasTrUCTUre
India creates a export promotion cell for a MSME enterprises
a
n export promotion cell has been created
join the Trade Receivables e-Discounting System
to create a sustainable ecosystem for
so that MSMEs don’t face troubles in cash flow.
micro, small and medium enterprises.
GST-registered enterprises will get a 2 per cent rebate on an
The cell will evaluate the readiness of these
incremental loan of up to a crore. The interest subvention on pre
enterprises to export their products and services,
and post shipment credit for exports by micro, small and medium
identify areas where improvements are required
enterprises has been increased from three per cent to five per cent.
in order to be able to export effectively and
A Rs 6,000 crore(US$ 852 million) package has been announced
efficiently and attempt at integrating the
for technological upgradation of these enterprises. About 20,000 hubs
enterprises into the global value chain.
and 100 tool rooms will be developed around the country for this.
In addition all companies with a turnover of more than Rs 500 crore (US$ 71 million) have to
Retail sector likely to add 39m sq ft space by 2022
Mandatory sourcing by PSUs from small enterprises has been increased to 25 per cent from the previous limit of 20 per cent. n
Center for excellence for research and training opens in Tirupur
a
center for excellence has been set up in Tirupur by the Apparel,
Made-ups,
and
Home Furnishing Sector Skill Council. The center to take up research and training in apparel production The center will be involved in
a
research in apparel manufacturing technology and processes,
to add about 39 million sq ft of space in
units. It has the capacity to train about 30 members for a course
four years to the end of 2022, of which 71 per
and accommodate 100 candidates at a time. The aim is to give
cent will be in metros and tier-I cities. Ahmedabad,
candidates the experience and exposure to best practices and
Bhubaneswar, Ranchi, Kochi, Lucknow, Surat and
skills in the industry. The facility has machinery for the entire apparel
Amritsar are among the metros and tier-I cities
production process, including automatic cutting machines, sewing
where the next chapter of growth is likely to unfold.
machines, embroidery machines, and finishing equipment. There is
ccording to Anarock Property Consultants.,
conducting short-term management development programs,
India’s organised retail sector is expected
supervising development programs for those employed in apparel
The organised retail segment is projected to
machinery for made-ups and home furnishings and trainings will be
grow to 19 per cent of the overall retail market
conducted for personnel working in these units too. It will function on
by 2020, up from 4 per cent 10 years ago,
a paid model, with industries paying for the training and courses will
boosted by rapid urbanisation, digitisation, rising
be conduct by the center’s own resource personnel. So far some
disposable incomes and lifestyle changes.
6.5 lakh candidates have been trained across the country, covering
Over the past two decades, the Indian retail market
jobs such as tailoring, ironing and cutting. The plan is to train another
has transformed from traditional shops to large multi-
eight lakh workers this year. Another such center will be opened in
format stores in malls offering a global experience and
New Delhi. While the one at Tirupur is mainly for knitted products, the
on to the highly tech-driven ecommerce model.n
one in New Delhi will be for woven products. n
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APPAREL / nOTiFiCaTiOns
Ministry Notification Sub.: List of HSN Codes of Technical textile DGFT in its notification number 54/2015-2020 dated 15 January, 2019 have notified the list of 207 technical textiles items. In the list of 207 products there are 174 products are from the textile value chain, with 12 products which fall under rmg category. For Full Notification: http://dgft.gov.in/sites/default/files/ Notification-54%20dt-15.01.2019%28E%29.pdf
Sub.: Interest Equalization Scheme on Pre and Post Shipment Rupee Export Credit included Merchant Exporters RBI in its notification no. RBI/2018-19/107 dated 11 January, 2019 stated that it has been decided by the government of india to include merchant exporters also, w.e.f. January 2, 2019, under the ongoing interest equalization scheme for Pre and Post shipment rupee export Credit and allow them interest equalization at the rate of 3% on credit for export of products covered under 416 tariff lines identified under the Scheme. For Full Notification: https://www.rbi.org.in/Scripts/ NotificationUser.aspx?Id=11453&Mode=0
Subject: Amendment in Para 4.14 and 4.16 (ii) of the Foreign Trade Policy 2015-20 DGFT in it Notification No. 53/2015-20 dated 10.01.2019 has extended the exemption from integrated Tax and compensation cess for import against advance authorizations upto 31.03.2019 For Full Notification: http://dgft.gov.in/sites/default/files/ Notification%20No.%2053%20English%2010-01-2019_0.pdf
Sub.: Mandatory recording of information on DGFT website about transfer of MEIS scrips issuesd from 14.01.2019 onwards (for EDI ports only) DgFT in its Trade notice no. 42/2015-2020 dated 11 January, 2019 has stated that in order to improve ease of doing business, it is being planned to discontinue issue of meis scrips in physical form. For Full Notification & Procedures: http://dgft.gov.in/sites/ default/files/Trade%20Notice%20No.%2042%20dt.%2011.01.2019_0.pdf
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APPAREL / gsT UPDaTe
1. compositioN scheme Section 10 of CGST Act 2017 stated that a registered person, whose aggregate turnover in the preceding financial year did not exceed, - rs. 1 Cr. in normal category of states including Uttarakhand and Jammu & Kashmir - Rs. 75 lacs for special category states (Sikkim, Assam, Arunachal Pradesh, Tripura, nagaland, manipur, meghalaya, mizoram, himachal Pradesh), may opt to pay tax under composition scheme.
s.No.
category of registered presoN
rate of tax
1.
manufacturers
1% of turnover
2.
restaurant services
5% of turnover
3.
traders or any other supplier eligible for composition levy er supplier eligible for composition levy
1% of taxable turnover
Turnover of all businesses with same Pan has to be added up to calculate turnover for the purpose of composition scheme. Composition scheme was not eligible for following categories of supplier: • Supplier of service other than restaurant owners(Serving foods and nonalcoholic drinks) • Supplier of non-taxable goods • If the person in engage in the inter-state supply/export of goods/supply from domestic tariff area to seZ unit • Supplier supplying goods through E-commerce operator, who is eligible to collect TCs • Supplier of tobacco, pan masala, and ice cream and other edible items containing cocoa, • Casual taxable person or a non-resident taxable person. Note: There is no restriction procuring goods from inter-state suppliers/imports for composition dealers in latest 32nd GST Council meeting held on 10th January 2019, following amendments have been made which are effective from 1st April 2019.
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APPAREL / gsT UPDaTe
For Supplier of Goods: - annual Turnover limit for availing composition scheme - in the normal category of states including Uttarakhand & Jammu & Kashmir has been increased from Rs 1 Cr. to Rs. 1.5 Cr. - Special category states would have to decide within a week about their turnover limit in their respective states. For Supplier of Services: - a composition scheme shall be made available for supplier of services (or mixed supplies) with a tax rate of 6% (3% CgsT +3% sgsT) having an annual Turnover in the preceding Financial Year up to rs. 50 lakhs. The said scheme shall be applicable to both service providers as well as supplier of goods & services. after this meeting, now service providers as well as supplier of goods & services also eligible for composition scheme, but exporters or supplier to seZ are not eligible. however, import of goods or services does not restrict the eligibility for composition scheme. NoteThey would be liable to file one Annual Return with Quarterly Payment of Taxes (along with a simple Declaration) Conditions to be satisďŹ ed by a composition dealer: 1. not allowed to avail input tax credit of gsT on purchases. 2. a Composition Dealer has to issue Bill of Supply. They cannot issue a tax invoice. 3. The taxable person is required to furnish gsTr-4 on a quarterly basis and an annual return in FOrm gsTr-9a. 4. not allowed to collect composition tax from the buyer. 5. Composition scheme if opted will apply for all businesses associated with this Pan.
2. exemptioN threshold limit another major amendment has been made in the threshold limit for exemption. earlier it was rs. 20 lacs in the normal category of states and rs. 10 lacs for special category of states. now, there would be two Threshold Limits for exemption from registration and Payment of gsT - For the suppliers of Goods i.e. Rs 40 lakhs and Rs 20 lakhs. states would have an option to decide about one of the limits within a weeks’ time. - For Service Providers would continue to be Rs 20 lakhs in case of normal states and in case of Special Category States at Rs 10 lakhs. This amendment also applicable from 01st april 2019
3. reveNue mobiliZatioN for Natural calamities gsT Council approved Levy of Cess on Intra-State supply of goods and services within the state of Kerala at a rate not exceeding 1% for a period not exceeding 2 years.
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AppArel / aepc event calendar
CALENDAR OF EVENTS -
1
February, 2019, USA
2
2019
March, 2019, Uruguay & Chile
Sourcing at Magic, Las Vegas, USA
3
July, 2019, HONG KONG
Buyer Seller Meet at Uruguay & Chile
4
July, 2019, JAPAN
Hong Kong Fashion Week at Hong Kong
5
August, 2019, USA
India Trend Fair (ITF) at Tokyo, Japan
6
September, 2019, France
Sourcing at Magic, Las Vegas, USA
7
October, 2019, SPAIN
WHO’s Next, Paris – France
8
November, 2019, AUSTRALIa
India Apparel & Accessories fair at Madrid, Spain
International Sourcing Expo Australia
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