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Business of Textiles
The textile industry with its vast manufacturing spectrum from fibres to yarns, weaving, fabrics finishing to garmenting has a long and complex supply chain and production process. The industry is fundamentally and universally similar across the world. But what is bringing a new dimension is the new radical technological revolution through Textile 4.0 where blockchain, artificial intelligence, big data and robotics are the game changers. It was in the eighties, that the textile industry started shifting to Asia with the western world focusing more on high technology products and services. Textile industry offered everything that Asian countries and economies were desperately looking for in their quest for industrialization -- job opportunities for a large population, exports with earnings in dollars etc. And now, that Asia has already made a mark as the largest base for textile and clothing manufacturing, meeting 70 per cent of global demand for clothes, Textile 4.0 enters like a doubled edged sword. While the industry has not even employed conventionally known cutting edge technology -- enter Textile 4.0, these are terms the Asian industry is still to hear and understand fully. Keeping abreast with new technologies, need investment. And for the industry to invest there has to be confidence. The new technological revolution is bringing back manufacturing to the advanced world. For example, maximum number of Shima Seiki, whole garment machines and Digital Textile Printing machines are installed in Italy. Indeed the concept of micro factories and robotics run factories belongs to the advanced world. Moreover, nearsourcing will catch up fast, suggests the latest Mckinsey-Business of Fashion and this will change the global trade world order. Indian textile industry like any other big textile country is living in a globalised world, which now fears to be engulfed into a lesser open and more protected world. The future will belong to us, only we revive our confidence in this industry and deliberate upon strategies to REJUVENATE & REVIVE CONFIDENCE in textiles. This issue of POWER TEXTILES addresses all such pertinent subjects being decoded at the maiden CEO Conclave in Hyderabad, on February 19 and 20, 2019. Pleasure reading!
Published and Edited by Sanjay Chawla at: 38/314, Unnat Nagar 4, Off M. G. Road, MHADA Colony, Goregaon (W), Mumbai 400 062.
Cheers! Sanjay
Content Cotton Global cotton import-export to see sudden shift amid US-China trade war 14
Trade Treaties Trade treaties to expand investment relations across the world 46
Fibre play New innovations rock the global fiber market
Investments Increasing investments, expansion boost Indian textiles growth 49
18
Trends Streetwear shapes global fashion, activewear takes over casual wardrobe 24
Tech-trends Fashion takes the digital route
Trade war US-China stirs up the world trade order
28
Markets China emerges stronger than the US as world’s largest fashion market 58
Sourcing China losing dominance, other sourcing destinations emerge in the horizon 34
Denim Denim makes a splash with innovations, new trends and sustainability 60
Sourcing Shorter lead times, reduced costs make nearshoring popular
Home textiles Global home textiles market clocks in robust growth
66
Sustainability Industry on the green challenge as sustainability gains ground
68
40
Supply chains Regional supply chains to shape future textiles and apparel growth 44
Power Textiles | 01
54
cotton
Global cotton
import-export to see sudden shift amid US-China trade war While global cotton production expected to be lower this season, China will again emerge the biggest cotton importer in the world. Besides feeling the impact of ongoing tariff war, overall, cotton prices are expected to remain high or even increase globally
• China to emerge largest cotton importer • China, India, the US, estimate cotton output may decrease in 2018-19 season • Supply is likely to be tight in 2018-19 season • International cotton prices are likely to remain high or even increase • US cotton the most preferred among mills across the world • India’s cotton production to grow 7.25 per cent this year • Global cotton processing market is projected to reach $72.6 billion by 2023 • The Asia Pacific will be the fastest-growing regional market
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cotton
Experts forecast by 2019-20, China will become a major cotton importer, importing 10 to 15 million bales a year. The country’s current volume was around 5 million bales in 2017-18. Once the world’s top cotton importer, China’s imports shrank from more than 5 million tons in 2011-12 to around one million tons in 2017, due to its efforts to reduce stockpiles of the fibre.
because the pool of exportable supply is limited once you move beyond the US. If the US does prove to be unaffordable for Chinese mills with the tariffs, the cotton that is redirected to China from other sources (e.g., India, Brazil) should open up demand for US cotton in other import markets (e.g., Vietnam, Bangladesh) where cotton from non-US exports could have otherwise gone.
China’s increased cotton imports to impact global market
As per figures, over the 2012-13 to 2017-18 period, China’s share of US exports dropped from roughly 40 per cent to between 10 per cent and 15 per cent. The implied tightness in exportable supply suggests upward pressure on prices. Collective stocks for the world
The three largest cotton producers in the world viz. China, India and the US, estimate cotton output may decrease in 2018-19 season. Supply is likely to be relatively tight in 2018-19 season. International cotton prices are likely to remain high or even increase. Experts say, the ongoing tariff war between the US and China would cotton import and export. As Jon Devine, Senior Economist, Cotton Incorporated points out, China’s cotton imports have risen and are expected to continue climbing over the next several years now that its government-controlled cotton stockpile has dwindled and because it can’t meet demand with its domestic cotton supply.
Cotton faces tariff barriers With increased tension between the US and China, it remains to be seen how China will satiate its supply of cotton. In the 201718 crop year the US should export 16.2 million bales. In comparison, the next largest exporter is India at 5.0 million bales. It would take the sum of India, plus the next six largest shippers to equal the volume that the US ships. If China increases its imports by 5-10 million bales over the next several years, it is hard to see how that would not benefit the US
Power Textiles | 15
outside the US are forecast to reach a record this summer, and collective volume will serve as a buffer against a rising tide of Chinese import demand. In terms of supply chain reactions, if the tariffs do remain in place, the flow of cotton through Vietnam could be expected to continue to be profitable.
US cotton most preferred by mills globally Exporting three times more cotton than its closest competitor, the United States achieved a 40 per cent share of cotton fiber exports in its latest marketing year. Exporting three times more cotton than its closest
cotton
Over one-third of the cotton purchased in the past year was reportedly from the US. This is nearly three times that of any other country. competitor, the United States achieved a 40 per cent share of cotton fiber exports in its latest marketing year. US cotton emerged on top because of positive factors in the decision to purchase cotton.
the topmost cotton producing state with a production of 2.05 million bales of cotton. The central zone produced 20.95 million bales of cotton with Gujarat being the topmost cotton producing state. The southern part produced 9.9 million bales, a growth of over 10 per cent over last season. Out of the four states, Telangana produced the most cotton with 53 per cent share in the zone and 14 per cent in the country’s total production.
Over 50 per cent respondents in a global survey overwhelmingly said US cotton is the most preferred by both mills and manufacturers. Over one-third of the cotton
After three years of continuous decline, India finally witnessed a 6.4 per cent growth in cotton exports in 2017-18. The commodity gained 19 per cent in total textile and clothing exports. Bangladesh remains the largest
purchased in the past year was reportedly from the US. This is nearly three times that of any other country. Respondents expressed great satisfaction about US cotton purchases with over 90 per cent planning to recommend US cotton to their customers.
importer of Indian cotton as demand from China continued to drop over the last fiscal year. Cotton export to Bangladesh in 2017-18, was valued at $1816.21 million with growth of 13.8 per cent over previous fiscal year
India’s cotton production to grow 7.25 per cent this year As per the Cotton Advisory Board (CAB), cotton production in India during 2017-18 touched 37 million bales, growing by 7.25 per cent over the previous fiscal year. The northern zone produced 4.6 million bales of cotton during 2016-17, registering a growth of 28.67 per cent. Haryana emerged as
New innovations spur growth Meanwhile, the introduction of Bt cotton in 2002 also resulted in doubling cotton production in the country. In 2017, India was ranked 32nd among countries in the ranking for highest cotton yield globally. Of the 31 countries ranked above India, only 10 use genetically modified cotton. Fertiliser use for cotton rose 128 per cent from 118 kg/ha in 2005-06 when Bt Cotton’s proportion in
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overall cotton was 11.7 per cent to 270 kg/ ha in 2015-16 when Bt Cotton accounted for 83.33 per cent of India’s cotton.
Rise in cotton processing Global cotton processing market, fuelled by the growth in cotton production, reached $59.7 billion in 2018. The market is projected to reach $72.6 billion by 2023. The Asia Pacific will be the fastest-growing regional market with countries like India and China, emerging as leading players due to the increasing cotton production. Rising number of accidents and chronic diseases will increase the consumption of processed
cotton and cotton bandages globally. Based on type, the spinning segment is projected to be the fastest-growing during the forecast period. High productivity provided by automatic machines in less time made the automatic segment the largest shareholder in the cotton processing ginning equipment market in 2018. Installing, fully automated processing equipment led to accurate processing, quick and reliable production processes, optimumutilisation of time, reduced labor costs, and controlled operations. With the availability of fully automated and integrated processing lines, operational efficiencies and proper control of production processes were achieved.
Fibre play
New innovations rock the global fibre market
Demand for high quality garments has spurred global demand for high performance, sustainable fibers. This has given a huge boost to the fiber market from cotton to wool, blended fibers even fur. Innovation is the core that drives the market forward • Around 63 per cent consumers view fibre content as being important in their apparels • Cotton is soon set to become the latest performance player • Wool’s inherent properties to drive its future growth • Blended fibres market has emerged as a niche business • It caters to some most pivotal verticals • Major growth driver for spandex will be the apparel and textile industry • Brands have started focusing on recycled and reused fibers • Farmed furs are the mainstay of the fur trade
Bruce Atherley, Executive Director, Cotton Council International (CCI) recently said disposable, fast fashion has made a big contribution to the rise of synthetic, man-made fibres that are cheap to manufacture, though not easily recycled, leaving a damaging footprint on the environment. Research also suggests that clothes made from synthetic fibres, such as polyester and acrylic, may damage the environment throughout their usage, by releasing hundreds of thousands of tiny synthetic particles in every wash. The good news is that increased level of awareness of this unsustainable product lifecycle has created a desire among brands, retailers and consumers to return to higher quality garments that are less damaging and retain their value for longer. Owing to this, there has been a greater demand for natural fibres, such as US cotton.
Cotton becomes performance
latest player
Research commissioned by Cotton Incorporated in the US, UK, India, Germany, Italy, Mexico and China in 2017 revealed consumers responded favourably to the idea
Power Textiles | 18
that cotton could wick moisture better than synthetics. Some 61 per cent of participants said that ‘new and innovative cotton products can now be made to evaporate sweat more quickly, making them a superior choice in athletic wear’. This clearly shows that consumers are ready and willing to hear new ideas in technology, fashion and blends. With new developments ensuring a higher level of performance cotton is soon set to become the latest performance player in the market. As a Cotton Incorported Lifestyle Monitor Survey mandates, around 63 per cent consumers view fibre content as being important in their apparel purchase decisions. They feel a product made of cotton is the most comfortable, sustainable, softest, of highest quality and more versatile. Shoppers also make a point of looking for cotton fibre when shopping for apparel gifts during the holidays due to its comfort and easy care. However, conventional cotton can’t compete with synthetic garments in the sports and outdoor market as it cannot manage moisture across its surface on being wet. This is now being addressed, with R&D focused on spinning technology and innovative finishes. Another allegation made by the advocates
Fibre play
of synthetics is that cotton isn’t as environmentally friendly as it appears and requires massive amount of water, chemicals and arable land to grow. The cotton industry is responding to this with responsible and sustainable measures, with Cotton USA and BCI (Better Cotton Initiative) making the biggest moves, especially with traceability. However, besides cotton the introduction of new environment-friendly materials ranging from recycled polyester, upcycled and regenerated fabrics, recycled cotton and cellulosic fibres have fastracked developments in fibre and fabrics.
Growing demand for wool There is a growing acceptance for wool in activewear and the properties associated with it. Be its softness and odour-resisting properties, brands like Adidas and Lululemon are making sure the trend catches on. Added to this, wool’s inherent properties such as breathability and moisture-wicking capabilities are slated to drive the growth of the material. This trend was highlighted at the recent ISPO trade fair in Munich. Norwegian brand Devold won an ISPO Award 2018 for its Tuvegga Sport Air base layer. The reversible two-sided functional base layer is designed for highperformance activities and is made from 100 per cent Merino wool.
the sportswear brand of Norwegian alpine ski racer Aksel Lund Svindal, an Olympic gold medallist, uses wool in his sportswear brand. The brand aims to make functional clothing that looks and feels fantastic and at the same time causes no harm to the planet. In fact, the recent edition of Milano Unica Winter 2019-20 offered a sneak peek into opulent designs combined with a strong focus on sustainability in wool. The trade show highlighted a vibrant dash of colours including reds, browns and golds. Despite rising wool prices, exhibitors reported strong demand for the fibre, since prices of other raw materials are also increasing, some at an erratic rate. The advent of technical wool has made a big impact. Reda Active and Zegna’s technical lines have raised the fibre’s profile further. The intrinsic value and added performance quality of wool is promoted in various ways across the board with various qualities of thermoregulation, crease resistance, breathability, and waterproofing for use in the travel suit.
Blended fibres market in recent years has emerged as a niche business catering to some of most pivotal verticals. The industry encompasses companies attempting to recreate fibres that would have minimal impact on the environment. A recent instance of this is the launch of EcoVero, a viscose fibre with low environment impact.
In India, the blended fiber yarn market, last year, witnessed a couple of rather pivotal incidences that would have a commendable influence on future Indian market trends in the years to come. In India, the blended fibre yarn market, last year, witnessed a couple of rather pivotal incidences that would have a commendable influence on future Indian market trends in the years to come. These include: Sutlej Textiles and Industries (STIL), one of most prominent
Wool’s natural properties make it ideal for nextto-skin items such as underwear, base layers,
Wool’s natural properties make it ideal for next-toskin items such as underwear, base layers, socks or T-shirts. One of the most important is breathability. Wool can absorb large quantities of water vapour – twice as much as cotton and 30 times as much as polyester – and allow it to evaporate. socks or T-shirts. One of the most important is breathability. Wool can absorb large quantities of water vapour – twice as much as cotton and 30 times as much as polyester – and allow it to evaporate. Greater Than A,
Blended fibres sees robust
market growth
A business intelligence report by Global Market Insights titled ‘Blended Fibres Market Research Report’ predicts the blended fibres market in the Asia Pacific region will be over nine million ton by 2024. This is driven by growing demand for attractive and corrosion resistant home furnishing products. Surge in demand for handcrafted products coupled with home décor including wall hangings, bed linen products and rugs & carpets will further boost demand.
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participants of blended fibres market, recently acquired the design and distribution unit and the brand name of the Pennsylvania-based American Silk Mills (ASM). This acquisition is likely to strengthen Sutlej’s home textiles portfolio. Welspun launched its newest collection at Heimtextil India, including quilts, towels, duvet covers, bed sheets, curtains, carpets, rugs, bedspreads, bathrobes, and bath mats. Welspun’s initiative is also expected to influence other leaders in the home textiles and interior decor sectors to launch their fabric collections and conform to latest consumer demands.
Fibre play
Meanwhile the global spandex market estimated at over 760 kilo ton in 2015, is likely to cross 1,550 kilo ton by 2023. It is likely to grow at a CAGR of over 8 per cent from 2016 to 2023. China dominated the AsiaPacific market in 2015, accounting for 60 per cent of the total volume. Major growth driver for the spandex market will be the apparel and textile industry which uses spandex in manufacturing leggings, gloves, cycling jerseys and competitive swimwear et al. Spandex is also used to provide stretchability to garments used in active sports. Factors such as superior elasticity, regaining original shape, durability, lightweight, resistance to UV light boost its demand in the global market. Invista, under Lycra, has introduced bio based spandex for apparels. Bio spandex contains approximately 70 per cent of the sustainable feedstock made out of renewable butanediol from dextrose which is derived from corn. The company markets this as a specialty product and sells it at a premium rate.
Exponential
growth
Lyocell
fibre
market
As new research report by the market research and strategy consulting firm, Global Market Insights shows, Lyocel fibre market will reach over $1.5 billion by 2024. Fashion trends have changed rapidly over the past few years and will continue to do so in the coming years, which will drive industry growth. Modern technology and fibres have been developed which have
In January 2018, Unifi introduced its Champions of Sustainability Award, which is given to 25 brand and retail partners that used 10 million or more bottles, and 15 textile partners use 50 million or more bottles, through the use of Repreve fiber. escalated the use of better quality materials and has driven lyocell fibre market demand. Brands have started focusing on fibres that can be recycled and reused after the end of
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a product’s lifecycle. Petrochemical fibres have been substituted by cellulosic manmade fibres which have spurred product adoption in manufacturing processes. The pressure on synthetic fibre manufacturers has increased due to increasing demand for naturally derived fibres. The product finds its application in various segments such as baby diapers, home textiles, apparels, automotive filters, surgical products and many more. The healthcare and wound care textiles segment is likely to grow at a robust pace, owing to the evolving technologies for recovery of surgical wounds, thus propelling lyocell fibre market. Then there are the new age fibres materials ranging from recycled polyester, upcycled and regenerated fabrics, recycled cotton and cellulosic fibres.
From plastic to polyester One of most striking examples is the development and widespread commercial usage of Unifi’s Repreve polyester fibre
Fibre play
made from recycled post-consumer plastic water bottles. Two years ago, Unifi opened a bottle processing facility in Reidsville, N.C., to convert plastic bottles into polyester fibre and yarn, a year later it expanded its Repreve Recycling Center in Yadkinville, N.C. That gave the company an annual capacity to produce up to 60 million pounds of Repreve and other premier value-added products. In January 2018, Unifi introduced its Champions of Sustainability Award, which is given to 25 brand and retail partners that used 10 million or more bottles, and 15 textile partners use 50 million or more bottles, through the use of Repreve fibre.
Fibres
for
insulation
Polartec recently introduced the upgraded Polartec Power Fill insulation made from 100 per cent post-consumer recycled (PCR) materials. It is a warm, lightweight package insulation that is hydrophobic, fast-drying and highly compressible. It’s made of proprietary hollow fibres bonded together through a process that reduces environmental impact, while simultaneously providing superior insulating properties, durability and hand. Polartec has now upcycled more than 1 billion post-consumer plastic bottles into hundreds of fabric styles and category-creating platforms.
Commercial fibres from
recycled
materials
Development at Lenzing says,
Tencel
with Refibra technology has been adopted by six brands: Country Road, Patagonia, Our of the Woods, Reformation, Marco Polo and Mara Hoffman, and four more brands are expected to adopt the fibre, which substitutes traditional Tencel in the fabric construction. Refibra is made using the closed-loop Tencel lyocell production process and is the only commercially available fibre made from recycled cotton and wood pulp. Lenzing has also expanded the production of its Ecovero brand of viscose fibres to its Lenzing Nanjing Fibres facility in Nanjing, China. Ecovero, a fibre derived from sustainable wood pulp from certified and controlled sources, has been produced in Lenzing’s Austrian facility since it was launched this past Fall, and since then demand has been strong, which prompted plans to increase production capabilities to accommodate it.
Fur industry witnessing a boom globally International Fur Federation (IFF) study estimates global fur retail at around $40 billion, largely due to the sustained demand in Asian markets, including the
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Chinese mainland, Japan and South Korea. Meanwhile, challenges such as volatile pelt prices owing to the slow recovery in demand in excess of stock depletion remain headaches to fur farmers and traders.
International Fur Federation (IFF) study estimates global fur retail at around $40 billion, largely due to the sustained demand in Asian markets, including the Chinese mainland, Japan and South Korea. Reflecting a general preference among designers such as Marc Jacobs, Mulberry and Balenciaga in the luxury goods sector, fur continues to be a major design story in fashion shows all over the world. Farmed furs are the mainstay of the fur trade, accounting for some 85 per cent of the industry turnover according to IFTF. The most common farmed fur-bearing animals are minks and foxes. Most fur farming takes place in Denmark, followed by China, the Netherlands, the Baltic States and the US. The majority of raw skins produced by fur farmers and trappers are sold through modern international auction houses, often located close to producing areas. The world’s largest fur auction houses are in Copenhagen, Helsinki, St. Petersburg, Seattle and Toronto.
trends
Streetwear shapes global fashion, activewear takes over casual wardrobe
Streetwear has become the new urban uniform for the millennial consumer across the globe. The trend has given rise to numerous brands/manufacturers who create their own lines or produce fakes. What’s more even luxe brands like Gucci and Burberry have jumped into the fray with their own collections • Indian textile industry attracted FDI worth $2.97 billion from April 2000 to June 2018 • Textile ministry earmarked Rs 690 crore for setting up
21 RMG manufacturing units in seven states • Government needs to focus on regional clusters, technology upgradation and skill development subsidies,
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which benefit all producers • India needs to end export subsidy for the textiles sector by 2018
trends
Forecasting firm Trendalytics says the evolution of streetwear from its start as a 1970’s California social movement defined by the laidback surf style of Shawn Stussy, the founder of Stüssy, into a mainstream global category estimated to be valued at $309 billion. That evolution has been fuelled by influencers—be it celebrities, athletes or the masterminds behind hype machine brands like Ronnie Kith and Virgil Abloh and the prevalence of social media as a branding tool for both brands and individuals. According to the firm, digital natives with significant spending power, the millennial and Gen Z consumers have played an integral part in driving the growth of streetwear. The hunt continues for the most Instagrammable products, and consumers looking for unique and exclusive items are willing to pay.
are quite fast in producing fakes by painting jean jackets, scribbling on white sneakers and making spoofs of popular logos. Iceland has all the vintage look and feel. Classic skate brands like Thrasher and Stüassy are paired with retro furry jackets and sweaters. In Nigeria, streetwear is a blend of Western fashion like jeans, T-shirts and Vans, and native elements like brightly colored and patterned cotton textiles. In South Korea and Mexico, they have punk and rock undertones. Combat boots, leather jackets and piercings make up streetwear in Korea, while Mexico skews toward goth pieces, logo T-shirts and hats. Meanwhile, streetwear in the United Arab Emirates reflects hip-hop’s affinity for luxury brands. The report named side bags, snapbacks and colored sunglasses as key items.
Streetwear an urban uniform Social media and influencer
Today, streetwear has become the urban uniform for people in New York, Tokyo, London and more. A new breed of cities are emerging which is lifting the growth of streetwear globally. Kazakhstan, companies
In such a burgeoning growth, social media has a major role to play. Instead of relying on endorsed posts, important streetwear labels like Vetements, Bape and Palace
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Skateboards saw the most engagement from their own brand postings, Trendalytics said. The report highlighted that streetwear brands like Fear of God and Undefeated received nearly four-times the social actions per mentioned post than Adidas for the last year. While millennial celebrities like Zayn Malik, The Weeknd and Ansel Elgort have the highest total social post engagement from their branded posts. Trendalytics said top influencers gaining social buzz include surfers Laura Enever and Kelly Slater, each capturing more than 10-times the engagement per mentioned post than Kanye West.
A luxury touch to streetwear Trendalytics stated that ’80s artist JeanMichel Basquiat was known for combining high and low aesthetics by pairing streetwear and thrift store finds with formal wear, a style that still inspires streetwear influencers like Jay-Z and Kanye West. Meanwhile, Japanese artist Takashi Murakami has a developed new fan bases through his longrunning and colorful collaborations with
trends
Artist Takashi Murakami has a developed new fan bases through his long-running and colorful collaborations with Louis Vuitton and subsequent artwork collaborations with artists like Kanye West and Kid Cudi. The artist is also working with streetwear labels like Billionaire Boys Club. Louis Vuitton and subsequent artwork collaborations with artists like Kanye West and Kid Cudi. The artist is also working with streetwear labels like Billionaire Boys Club.
young consumer has grown up on limited run, high/low collaborations between luxury designers and fast-fashion retailers. This lending of a hint of luxury to streetwear offers a sense of achievement to shoppers without hurting the designers’ names. Collaborative streetwear operates in much the same way.
The market for streetwear, despite the advent of new players, luxury collaborations and high-end designers, is still going strong. In fact, it may take quite a long time before the market, with so many crossovers and creative licenses, reaches its zenith. Brands like Nike and others continue to drive demand by producing limited quantities.
The impact of streetwear on luxury cannot be understated and that influence is poised to grow as the spending power of streetwear-loving millennials surpasses older generations. Luxury brands are prepping up for this shift by attracting young designers with streetwear roots.
Growing popularity of active wear / athleisure
Sneakers have become the new ‘It’ bag
Katie Smith, Retail Analyst and Insights Director, Edited points out the shift towards more comfortable and functional clothing led to an increase in activewear as a trend. According to the Cotton Council International & Cotton Incorporated’s activewear study, about 3 out of 5 consumers have adopted activewear as their new casual wardrobe. Additionally, 90 per cent consumers wear activewear for purposes other than exercise. And 66 per cent consider athleisure as a more casual way of dressing that will be around for a while. A survey by Cotton Incorported Lifestyle Monitor Survey reveals nearly 3 out of 5 consumers prefer cotton activewear for athleisure activities like running errands or
90 per cent consumers wear activewear for purposes other than exercise. And 66 per cent consider athleisure as a more casual way of dressing that will be around for a while. hanging out at home. A number of brands already incorporate a significant amount of cotton into their athleisure/streetwear offerings. For instance in the Fall/Winter collection of streetwear favorites like cotton tees and sweatshirts are joined by denim, a cotton corduroy shirt with flannel hood, printed and oxford button-front cotton shirts, and cotton twill shirts and pants. As per the Monitor Survey, 9 of 10 consumers (92 per cent) believe better quality garments are made from natural fibers like cotton. And almost two-thirds of these are willing to pay more for natural fibers like cotton.
Luxury brands like Gucci and Burberry are jumping onto the streetwear bandwagon; while other labels are bringing streetwear designers to their brand. Mixing of high and low brands and price points might seem like an illusion but it’s been done before to great effect. Today’s
and brands are leveraging their popularity to appeal to the affluent, pro-consignment consumer. In appealing to millennials who came of age during the Great Recession, luxury is able to channel the appeal of appreciation, which they had already mastered with handbags, to sneakers.
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While straight up streetwear often doesn’t cost much, it can be difficult to obtain, requiring waiting on lines for in-store purchasing, or paying attention to social media to plan for the next drops. Luxury labels offer streetwear both because that’s what consumer want to wear and it increases recognition among young consumers. Playing a role in every facet of the industry, streetwear is constantly evolving and shaping the world of fashion.
Trade war
US-China
stirs up the world trade order The ripple effect of the US and China tariff war is being felt across the globe and most sectors including apparel and textiles. While China has faced the brunt, smaller countries like Vietnam, Cambodia and Bangladesh stand to gain as manufacturing shifts to these countries • US-China tariff war has had global ramifications • Factory owners in China are already shifting production to other developing countries • Bangladesh, Cambodia and Vietnam have emerged winners • Retail prices could rise up to offset a 10 per cent tariff • If talks fail on March 1 the US plans to increase tariffs on Chinese goods • US trade scenario has become a challenge • USMCA still to be ratified by US Senate
When President Donald Trump brought up the topic of trade in his State of the Union address recently, he asked Congress to approve something called the “United States Reciprocal Trade Act” — a bill many Americans have probably never heard of. This particular piece of legislation is the president’s latest pet project on trade. While it sounds pretty innocuous, the legislation would give broad powers to the president to impose tariffs on foreign imports. Or as Trump said in his speech: “If another country places an unfair tariff on an American product, we can charge them the exact same tariff on the same product that they sell to us.” Meanwhile the US plans to increase tariffs on Chinese goods if the two sides fail to make progress on a trade deal by March 1. The US and China are locked in a damaging trade dispute that has seen both sides levy tariffs on billions of dollars worth of one another’s goods. In December, both countries agreed to hold off on new tariffs for 90 days to allow for talks.
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The US and China have a deadline of March 1 to strike a deal, or the US has said it will increase tariff rates on $200bn worth of Chinese goods from 10 per cent to 25 per cent. With the Trump administration imposing tariffs on a host of foreign-made goods, US trade scenario has become a challenge. Earlier it was China, and then Canada, Mexico and EU were in the radar. By doing this, Trump administration claims they want to make trade fair and stop the rest of the world from taking advantage of the US and hurting American industry.
Shakingupglobaltradedynamics Trump stirred the entire trade dynamics globally and that too in a negative way. Stats reveal, close to $3 trillion foreign goods & services Americans buy every year. The EU, Canada, and Mexico all retaliated against Trump’s metal tariffs by slapping duties on the US products ranging from cheese to motorcycles. Trump seems to be arm-twisting trading partners for concessions to aid and protect a small number of industries—steel,
Trade war
automobiles, agriculture, and energy. He
However, last November the US, Canada, and Mexico officially signed a new trilateral trade deal at the G20 summit in Buenos Aires. It’s known as the USMCA, or the United States-MexicoCanada Agreement. wanted to hike tariffs on imported cars in the name of ‘national security’, a transparent attempt to force automakers to manufacture more cars inside the US. Analysts believe that his trade policies aren’t about ‘fair’ trade, rather about solidifying his political base and
commonly known as NAFTA2.0 includes several changes to textile and apparel sector rules of origin.
tariffs are charged on wholesale import prices, before retail mark-ups. As Edward Rosenfield, CEO, Steven Madden notes
Trouble for fashion retailers
Rob Greenspan, President and Chief Executive, Greenspan Consult believes as companies affected by these tariffs will continue to look for sources of production outside China;
US policy makers have put themselves in a fix with the imposition of duty on imported products. Clothing accounts for about $35 billion of China’s annual exports to the US and footwear $15 billion, around 10 per cent of the total, reveals Dylan Chu, China consumer discretionary analyst, CLSA. The repercussions of the policy enactment may lead to shifting of some factories outside China to offset higher labour costs. Although the onus of paying tariffs will officially fall on the US importers of the
retail prices would need to rise by only 3.5 per cent to offset a 10 per cent tariff. But retailers are unlikely to pass on this cost to consumers; affecting their own profit margins in the bargain.
Tightening the supply chain Sydnee Breuer, Executive Vice President, Rosenthal & Rosenthal recommends, tightening the supply chain. Tariffs will impact higher-end brands with their higher margins lesser than lower-margin and lowerpriced private-label business. The lion’s share of this price increase will have to be borne by factories and importers, which in turn will compel them to trim their operating expenses. Rob Greenspan, President and Chief Executive, Greenspan Consult believes as companies affected by these tariffs will continue to look for sources of production outside China; they will try to pass these additional costs to the retailer, who will in turn, pass them to the consumer.
Unexpected winners and losers
rewarding his supporters. In doing so, the US is becoming isolated from its own partner countries. At a meeting of G-7 finance ministers, the other six ganged up over Trump’s tariffs and demanded collective cooperation on resolving trade issues. Trump had a chance to team up with allies in Europe and Asia to pressure China to change its trade practices. Without the US support, the entire global order, which has produced so much growth and wealth over the past 70 years, could be quite dramatic, making way for dominant China and a diminished US. However, last November the US, Canada, and Mexico officially signed a new trilateral trade deal at the G20 summit in Buenos Aires. It’s known as the USMCA, or the United StatesMexico-Canada Agreement. The trade deal
Although the onus of paying tariffs will officially fall on the US importers of the affected products, the entire supply chain from consumers to the Chinese factories are likely to be affected.
The UN Conference on Trade and Development (Unctad) has warned that there will be huge costs if the trade war escalates. “The implications are going to be massive,” Pamela Coke-Hamilton, Unctad’s head of international trade, said at a news conference. The implications for the entire international trading system will be significantly negative. Smaller and poorer countries would struggle to cope with the external shocks, she said. The higher cost of US-China trade would prompt companies to shift away from current East Asian supply chains. Unctad’s report estimates that East Asian producers will be hit the hardest, with a projected $160bn contraction in the region’s exports.
from consumers to the Chinese factories are likely to be affected. According to Panjiva, a research unit of the credit rating agency S&P, of the 200 US companies that are depending on these tariffs for their main earnings, only 47 per cent plan to raise prices for consumers.
The higher cost of US-China trade would prompt companies to shift away from current East Asian supply chains, but report suggests it’s unlikely that US firms would pick up that business. The study found US firms will only pick up 6 per cent of the $250bn in Chinese exports that are subject to US tariffs.
Also the percentage by which these prices are likely to rise is comparatively lesser as
Of the approximately $85bn in US exports that are subject to China’s tariffs, only about
affected products, the entire supply chain
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Trade war
The study found that European exports will grow by $70bn, while Japan, Canada and Mexico will see exports increase by more than $20bn each. 5 per cent will be taken up by Chinese firms. The study found that European exports will grow by $70bn, while Japan, Canada and Mexico will see exports increase by more than $20bn each. Other countries that could benefit include Australia, Brazil, India, the Philippines and Vietnam, the report said. The manufacturing industry needs to come up with strategies to diversify risk. Factory owners in China are already shifting production to other developing countries
such as Bangladesh, Cambodia and Vietnam over the past decade in search of cheaper wages and a hedge against the political and economic risk that comes from reliance on one country. The trade war will further intensify this shift. Vietnam has been at the centre of many companies’ ‘China plus’ manufacturing strategies in recent years, attracting investments from top companies. Many US and European apparel fashion brands have shifted their production to Vietnam with a
just few spare facilities left in China.
Cambodia emerges new investment destination Increasing tariffs on Chinese products has led to the rise of countries like Cambodia as attractive investment destinations from consumer-goods like Steven Madden and Tapestry Inc.’s Coach. And while the Trump administration has slapped duties on goods from many of its largest trading partners this year, it has allowed some Cambodian products to continue duty-free access to the US market. A study by the US Fashion Industry Association indicates almost 67 per cent
respondent’s expected value or volume of goods sourced from China to decrease
Steven Madden, which expects to source 15 per cent of its handbags from Cambodia this year, with this percentage doubling in 2019. over the next two years. A striking example of this is Steven Madden, which expects to source 15 per cent of its handbags from
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Cambodia this year, with this percentage doubling in 2019. Similarly, Tapestry, the luxury company behind Coach and Kate Spade handbags, is boosting Vietnamese production and sourcing only 5 percent from China. Vera Bradley, meanwhile, is planning to shift its manufacturing operations to Cambodia and Vietnam from China.
India should tread with caution Experts have advised India to have a cautious approach at this stage as the trade war could be extended to India as well. President Donald Trump is very unpredictable, and has already indicated that Washington could levy higher tariff on
The Sino-US trade war, however, opens an opportunity to boost India’s exports to the US. IndiaUS trade is worth over $100 billion. some of the products imported from New Delhi. The Sino-US trade war, however, opens an opportunity to boost India’s exports to the US. India-US trade is worth over $100 billion.
sourcing
China losing dominance,
other sourcing destinations emerge in the horizon Athleisure may have gained ground but denim has made a comeback. As brands look at ways to innovate and add value to their denim collections, manufacturers are coming up with sustainable methods of denim production to lower its carbon footprint globally Power Textiles | 34
sourcing
• Denim industry will grow by 6 per cent till 2023 • Denim is regaining lost ground especially among younger generation • Affinity for denim highest in Colombia, Germany, Turkey, Mexico, and Great Britain • Denim industry one of the worst environmental polluters • Manufacturers are adopting sustainable techniques as denim goes green • The Blue Jeans Go Green programme has so far created 4 million sq ft of insulation • Even a 1 per cent change in fibre and chemistry can make a huge difference in denim fabrics
SAARC and ASEAN regions whose shares went up. Traditional suppliers of the EU-28, the Mediterranean countries expanded their market share. In import of knitted garments, China was again overtaken by the SAARC region whose share now make up one third of total EU imports. In fact, a recent survey by the US Fashion Industry Association indicates, nearly 70 per cent of fashion industry executives plan to restructure sourcing from China over the next two years. At the same time, China’s latest tariff imposition on US imports led to many Chinese textile enterprises and traders shifting their sourcing to other countries. US apparel imports from China from January-March 2018, at $5802.021 million, were 0.87 per cent higher than in the same period of 2017. In volume, Chinese exports to the US amounted to 2,482.089 million SME, an increase of 3.74 per cent during the period under review. In 2017, China’s apparel exports to the US fell 3.17 per cent to $27030.289 million, which was still 33.67 per cent of total apparel imports of the US in terms of value, and 42 per cent in volume. In
to be on downfall. In value, China’s share in US apparel imports was 30.17 per cent, and in volume, 38 per cent. If experts are to be believed, Chinese imports are set to fall further owing to ongoing tariff and trade wars. Having said that even after an overall 25 per cent tariff increase by the US on imports of Chinese apparel, China will still be far more competitive than its counterparts. Vietnam, Indonesia and India will still remain costly affairs barring Bangladesh, which is set to boost the country’s exports in near term. The trade war has also led many foreign companies to shift their production to Southeast Asia. Around 72 Japanese businessmen are planning to expand their investment out of China to shun the risks caused by rising production costs and USChina trade war which is making it difficult for Japanese firms to exports their products to the US from China.
Vietnam a preferred
emerges option
Vietnam is the second largest apparel
• Jeanologia’s G2 washing machine cuts water consumption by up to 70 per cent and chemical usage by up to 80 per cent For the past many years, two of the biggest global textile buyers, US and European, have followed the China + 1 or China + many sourcing strategies. Among these +1 or +many would be Asian countries like Bangladesh, Vietnam, India, Sri Lanka. However, recent OTEXA statistics reveal even though US imports from these countries remain the highest they have not clocked in the highest growth rates. Rather imports have enhanced from Turkey, Myanmar, Cambodia, AGOA countries for mass apparel as well as from Italy, France, and Spain. The reason for this is the consumers’ growing thrust on high value clothing rather than mass produced low end commodities
China
losing
ground
China’s leading position in textile exports is continuously being threatened with the arrival of low coast production regions like Bangladesh and Vietnam. A Euratex report states although China remained the main supplier of woven garments, its share continued to decline only to benefit the
Around 72 Japanese businessmen are planning to expand their investment out of China to shun the risks caused by rising production costs and US-China trade war which is making it difficult for Japanese firms to exports their products to the US from China. the first three months of 2018, China’s share remains the highest, but the share seems
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supplier to the US. Apparel exports from during January-March 2018 were $2858.357 million, an increase of 3.32 per cent compared to the same period in 2017. Also, wages in Vietnam are barely a third of those in China, making it easier for brands like Adidas to manufacture twice as many shoes as it does in China. The race is to secure excess manufacturing capacity all around the region — in Thailand, Indonesia and elsewhere, is heating up.
sourcing
Bangladesh grabs third spot Grabbing the third spot, Bangladesh reins its share in global exports of textile and apparel products. The country’s exports registered a growth of 9 per cent over the last five years to reach $34.4 billion in 2016, while imports increased at a CAGR of 7 per cent in the same period to reach $10.3 billion in 2016. Bangladesh’s textile and apparel trade balance recorded a surplus of around $24.1 billion in 2016. However, the imports of garments from Bangladesh dropped by 0.92 per cent during JanuaryMarch 2018.
Cotton textile is the largest category with a share of 77 per cent in India’s textile and apparel exports to Bangladesh. India is the second largest supplier of textile and apparel products to Bangladesh. It has registered a CAGR of 4 per cent over the last five years. Cotton textile is the largest category with a share of 77 per cent in India’s textile and apparel exports to
Bangladesh. This is followed by man-made textiles and apparel having share of 17 per cent and 4 per cent respectively. Currently, Bangladesh imports its required consumption of yarn and fabric from China, India and other nations to fill the demandsupply gap. It has served as a key export market for Indian cotton and man-made textiles since long. However, many new investments are in the offing in the spinning and weaving sectors of Bangladesh in the coming years with many big firms taking a keen interest to set up spinning and weaving units there. Going by its strong emphasis on the apparel sector, Bangladesh will emerge as a self-sufficient textile and apparel hub by focusing more on backward integration in the next 10 years. This is expected to lower the export opportunities for China and India. While Bangladesh is a key export market for Indian textiles, it will be important for Indian firms whose major export market is Bangladesh to look for newer markets for their exports in the coming years.
Indonesia emerges strong
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The Indonesian government targets increasing textiles and garments exports to $75 billion by 2030, contributing around 5 per cent to global exports. Recent data points out, Indonesia has cheaper labour than other textile producing countries. For example, Vietnam one of its main competitors in ASEAN has minimum wage of $122-176, as compared to Indonesia’s $109-274. Notably Indonesia’s textiles industry in the past contributed significantly to Indonesia’s economy, representing 10.1
Recent data points out, Indonesia has cheaper labour than other textile producing countries. For example, Vietnam one of its main competitors in ASEAN has minimum wage of $122-176, as compared to Indonesia’s $109-274. per cent of the total export. The country needs to work on four factors, which include energy cost. Electricity tariff in Indonesia is more expensive than Vietnam
sourcing
and Bangladesh. Secondly, Indonesia is still dependent on import of textile raw materials, so it cannot get cheap raw materials. The high dependence on imports has also made Indonesian textile industry highly susceptible to the changes in global economy. Indonesia imported almost 100 per cent of its cotton as its own cotton production is only 4 per cent of the total demand. The textile industry in Indonesia is also hampered by high logistics cost, which is the highest in Southeast Asia. Logistics cost including transport, warehousing, and inventory in Indonesia has so far accounted for 24 per cent of the country’s GDP. Also market access is a major bug bear. When exporting to the European Union, Indonesian products are subject to import duty of around 11 per cent. Meanwhile, Indonesia’s competitors, Vietnam, Bangladesh, Thailand, and Ethiopia, enjoyed 0 per cent import duty in EU.
Emerging sourcing destinations Latest statistics indicate Cambodia can emerge as an important apparel sourcing destination for the US. While it offers the
lowest prices, it does not have the capacities to match the demand of the US buyers. US imports from Cambodia went up 12.52 per cent to $587.715 million. In volume terms too, imports registered a similar increase of 12.75 per cent to 262.845 million SME. US imports from Myanmar are quite negligible but growing at a fast pace. During JanuaryMarch 2018, US apparel imports from Myanmar amounted to $33.785 million. Moreover, there has been an increased sourcing pattern from Turkey over the years. Egypt also indicated high demand. During January-Marcy 2018, imports from Egypt were up 15.78 per cent, to $203.355. In 2017, imports from Egypt at $726.547 climbed 5.13 per cent compared to 2016. Imports from Italy rose 20.52 per cent during the first three months of 2018. Imports from France recorded a growth of 11.24 per cent, to $41.756 million. Top exporting countries from AGOA include: Kenya, Lesotho, Madagascar, Mauritania, Morocco, Ethiopia and Tanzania. While most of these countries registered double-digit export growth to the US this year, Ethiopia’s apparel exports grew 101.58 per cent during January-March 2018. US buyers imported apparel worth $21.955
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million from Ethiopia.
A well-crafted strategy boosts Ethiopia’s position Meanwhile other than Asia-Pacific African countries like Ethiopia are also emerging strong in global apparel sourcing map. In order to boost its economy by 2025, Ethiopia has devised a well-crafted strategy where textile forms one of the crucial components of the economy. These efforts seemed to have paid off well with Ethiopia ranking seventh most attractive African country for investors as per Africa Investment Index (AII) 2018. Backed by a rapidly growing economy, a huge population of over hundred million, proximity to major international markets, conducive policy environment and a rapidly improving infrastructure, it has become a favorable destination for foreign investors. Many companies have shifted their manufacturing units from countries such as Turkey, India and China to Ethiopia over the past decade. Moreover, many European and American companies are expanding their presence in the region.
Sourcing
Shorter lead times
reduced costs make nearshoring popular
As lead time gains importance, many western brands are shifting production closer home away from cheaper countries. Surely, nearshoring could gain traction in the future • Western brands sourcing from Asia will shift production to neighboring countries by 2025 • Producers in China, Vietnam and Bangladesh concentrating on delivering quickly to immediate neighborhood • Automation can drive down costs in the West • Clothing, footwear brands being pushed to look outside China and nearer to home for manufacturing • Flexible supply chain an advantage A McKinsey and Germany’s RWTH Aachen University study states western companies sourcing from across Asia will shift production to neighboring countries by 2025. British fashion brands like Burberry and others have already moved some of their production back to England as the tag ‘Made in England’ became attractive to luxury buyers after an import boom in the 1990 and early 2000. Hugo Boss, the German fashion label, has started selling a ‘Made in Germany’ collection, produced completely in Metzingen, the company’s corporate seat. However, this strategy is not attractive for low-priced and mid-range clothing producers who have to constantly compromise between low production cost and a short time to market. These producers, in recent years had moved their production to cheaper countries such as Vietnam and Bangladesh; in 2017, China’s share of apparel imports dropped both in the European Union and the US.
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Sourcing
Fashion companies are embracing new technologies to speed up deliveries. McKinsey assumed a hypothetical scenario where all major technologies currently in development were implemented, and worked with a university in Aachen, Germany, and the Digital Capability Center Aachen to calculate the cost savings in time and labor for producing a pair of jeans. Based on their calculations, to produce the jeans in China with automation and import them into the US, the final cost ends up being around $11.40. But to produce them in Mexico with automation and import them into the US, the cost would be about $10, plus the assorted benefits of the shorter lead time, too.
Rerouting
Shorter lead time increases cost benefits to producers Producers in China, Vietnam and Bangladesh are concentrating on delivering quickly to markets in their immediate neighborhood, creating capacity shortage for Western buyers. But as lead times gain importance, shortening them compensates for some of the labor cost disadvantages by increasing the share of clothes sold at full price. Raising it by 6.1 per cent for a garment that takes 60 minutes to produce would justify the transfer of production from China to the US. As McKinsey states cheaper freight and lower duties make it less expensive to produce a pair of basic jeans in Mexico than in China for the US market and in Turkey for the German market. But Bangladesh still significantly undercuts Turkey for the European market and matches Mexico’s costs for the US and moving production home -- to the US and Germany -- is still a non-starter; it increases cost by 17 per cent in the US and by 144 per cent in Germany.
Automation makes production in Western countries cheaper Automation is driving down cost in Western countries. Now, sewing a pair of jeans takes an average 19 minutes, more than half of the total production time. McKinsey and RWTH Aachen figure robotics can cut that time by
40 to 90 per cent. At another important step, distressing jeans, technology exists to cut the time necessary from about 20 minutes to 90 seconds: Levi’s does it with lasers.
Now, sewing a pair of jeans takes an average 19 minutes, more than half of the total production time. McKinsey and RWTH Aachen figure robotics can cut that time by 40 to 90 per cent. At another important step, distressing jeans, technology exists to cut the time necessary from about 20 minutes to 90 seconds: Levi’s does it with lasers. Almost 82 per cent of sourcing managers surveyed by McKinsey say production of simple garments will be fully automated by 2025. If they’re right, production is coming back -- but jobs aren’t. And China isn’t likely to fritter away its current advantage even as it becomes more expensive: Chinese garment companies are building factories in cheap labor countries closer to Europe such as Ethiopia. With these caveats, it’s likely that buyers of mass market clothes, not just expensive designer threads, will be dressing in garments from geographically closer countries soon.
New technologies to speed up deliveries Power Textiles | 41
supply
chain
Clothing and footwear brands are being pushed to look outside China and nearer to home for manufacturing. In a highly competitive market that’s splitting ever more into winners and losers, a fast, flexible supply chain is increasingly an advantage. It allows brands to respond better to the needs and wants of today’s demanding, internet-enabled shoppers, and that’s why brands including Nike, Adidas, Levi’s are changing the way they make their products— and investing in things like automation and moving production nearshore. Ultimately, it’s not so much a question of whether garment production will move away from China and closer to Western markets, rather it will be how much of the supply chain will be rerouted, and when.
Supply Chains
Regional supply chains to shape future market
Globally three primary supply chains operate in the textile and apparel segment, together they are forming which way the industry goes
• Geographically proximate countries forming regional supply chains • Economically advanced Asian countries supply textile raw material to the less economically developed countries • Developed countries in Southern and Western Europe serve as the primary textile suppliers • The US serves as main textile supplier for developing countries in North and South America
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Supply Chains
A 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. In general, three primary textile and apparel regional supply chains operate in the world today:
Asian supply chain: Here, 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 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.
European supply chain: Developed countries in Southern and Western Europe 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.
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 developed EU members such as UK, Germany, France, and Italy for consumption.
US supply chain: In this regional supply
chain, the United States serves as the leading textile supplier, whereas developing countries in North 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 to watch:
Asian countries emerge major sourcing hub for Asia: Of late, close
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to 80 per cent of Asian countries’ textile imports come from other Asian countries, up from around 70 per cent in the early 2000
EU intra-region trade in textile, apparel stable: Around 55 per cent of
EU countries’ textile imports and 47 per cent of EU countries’ apparel imports come 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 faces competition Operation of Western hemisphere supply chain is facing competition from Asian suppliers. For example, in 2017, only 24.8 percent of North, South and Central American countries’ textile imports and 15.7 percent 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, EU-Vietnam FTA are in process, and the potential US-EU and US-Japan FTAs is on the cards. How they affect regional pattern of world textile and apparel trade remains to be seen.
Trade treaties
Trade treaties
to expand investment relations across the world Free trade agreements, regional trade treaties have given a huge boost to trade in the past few years. While new agreements are being signed old ones are being renegotiated to give them more teeth. This sure will have a big impact on business in the long run • The EVFTA will eliminate customs duties on over 99 per cent goods • The T-MEC agreement will improve quality of products and marketing initiatives • A year after regaining GSP+ facility, apparel volume growth in Sri outstripped its revenue by 1-2 per cent • CPTPP will eliminate 95 per cent tariffs among member countries • EU plans to sign a trade deal with India
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Trade treaties
Economists across the world are at loggerheads with policymakers on whether countries should impose import duty on specific products to regulate imports. While many countries, including India, are actively considering such measures, economists argue governments should refrain from regulating trade flows. Free imports not only expand production quickly but also boost the purchasing power of consumers by allowing them to buy high-quality goods at low price. If trade flow is unhindered, the law of comparative advantage forces countries to specialise and trade in products they have some competitive advantage in. This benefits consumers and producers of both exporting and importing countries.
High import impends
duties growth
While average import duties are low for many developed countries, the US, the EU and most other developed countries charge high import duty on products of interest to developing countries and grant calibrated access only. The EU and the US charge 1020 per cent import duty on Indian apparel and shoes. Japan charges 300 per cent duty on rice. Many European countries charge seasonal import duties on agriculture products. Total import duty on some types of steel in the US and EU exceeds 100 per cent. South Korea is an excellent example of export-led development, but in most sectors it imposes high import duties and non-tariff barriers. The US is fast approaching a point where it would impose extra 25 per cent import duty on all goods coming from China. And, China is mechanically retaliating by doing the same.
EVFTA to pave the way for wider EU-Southeast Asia deal The EU-Vietnam Free Trade Agreement (EVFTA) will bring considerable benefits to all trading parties as it will eliminate customs
The EU-Vietnam Free Trade Agreement (EVFTA) will bring considerable benefits to all trading parties as it will eliminate customs duties on over 99 per cent goods, increase investments from EU and pave the way for a wider EU-Southeast Asia trade deal. duties on over 99 per cent goods, increase investments from EU and pave the way for a wider EU-Southeast Asia trade deal.
The EVFTA emphasises on sustainable development, environmental protection and labor rights, requiring supply chains to establish and expose their practices in each of these areas. A primary chapter is dedicated to labor and environmental matters relevant to trade relations between Vietnam and EU countries. It outlines specific provisions to promote “mutual supportiveness between trade and investment, labor and environmental policies,” according to the “Guide to the EU-Vietnam Free Trade Agreement,” while also dictating that the anticipated boom in trade doesn’t come at the expense of workers and the environment.
GSP Plus: A positive impact on Sri Lankan apparel industry The European Union (EU) reinstated the EU GSP Plus facility to Sri Lanka in 2017. This facility provides Sri Lankan exports level playing field with its neighbors such as Bangladesh and Pakistan, and also several other countries from African and South American continents. A year after regaining GSP+ facility, apparel volume growth in Sri Lanka outstripped its revenue by 1-2 per cent. Exports in the last few months have been particularly strong. The sector further estimates an increase of around 7,500 in jobs. Exports have already increased by $150million, 1/3rd of its stated target of $500 million increment for the apparel sector.
USMCA to boost apparel exports The signing of a new regional trade deal USMCA between Mexico, the United States and Canada, on November 30, 2018 in
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Argentina, augers well for the Mexican garment and apparel industry. The deal, known by the acronyms USMCA in the United States, CUSMA and ACEUM in Canada, and T-MEC in Mexico, replaces the North American Free Trade Agreement (NAFTA), operation since the last 24 years in the three countries’ joint trading area. The T-MEC agreement will not only allow Mexico to maintain its pace of exports to the North American market but also improve quality of products and marketing initiatives. Other Latin American countries, however, are not likely to benefit from the deal, and will have to either find new markets or establish partnerships within the Mexican textile industry to approach the Canadian and US markets at less of a disadvantage.
EU-Japan trade deal to create world’s biggest trade zone Two new landmark agreements between the EU and Japan come into effect on February 1, 2019: the Economic Partnership Agreement and the Strategic Partnership Agreement. The economic agreement is the largest bilateral trade deal ever made by the EU in terms of market size and will be the largest zone of free trade created in history. It drastically reduces tariffs between the EU and Japan, paving the way for simpler and faster trade between the two, and therefore an increase in volume. The strategic partnership commits to security cooperation on issues like nuclear proliferation, regional security, international terrorism and organised crime, cyber-security, and energy and climate security. The new EU-Japan agreements stand in
Trade treaties
direct contrast to Donald Trump’s decision to introduce an “America First” trade policy. Since being elected president in 2016, Trump has emphasised bilateral deals, erected trade barriers and undermined international institutions like the World Trade Organisation. Indeed, it was the anticipation of Trump’s nationalist policies, and especially his withdrawal from the Trans-Pacific Partnership (TPP) trade agreement, that gave renewed impetus to the EU and Japan’s lingering negotiations of the two agreements.
Trade liberalisation in AsiaPacific the CPTPP way The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into force recently, supports free trade amid ongoing global trade tensions. The CPTPP has 11 member countries, namely Canada,
An FTA between Vietnam and the EU is hoped to be signed in the near future, while Australia, Indonesia and New Zealand are also negotiating similar deals with the EU.
Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Its enforcement is the latest demonstration of trade liberalisation in AsiaPacific, experts have said, noting that Japan and Singapore recently signed bilateral free trade agreements (FTAs) with the European Union. An FTA between Vietnam and the EU is hoped to be signed in the near future, while Australia, Indonesia and New Zealand are also negotiating similar deals with the EU. The CPTPP will eliminate 95 per cent tariffs among member countries, and they have opportunities to gain immediate trade benefits from it, especially in the textilegarment and footwear industries. The most significant effect of the CPTPP could be to propel an even larger East Asian alternative that would ultimately supersede it. Five of the seven governments that have ratified the CPTPP are also involved in the less successful mega-regional trade negotiations led by Asean for a Regional Comprehensive Economic Partnership (RCEP) agreement.
EU defers Cambodia,
action on Myanmar
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The EU is reluctant to take action against Cambodia and Myanmar, who continue to enjoy duty-free market access to the EU, despite being accused of severe human rights violations. Both these countries enjoy the ‘Everything But Arms’ trade preferences, as a part of a development policy intended to improve livelihoods by encouraging exports. The EU is cautious about enforcing the eligibility conditions of Everything But Arms since it could hurt the very people the program is designed to help. The new tariffs would hit exports from Cambodia and Myanmar hard, along with the workers in those factories.
EU eager for a trade deal with India Growth in trade and investment between Britain and India will be driven by the tech sector. The EU has vision to focus on India UK relationship post Brexit. EU-India FTA has been in negotiations since 2007. While little progress has been made since the Brexit vote, the EU is still eager for a deal. It believes that there is plenty of room to expand trade and investment relations and make them more fruitful.
investments
Increasing investments,
expansion boost Indian textile growth
India’s textiles sector has witnessed a spurt of investment in the last five years. With positive government initiatives, the sector will see further growth in the future • Indian textile industry attracted FDI worth $2.97 billion from April 2000 to June 2018 • Textile ministry earmarked
Rs 690 crore for setting up 21 RMG manufacturing units in seven states • Government needs to focus on regional clusters,
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technology upgradation and skill development subsidies, which benefit all producers
investments
India Ratings and Research (Ind-Ra) has maintained a stable outlook for the country’s textile sector for 2019-20. Strong domestic demand, along with the waning impact of the disruptions due to the goods and services tax (GST) and demonetisation and rising export of textiles aided by a weak Indian rupee, is likely to lead to volume growth and make firms profitable. Ind-Ra expects textile industry players to register improved cash flow from operations for fiscal 2019-20, as their working capital would stabilise as challenges related to demonetisation and GST subside. As per key findings of the annual ‘Market for Textiles and Clothing (MTC)’: National Household Survey 2017, the overall market size of textiles and clothing including exports increased to $146.63 billion in 2016 and further to $164 billion in 2018. Aggregate demand for textiles & clothing was 41.06 billion meter in 2016 which further reached to 45.32 billion meter in 2018, growing at a Compound Annual Growth Rate (CAGR) of 5.34 per cent from 2011 to 2018. In value terms, the demand touched Rs 6,204.02 billion in 2018, with CAGR of 9.54 per cent between 2011- 2018. The per capita demand for textiles in 2016 was Rs 4,081.60 as compared to Rs 3836.13 in 2015. It touched Rs 4,762.90 in 2018. On the other hand, per capita demand for textile in quantity terms increased to 31.85 meter in 2016 and further to 34.58 m in 2018.
Demand for cotton fibers sees highest increase The aggregate demand for cotton fiber
based product was 17.22 billion meter in 2016 and increased to 19.29 billion meter in India’s textiles and clothing market. The demand for manmade fiber based product, on the other hand was 23.34 billion meters in 2016 and increased to 25.46 billion meters by 2018. Similarly, the aggregate demand for pure silk and woolen fiber based product was 0.34 billion and 0.16 billion meter respectively in 2016. It is expected to have touched 0.37 and 0.20 billion meter respectively in 2018.
Power loom sector highest contributor to textile The mill/power loom sector contributed 33.97 billion meters (82.72 per cent) to the overall demand of textiles in 2016 compared to 31.85 billion meters in 2015. Similarly, the knitted sector contributed 4.94 billion meters to the total basket in 2016 as against 4.77 billion meters (12.39 per cent) in 2015. At the same time, the handloom sector contributed 5.24 per cent to the total demand for textiles in the household sector. Aggregate demand for handloom textiles is 2.15 billion meters in 2016 as compared to 1.91 billion meters in 2015. The aggregate demand for textiles by sector of manufacturing for 2018 for mill made/power loom, knitted/hosiery and handloom sector was 37.24 billion meter, 5.56 billion meter and 2.53 billion meter respectively. Demand for household sector is the major contributor to overall growth of the sector with 53.39 percentage of share in the total market size. While the export of textile and
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clothing decreased 4.66 per cent, demand in household and non-household sector grew 2.82 and 1.51 percentage respectively during 2016. The growth in household demand of textiles has created an additional demand
While the export of textile and clothing decreased 4.66 per cent, demand in household and nonhousehold sector grew 2.82 and 1.51 percentage respectively during 2016. for 2,525 million meter of fabrics, which is an indication of the required capacity expansion in fabrics manufacturing in the country. Similarly, the growing demand for newly emerged products like legging etc, provides an indication of the change in preference pattern of consumers in the country during the period.
Favorableinitiativesleadtogrowth India’s textiles sector has witnessed a spurt of investment in the last five years. The industry attracted FDI worth $2.97 billion from April 2000 to June 2018. Some of the major investments in include a new skill development scheme named ‘Scheme for Capacity Building in Textile Sector (SCBTS)’ by the Cabinet Committee on Economic Affairs (CCEA), with an outlay of Rs 1,300 crore ($202.9 million) from 2017-18 to 2019-20. Investments worth Rs 27,000 crore ($4.19 billion) recorded by the industry from June 2017-May 2018.
investments
The Textile Ministry earmarked Rs 690 crore ($106.58 million) for setting up 21 RMG manufacturing units in seven states for development and modernisation of textile sector. Additionally, the Directorate General of Foreign Trade (DGFT) revised rates for incentives under the Merchandise Exports from India Scheme (MEIS) for two subsectors of the industry – RMG and Made ups -- from 2 to 4 per cent. As of August 2018, the government increased basic custom duty to 20 per cent from 10 per cent on imports of 501 textile products, to boost Make in India and indigenous production. The government also announced a special package to boost exports by $31 billion, create one crore jobs and attract
The Union Ministry of Textiles also introduced Amended Technology Upgradation Funds Scheme (ATUFS) to improve operational efficiency of textile units, was later upgraded to encourage new investments in the sector. The scheme has so far, attracted billions of rupees in investment. Under this scheme, co-operative banks can lend money to textile units for technology upgradation. The scheme, set to benefit the synthetic textile sector immensely, has also been extended to limited liability partnership (LLP) firms.
Domestic issues trample growth One key area of concern today is continuous rise in textile imports which needs immediate attention and government support. categories
provided an opportunity to increase its share in the global textiles industry. But domestic issues including outdated technology, inflexible labour laws, infrastructure bottlenecks, and a fragmented nature of the industry trampled these hopes. As per World Trade Organisation’s Agreement on 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.
Need for upgradation
technology subsidies
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. 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.
investments worth Rs 80,000 crore ($11.93 billion) during 2018-2020. As of August 2018 it generated additional investments worth Rs 25,345 crore ($3.78 billion) and exports worth Rs 57.28 billion ($ 854.42 million). It has taken several measures including Amended Technology Up-gradation Fund Scheme (ATUFS), scheme is estimated to create employment for 35 lakh people and enable investments worth Rs 95,000 crore ($14.17 billion) by 2022 Some of the other prominent schemes that Ministry of Textiles has introduced for the development of entire textile value chain include: Scheme for Integrated Textile Park (SITP) and Integrated Processing Development Scheme (IPDS) which have been extended and notified from 2017 to 2020 and Technology Upgradation Fund Scheme (TUFS) under which A-TUFS has been launched for 2016-2022.
across value chain have seen a drastic rise in imports. 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. The rise in Chinese labour cost could also have
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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. 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.
TECH - trends
Fashion
takes the digital route As Industry 4.0 is making its place in manufacturing, both manufacturers and retailers need to catch up as it’s not an advantage, it’s a dire necessity. Digital transformation is not just about speed to market, it’s also about efficiency, validation, creating better products and the ability to focus on creativity and innovation. In short, there is a need for digital solution that will disrupt the entire supply chain
• Advancements like computer-aided design (CAD) and computeraided manufacturing (CAM) applications have revolutionised the sector • 3D technology reduces development time • Apparel retailers are
embracing advanced analytics and blending intuition with science to regain control and price smarter • Blockchain means more transparency about apparels fibers, and production process
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Automation has been making inroads in the textile industry rapidly owing to increasing competition, rising labour costs and lack of skilled workforce. While the Indian industry has started taking steps, it is yet to catch up with the global counterparts. Deploying automation has multiple advantages such as eliminating human operators from a specific job, creating new jobs through operation and maintenance of automatic tools and equipment. The transition doesn’t seem to be easy either as the manufacturer
TECH - trends
also needs to reduce production cost to survive in the competitive market. Till a few years back, buttonholing machines, button attaching machines, bar tacking machines, label attaching machines and pocket sewing machines were the widely accepted technologies. But advancements such as computer-aided design (CAD) and computer-aided manufacturing (CAM) applications, new techniques in cutting, fusing, and pressing, as well as application of robotics has revolutionised the sector. The clothing industry has been transformed from a traditional, labour-intensive one into a highly automated and computer-aided industry.
coats, blazers, anoraks and trousers on a maximum quality level. Another machine XP 7100 - IX automatic placket setting workstation can fully automatise a series of sewing placket processes. The machines can be used with Brother Direct Drive sewing head; Beijer electronics windows Based 256 Million Colour supported touch screen control Panel. It comes with programmable start and end back tack or optionally adjustable stitch condensing.
Blockchain’s impact on global textile industry Blockchain was originally created as a
be changed. All participants have access to the same data at the same time, allowing them to seamlessly find information and answer questions.
Increased efficiency for a sustainable future In this system, companies design files to autonomous machines at different locations, where customers wait while the clothing is quickly made on-site. As production is done on-demand and on-site, companies will spend less of their time and money in chasing down audits and looking for the
Latest innovations in the industry In line with changing market dynamics, companies have introduced various automation solutions to garner growth. Tukatech 3D‘s accurate virtual fit sessions with animation allows the user to bypass physical sample making, dramatically reducing the time and cost associated with product development. Tukatech’s 3D apparel design software eliminates the need for trial and error in physical sample creation, ensuring that any design fits right the first time. Its virtual fit sessions with animation allows the user to bypass physical sample
Tukatech’s 3D apparel design software eliminates the need for trial and error in physical sample creation, ensuring that any design fits right the first time. Its virtual fit sessions with animation allows the user to bypass physical sample making, dramatically reducing the time and cost associated with product development, so crucial in a time conscious world. making, dramatically reducing the time and cost associated with product development, so crucial in a time conscious world. It can be used to animate the virtual fit model to visualise how a garment drapes in motion. Similarly, Turkey-based group Robotech, which is known for bringing latest and highly technical automatic machines, offers many automatic solutions. The automatic pocket welting machine FF 6100-TR; XP 7100 – IX polo fly automat, which can increase the productivity by around the 20 per cent and JK 9300 – IX for automation in making waist bands. The sewing unit for piped pockets in FF 6100-TR allows an efficient and flexible production of straight and optionally slanted welt pockets, flap pockets and inside pockets for the production of men’s and ladies jackets,
public ledger for bitcoin, the crypto-currency. Blockchain would work as a public digital ledger where each item being manufactured would be given a unique product identity that is then stored in the blockchain. As an item makes its way through the production system, each transaction needed to manufacture that product is validated on a digital ledger that is continually updated for everyone in that network. Once information is entered, it can’t
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latest certification. Over time, the blockchain ecosystem will provide increased efficiency and more beneficial data leading to a more sustainable future for denim.
3D tech revolutionises garment manufacturing The ability to finalise prototypes within hours instead of weeks, review collections within weeks
TECH - trends
instead of months, and change colours and graphics at a push of a button is revolutionising the way garments are being produced. 3D technology was integrated through advanced plug-ins into existing tools such
Today, designers can visualise 3D garments with accurate proportion and scaling, customise the garment’s fabric, texture, print patterns and graphic placement without waiting for a printed sample, all by using a 3D plug-in that runs in the native design environment on a PC or a Mac. as in the case of Adobe Illustrator, whose 3D plug-in allows designers the freedom to validate and customise garments in 3D without abandoning the reliable graphics editor. Today, designers can visualise 3D garments with accurate proportion and scaling, customise the garment’s fabric, texture, print patterns and graphic placement without waiting for a printed sample, all by using a 3D plug-in that runs in the native design environment on a PC or a Mac. The use of technology led to reduced waste both of time and fabric as 3D technology enables brands to cut development time in half and reduce the use of physical samples by nearly 50 per cent, which further resulted in the massive reduction in ecological damages. An extremely high financial cost in addition to the aspect of pure waste could easily be reduced by 75 per cent using 3D technology.
For a shopping
wholesome experience
Retailers are developing stores around changing consumer attitudes, with spaces and experiences that encourage a mental or physical reset. Lululemon is introducing meditation space at its new store near Rockefeller Centre in New York. The concept store features cushioned “Zen pods” where visitors can listen to one of 12 self-guided meditation recordings. The US brand has just opened a pop-up experiential space in New York called Life Coach, dedicated to self-improvement. Visitors can book in for free sessions with tarot card readers, astrologists and mystics, or play games and partake in activities that encourage self-expression.
A new dawn in the industry Micro textile model promises a new dawn for the industry workflow, laser cutting, and digital textile printing are providing a way forward that is not only risk free but also
The micro-factory model of “Sell, Produce, Deliver,” and not “Produce, Sell, Deliver” is driven by an online sales presence, alongside AR and AI software. consumes fewer resources. The micro-factory model of “Sell, Produce, Deliver,” and not “Produce, Sell, Deliver” is driven by an online sales presence, alongside AR and AI software. The client selects buys and pays for their product before the item is produced. The model is capable of producing and delivering in 24 hours through n the speed of image processing, computerised workflow, digital printing and cutting and with computerised sewing (as an option) then dispatch.
Retailersadoptadvancedanalytics Apparel retailers are embracing advanced analytics and blending intuition with science to regain control and price smarter. This has brought about a margin and sales lift of three to six percentage points for some companies. Pricing smarter requires understanding where customers perceive value and having the agility to respond to competitors’ moves with full insight into the impact on financial performance.
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Industry leaders are investing carefully in price and promotion, as well as leveraging insights from advanced analytics to make smart decisions. This approach gives merchants clear, analytics-informed price for a style before they plan sales volumes and make inventory commitments. Such foresight can spell the difference between strong sell-through and piles of excess inventory later.
New techniques to identify style groups New styles appear every season, often with little connection to products sold previously. As a result, products do not have a long sales history to analyse. Artificial intelligence can address these style-matching challenges more accurately and efficiently than merchants ever could. Integrating techniques such as computer vision, text mining, and machine learning can identify groups of styles that are likely to respond similarly to changes in price and promotions. The fashion playing field is now more global than ever before. The only way to fully optimise the supply chain and focus on creativity is by going digital.
markets
China emerges
stronger than the US as world’s largest fashion market Tariff war has lent a sense of pessimism in the apparel and textile sector globally. China still leads with India a strong player. In future technology-impacted consumer shifts will be amongst the most important growth trends • Trade war leads to pessimism in global apparel industry • Brexit to impact global fashion market • Apparel sales are expected to remain steady over the next 12 months • China’s textile and clothing exports have risen more than fourfold since 2000 • India will continue to be a major textile production center
• Growth in the Eurozone will slow down at 1.9 per cent • Omni channel retail, especially ecommerce to boost growth McKinsey & Company and the Business of Fashion’s ‘State of Fashion 2019’ report suggests China will overtake the US as the world’s largest fashion market for the first time in 2019.
Trade war leads to pessimism 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, many experts feel the trade war will have minimal effect on China’s business. India will continue to be a major textile production center catering to a huge domestic market. But imports from China, Bangladesh are causing disturbance in supply chain however, the government is taking corrective steps and a lot of favorable initiatives are being taken by textiles ministry
But imports from China, Bangladesh are causing disturbance in supply chain however, the government is taking corrective steps and a lot of favorable initiatives are being taken by textiles ministry to improve production synergies and textile business model. to improve production synergies and textile business model. Meanwhile, Middle East continuous to be a big consumer of textiles based on imports, major exporting countries to Middle East include China, South Korea, Indonesia, Turkey, India, Pakistan etc. As the Middle East economy is affected, its textile business is also affected. Though improving oil prices are offering a lot of relief, it will take time as economy has been adversely affected for last few years.
Positive sales prospects for next 12 months Recently, Hong Kong Trade Development Council (HKTDC), during the course of Centerstage, a fashion brand-promotion, launch platform and trade exhibition
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markets
conducted face-to-face interviews with 234 buyers and 72 exhibitors to gain an overview of the current market prospects, new product
Around 58 per cent of buyers expected the retail price of their products to remain unchanged in 2019, while 31 per cent expected an increase in the retail price and 11 per cent foresaw a decrease. trends and latest e-tailing developments. The survey reflected optimism on sales prospects over the next 12 months with exhibitors being more upbeat than buyers. Around 87 per cent buyers and 91 per cent exhibitors expected sales to remain steady or increase over the next 12 months. Around 58 per cent of buyers expected the retail price of their products to remain unchanged in 2019, while 31 per cent expected an increase in the retail price and 11 per cent foresaw a decrease. Around 38 per cent expected the FOB selling price of their products to increase compared to 17 per cent in the 2017 survey, while a comparatively small number of exhibitors expected it to decrease to 8 per cent as against 13 per cent last year. Around 45 per cent buyers expected sourcing prices and production costs to increase, while 51 per cent anticipated it to remain unchanged. Only 4 percent, however, predicted a decrease in costs.
Brexit to impact global economy slowly but surely For the last two and a half years, Brexit has consumed the entire United Kingdom. The UK’s negotiations with the EU have dragged on through multiple déjà vu moments, and the consensus is that the economic fallout will be felt far more acutely in Britain than in the EU, let alone in countries elsewhere. Still, the rest of the world is facing profound challenges of its own. Political and economic systems are undergoing far-reaching 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. The Brexit process 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 pooledinsurance mechanisms. And it will be much harder to maintain global norms and standards, let alone pursue international policy harmonisation and coordination. 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.
Omnichannel integration to increase In 2019, technology-impacted consumer shifts will be amongst the most important growth trends. Luxury fashion brands in China have been quick to utilise the country’s most popular social-mediaturned-e-commerce app WeChat, which boasts over 1 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. E-Commerce platforms are turning out to be a big blessing as online sale is eliminating middle man. Ecom platforms are helping small
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manufacturers produce high quality stuff.
E-Commerce platforms are turning out to be a big blessing as online sale is eliminating middle man.
Need for constant innovation and research To sustain growth, the textile industry needs to constantly innovate and research. It needs to constantly invest in quality control and new opportunities such as defense textile, huge requirement of camouflage fabrics as size of armed forces is increasing all over the world. Similarly coated fabrics, industry textiles have become huge markets now. The textile and apparel industry is buyer-driven and dominated by retailers, brands and sourcing companies. Retailers demand full-package service from their suppliers, but they are reluctant to pay for additional services.It is important in today‘s business environment to select customers who see you as partners.
DENIM
Denim
makes a splash with innovations, new trends and sustainability Athleisure may have gained ground but denim has made a comeback. As brands look at ways to innovate and add value to their denim collections, manufacturers are coming up with sustainable methods of denim production to lower its carbon footprint globally • Denim industry will grow by 6 per cent till 2023
the worst environmental polluters
• Denim is regaining lost ground especially among younger generation
• Manufacturers are adopting sustainable techniques as denim goes green
• Affinity for denim highest in Colombia, Germany, Turkey, Mexico, and Great Britain
• The Blue Jeans Go Green programme has so far created 4 million sq ft of insulation
• Denim industry one of
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• Even a 1 per cent change in fibre and chemistry can make a huge difference in denim fabrics • Jeanologia’s G2 washing machine cuts water consumption by up to 70 per cent and chemical usage by up to 80 per cent
DENIM
A recent P&S Market Research report suggests, global denim industry, valued at over $57 billion, will experience an annual growth rate of 6 per cent till 2023. The reason for this stupendous growth is the innovative and advanced status of manufacturers and buyers who strive to create sustainable denim that leaves a lesser impact on the environment.
Regaining
lost
ground
Amid athleisure’s growing preference, the world’s most famous attire – denim is witnessed lacklustre growth in the last two years. But what is bringing zing back is the products newness. In a report, ‘Spotlight on Jeans: Denim Bounces Back’, Lorna Hennelly, fashion & beauty analyst, Euromonitor, says consumer demand for leggings is slowing, giving rise to a rebound in rigid, retro-style denim. The resurgence in demand is driven by millennials and grows in line with the industry-wide revival of ’90s-style fashion and nostalgic Americana, after over a decade of ultra-stretch skinny jeans saturating the market. In an effort to compete against athleisure, jeans manufacturers
Cotton Incorporated Lifestyle Monitor Survey suggested in the US, almost six out of 10 consumers (59 per cent) ‘love or enjoy’ wearing denim. Nearly two thirds (61 per cent) say they wear denim jeans or shorts at least three times a week. are innovating and adapting to evolving consumer needs. Similarly, Cotton Incorporated Lifestyle Monitor Survey suggested in the US, almost six out of 10 consumers (59 per cent) ‘love or enjoy’ wearing denim. Nearly two thirds (61 per cent) say they wear denim jeans or shorts at least three times a week. American women are even more likely than men to wear denim so often (63 per cent versus 57 per cent). According to Prescient & Strategic (P&S) Intelligence, North America is the world’s largest denim market, contributing more than 30 per cent revenue to the global market in 2016. Statista’s research reveals sales are being encouraged by expanding urban population, increase in the number of white-collar employees, changes in perceptions about ‘executive wear’ and the resulting acceptance of jeans as business casual attire for men. Affinity for denim is highest in Colombia (82 per cent), Germany (81 per cent), Turkey
(72per cent), Mexico (71 per cent), and Great Britain (68 per cent). The two most heavily populated countries in the world, India and China, have come to appreciate denim jeans more than ever. The number of people in these Asian countries who love or enjoy wearing denim has grown significantly between 2003 and 2018, from 22 per cent to 53 per cent in India, and from 39 per cent to 65 in China, states the Global Lifestyle Monitor Survey. Monitor research shows on average, men and women in the US own six pairs of denim jeans. In contrast, consumers in denimloving Colombia own nine pairs; followed by Mexico (eight pairs); Germany (seven pairs), Italy and Turkey (both six pairs); Great Britain and Thailand (both five pairs); China (four pairs); and Japan and India (three pairs). P&S Intelligence says jeans have been the largest contributor to global denim market, and they are expected to drive future sales as well. The availability of numerous styles in jeans, such as: skinny, stretch, ultra-lowrise etc provides multiple options for buyers to choose. Globally, consumers want quality denim that wears well because they are usually wearing it out in public.
Focus on sustainability in denim production The denim industry is considered to be one of the worst polluters, the biggest culprit being sweet water used to produce a pair of simple jeans. To overcome this, innovative brands/ manufacturers are looking at numerous solutions such as dry ice cleaning and ozone washing, etc are being used. Industry leaders are innovating with sustainable dyeing and washing solutions like ikat, ozone wash and
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indigo to develop eco-conscious processes. Levi’s created ‘Water Less’, a set of standards
Mexico-based mill Global Denim recently launched a zero-discharge dyeing process called Ecolojean that uses less water and energy than conventional methods required to dye one pair of jeans. AnattFinkler, Creative Director, Global Denim, says instead of passing the denim or thread through water vats and dyeing vats, Ecolojean process only puts them through dyeing vats and the dye bonds to the fabric without having to go in the water. and tools that removed up to 96 per cent of the resource from the denim finishing process. Instead of using a lot of water and detergent to achieve a stonewashed look, Levi’s discovered how to get the same result using ozone gas. Patagonia reduced its reliance on the resource by 84 per cent after swapping out synthetic indigo dye for lowimpact alternatives that adhere more easily to cotton. Similarly, Eileen Fisher worked with its Los Angeles jeans factory to develop two new washes, Utility Blue and Indigo, that both use 62 per cent less water than the brand’s most intensive wash.
DENIM
Meanwhile mills and suppliers are also taking initiatives. Hong Kong-based Trusty Trading, a waistband and pocketing specialist partnered Archroma to create a Eco Pocketing range. With Archroma’s near-waterlesssOptisul C dyes, it was able to reduce water usage by 94 per cent, while also increasing speed to market. Archroma offered two eco-friendly dyeing processes under its Advanced Denim concept, Denim-Ox and Pad/Sizing-Ox, since 2009. By using sulfur dyes instead of indigo, traditional dyeing ranges comprising 15 vats are replaced with systems that use no more than five vats.
dyeing process called Ecolojean that uses less water and energy than conventional methods required to dye one pair of jeans. AnattFinkler, Creative Director, Global Denim, says instead of passing the denim or thread through water vats and dyeing vats, Ecolojean process only puts them through dyeing vats and the dye bonds to the fabric without having to go in the water. When you dye conventionally, as much as 25 per cent of the dye ends up in the water, but with Ecolojean, 100 per cent of the dye that’s applied remains on the yarn.
Jeanologia has introduced its G2 washing machine in 2008, which uses oxygen and ozone gas instead of water and toxic processes to give jeans an aged look. As per the firm, G2 cuts water consumption by up to 70 per cent and chemical usage by up to 80 per cent. Carmen Silla, Marketing Manager, Jeanologia says technology minimises water consumption and chemicals, eliminates waste and reduces energy in all processes.
The Blue Jeans Go Green denim recycling programme gives new purpose to old denim. As Roian Atwood, Director-Sustainability, Wrangler, the company contributed more than 43,000 pounds of denim, which produced over 80,000 sq. ft of insulation in 2017.
In line with this, Mexico-based mill Global Denim recently launched a zero-discharge
J. Crew, have also partnered with the move. UltraTouch Denim Insulation is created through a partnership with Bonded Logic Inc. The company collects denim scraps, material and products from its internal manufacturing, product development and distribution centres. Wrangler works together with the Blue Jeans Go Green program to provide 130,000 sq. ft. of the sustainable denim insulation to All Hands and Hearts – Smart Response for its rebuild effort after Hurricane Harvey.
A new purpose to old denim Upcycling gains ground
So far, more than 4 million sq ft of insulation has been manufactured from the Blue Jeans Go Green programme. With this initiative, more than 1,000 tons of denim garments have been kept from being sent to landfills. Looking at the success rate, big giants such as Holt Renfrew, Madewell, Rag & Bone, and
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Manufacturers are creating hybrid weaves besides mixing up different washes in the same garment for modern looking cuts. Two-tone denim and blends with fibres like elastane and lyocell are dominating majorly.
Antwerp-based denim brand, HNST, will soon start delivering its first batch of jeans made with 56 per cent PCRD. Denim by HNST fosters a circular economy, which means they can be recycled again. Embroidered rivets replace metal pins, buttons are removable, pocketing fabrics include fiber made from recycled white
DENIM
T-shirts, and labels are made from GOTScertified jacron, a paper-like material. In September 2017, the brand initiated a twoweek collection campaign in Belgium, where it collected over 6,000 pairs of old jeans that were sorted and recycled into new denim. This year again, it will host a second harvesting campaign asking consumers to donate unwanted denim to create a new collection. As Amy Wang, GM, Advance Denim observes, advertising and marketing does not equal innovation. There needs to be concerted focus on developing crossover materials and eco-friendly denim fabrics. Even a 1 percent change in fibre and chemistry can make a huge difference in denim fabrics. For manufacturers, the ultimate goal is to hit sustainability targets without compromising the look and feel that has made denim a consumer favourite. Newly released Lycra T400 fibre with EcoMade technology is made in part from a combination of recycled PET and plantbased materials. 50 per cent of the fibre is made from recycled materials while another 18 per cent is plant based, bringing the total sustainable content to 68 per cent, according to Jean Hegedus, global segment director
– denim & apparel, Invista. LYCRA T400 fibre with EcoMade technology has similar performance to standard Lycra T400 fibre, and the use of recycled PET means that there is less waste going to landfill. Hegedus added that most recycled fibres are not stretch fibres. At the same time, most stretch fibresmade partly from renewable sources don’t offer the level of stretch performance that Lycra T400 EcoMade technology offers.
For manufacturers, the ultimate goal is to hit sustainability targets without compromising the look and feel that has made denim a consumer favourite.
Almost every consumer today is looking for stretch fabrics, especially in jeans. Even loose silhouettes are looking to stretch fibres to boost shape retention and provide greater comfort to the wearer. Invista offers three options for bi-stretch functionality. Dual Warp technology provides easy-to-control levels of shrinkage and stretch, while retaining the authentic look of the fabric. Easy Set Lycra fibre (T562B) is for fabrics with low to moderate stretch, and offers easy to handle
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warping, sizing and beaming. Popular Lycra dualFX technology offers excellent growth and shrinkage, even for high stretch fabrics. For true 360-degree flexibility, Lycra XFIT technology is developed to add stretch to the warp for more even stretch in key areas including the seat, thigh and knee. In short, function is replacing fashion as consumers want comfort.
Your denim in future It’s going to be packed with embellishments, destroyed and bleached denim going forward. Oversized denim will see a rise, although younger designers and emerging brands will use overly exaggerated silhouettes and more street-style looks. Spring/Summer 2019 will also see a strong usage of raw denim. According to Hennelly, the novelty of athleisure is wearing off, and consumers are looking to their fashion favorite for newness in their wardrobes. Consumer demand for leggings is slowing, giving rise to a rebound in rigid, retro-style denim. The resurgence in demand is driven by millennials and grows in line with the industry-wide revival of ’90s-style fashion and nostalgic Americana, after over a decade of ultra-stretch skinny jeans saturating the market.
HOME TextileS
Global home textiles market clocks in robust growth
Home textile market is on a roll with the US and Asia Pacific region moving ahead and setting the path for future growth •
The global home textile market is estimated to reach $130 billion by 2021
•
The US is the world’s single largest home textiles market accounting for 21 per cent market share
•
Asia Pacific, accounting for 44 per cent of the market
•
Is the most dominant producer and consumer of home textiles
•
India’s bed linen consumption expected to reach Rs 19,350 crore ( $US 2.81 billion) by 2021
The global home textile market is estimated to reach $130 billion by 2021. Bed linen accounts for the largest share of 45 per cent, while bath linen constitutes 20 per cent. Other segments such as floor coverings, furnishings, table and kitchen linen make up 35per cent of home textile market. Bed linen and bedspreads segment
is expected to grow at a CAGR of 4.4 per cent to reach $60 billion by 2020. The US is the world’s single largest home textiles
Bed and bath linen market in Europe is expected to grow at CAGR of 1.7 per cent to $17 billion by 2020.
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market accounting for 21 per cent market share. The US market is projected to grow at CAGR of 3 per cent to reach $27 billion by FY2020. Europe is the second largest home textiles market, accounting for 26.8 per cent. Bed and bath linen market in Europe is expected to grow at CAGR of 1.7 per cent to $17 billion by 2020.
HOME TextileS
As per latest US customs data, the country’s imports of home textiles and made-ups grew at a robust 7.7 per cent to reach 8,740 million sq. mt. during the January-May 2018 period. Import of made-ups and home textiles of man-made fibres grew 10 per cent to reach 6,093.6 million sq. mt. In contrast, cotton made-ups and home textile imports grew by 1.6 per cent to reach 2,375.5 million sq. mt. Meanwhile, Asia Pacific, accounting for 44 per cent of the market, remains the most dominant producer and consumer of home textiles. Here, China is the largest manufacturer and consumer of home textiles. The market size is estimated at $30 billion.
EU bed poised
linen to
market grow
Recent IndexBox study ‘EU: bed linen analysis and forecast to 2025,’ indicates the size of the bed linen market in the EU reached approx 495,000 tons in 2016, which is 6 per cent more than previous years. Over the period from 2007 to 2016, the market experienced mixed trend patterns. From 2007-2010, there were somewhat pronounced fluctuations, followed by a dip over the next two years; however, it increased slightly from 2013 to 2016. In wholesale prices, the market also increased over the last four years, finally amounting to
expanded at an annual average growth rate of +1.7 per cent.
Germany and UK lead growth Amongst the EU members, Germany (17 per cent), the UK (17 per cent), France (13 per cent), Italy (12 per cent)EU bed linen market poised to grow with Germany in the lead 001 constitute the countries with the largest volumes of bed linen consumption. The highest annual rates of growth in terms of bed linen consumption from 2007 to 2016 were recorded in the UK, with an average annual rate of +1.9 per cent. Meanwhile, consumption in France (+0.8 per cent), Italy (+0.4 per cent) and Germany (-0.5 per cent) remained relatively stable from 2007 to 2016. Levels of per capita consumption in the leading consuming countries were equivalent to the EU-average level of 1.0 kg/year; the highest per capita consumption was recorded in the UK (1.3 kg/ person), where it grew steadily from 20072016.
on imported products, mainly from Pakistan, China and Turkey. In 2016, bed linen exports in the EU was 208,000 tonne, which was equal to €1.9B. Germany (43,000 tonne), the Netherlands (24,000 tons), Portugal (23,000 tonne) and Belgium (22,000 tonne) constituted the main suppliers of bed linen among the EU members, with a combined share of 54 per cent of total exports in 2016. Among these countries, the Netherlands (+16.0 per cent per year) and Germany (+12.6 per cent per year) were as the fastest growing suppliers from 2007 to 2016, while exports from Portugal reduced on an average -2.2 per cent over the same period. While the share of Germany (+12 percentage points) and the Netherlands (+8 percentage points) increased significantly, the shares of Portugal (-6 percentage points) and Belgium (-3 percentage points) illustrated a negative dynamic.
The
India
Story
India is the third largest home textiles market in the Asia Pacific region, projected to grow at a CAGR of 7.2 per cent to reach $5.6 billion by 2020. India’s bed linen consumption is expected to reach Rs 19,350 crore ( $US 2.81 billion) by 2021, growing at a CAGR of 8 per cent from 2011-2021. Towels consumption in the country is estimated to reach Rs 7,060 crore ( $US 1.02 billion) by 2021, curtains Rs 4,790 crore ( $US 0.70 billion) , blankets Rs 2,850 crore ( $US 0.41 billion), upholstery Rs 3,080 crore( $US 0.45 billion), kitchen linen Rs 2,400 crore( $US 0.35 billion), and rugs and carpets ( $US 0.18 billion) crore by 2021. The strong growth expected in the market over the next three years has pushed up investments in the sector.
Drivinggrowthintextilechemicals The Grand View Research study also points out home furnishing applications dominated the textile chemicals market. The global textile chemicals market is expected to
The global textile chemicals market is expected to be worth 27.56 bn by 2022.
€3.1 billion in 2016. This figure reflects the total revenue of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). Over the last nine years, the market value
Europeanrelianceonimports The share of extra-EU imports in European consumption reached 80 per cent in 2016, against 71 per cent in 2007; indicating increasing reliance of European consumers
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be worth 27.56 bn by 2022. Coating and sizing chemicals were the largest consumed products category with a total worth of $6,353.5 million, accounting for over 30 per cent of global demand in 2015. Printing being the last step and, the popularity of printed fabric is increasing. The key players in textile chemicals market include: Covestro AG, Lonsen Inc., Archroma, BASF, Dow Chemical Company, Bayer AG, Huntsman International LLC and Sumitomo Chemicals.
sustainability
Industry on the green
challenge as sustainability gains ground Sustainability is the buzz word in global textile industry today. With growing awareness about the fashion industry’s huge contribution to environmental degradation, stakeholders are now taking responsibility and going the extra mile to reduce their carbon footprint
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sustainability
• Greenhouse gas emissions from textile production currently amount to 1.2 billion tonne annually • There is currently no sustainability legislation in fashion industry • Textile recycling salvages about 3.8 billion pounds of post-consumer textile waste (PCTW) each year • Companies are training their styling teams to adopt a circular approach to fashion • The Higgs Index offers standardised measures for a more sustainable value chain • Brands focus on repair rather than replace to increase sustainability
A new research from UNFCCC reveals, greenhouse gas emissions from textile production currently amount to 1.2 billion tons annually. This is more than the emissions of all international flights and maritime shipping combined. The fashion industry has increasingly been working on issues such as chemicals, circularity and equality but must also further address its impact on climate change. Maddy Cobbing from Greenpeace’s Detox My Fashion campaign points out the current rates of excessive production and consumption in the industry as a whole are probably outweighing any gains being made on eliminating hazardous chemicals. So comprehensively scaling down production remains the safest way to decrease environmental impacts, and, in the immediate term at least, the industry needs to take a more responsible approach and slow down the flow of materials as the first priority.
Recycling becomes popular As per US Environmental Protection Agency, the textile recycling industry salvages about 3.8 billion pounds of post-consumer textile waste (PCTW) each year. However, as the
Council for Textile Recycling (CTR) reports, the EPA has found that this accounts for just 15 per cent of all PCTW, leaving 85 per cent in landfills. In the US, 72 per cent consumers
In the US, 72 per cent consumers are concerned about the environment and feel motivated to take sustainable action, reveals a Cotton Incorporated 2017 Global Environment Survey. are concerned about the environment and feel motivated to take sustainable action, reveals a Cotton Incorporated 2017 Global Environment Survey. Additionally, 75 per cent consumers feel environmental change is real and requires adjustments in our behavior. The majority of Americans (65 per cent) say they recycle clothing or textiles, according to the Environment Survey. Recycling clothes catches up in the apparel retail industry
Adopting a circular approach Indeed, a few companies are training their styling teams to adopt a circular approach, envisaging from the design phase how products can be recycled. However, the majority still has a long way to go. Workshops for garment repairs are also thriving. While the study pointed out improving recycling of discarded products will still need a few more years, the use of RFID tags carrying
Companies which invest on environmental and social initiatives will earn themselves a ‘bonus’ in operating margin by 2030: rising to the new challenges will be worth the effort. information on the exact composition of the product seems to be the best way to recycle it. Analysts feel industry players will have to move forward collectively in order to truly step up to the next level. The main challenge identified by the ‘Pulse of the Fashion Industry’ report is that of leading as many
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sustainability
companies as possible on the road towards ecological and social change. To make comfortable progress, companies need to implement a system for full supply chain traceability, improve the way they consume water, energy and chemicals, and uphold and/or demand compliance to standards in terms of working conditions. In second phase, they should be able to source a responsible mix of sustainable materials, introduce a circular approach to business, promote improvements in worker remuneration and finally tap the opportunities provided by the electronic and digital revolution. All of these changes (and investments) need to be incorporated in business strategies. The report suggests, companies which invest on environmental and social initiatives will earn themselves a ‘bonus’ in operating margin by 2030: rising to the new challenges will be worth the effort.
Treating with
microfibers chemicals
A stream of other studies have also found microfibers in effluent from wastewater plants, in the digestive tracts of market fish, throughout riverbeds and in air samples. Although most research has focused only on synthetic fibers, natural fibers such as cotton and wool, and semi-synthetics such as rayon should not be totally ignored. Even though they degrade more quickly than polyester, they can be treated with relevant chemicals
that can move up the food chain if the fibres are consumed before they degrade.
Need for a sustainability regulation in fashion Besides the Modern Slavery Act, there is currently no sustainability legislation in fashion. The government’s options for regulation include a French-style “duty of vigilance” law, a ban on textile incineration, higher taxes for use of virgin materials, and levies based on the amount of waste produced. The British Retail Consortium (BRC) is also concerned about lack of enforcement. It believes the practice of unscrupulous suppliers paying textile workers in the UK below minimum wage is going unchecked, and is lobbying for action. Companies, who do not act until the government compels them to, face greater risks. So the time to act is now whether it is the PR, consumers or the regulation.
Companies, who do not act until the government compels them to, face greater risks.
Brands take up sustainability challenge Although sustainability initiatives pose a temporary financial burden on companies, not implementing them pose greater financial risks. PR disasters such as the collapse
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of the Rana Plaza factory in Bangladesh in 2013, or government intervention, for instance, could suddenly ramp up costs or impact sales. Furthermore, there is the risk of being overtaken by competitors who have adopted sustainable principles, as consumers who are increasingly well informed and demanding choose more responsible brands. M&S’ has adopted a Plan A initiative that includes sourcing all cotton from sustainable sources by April 2019, its shopping recycling partnership with Oxfam, and a focus on sustainable design as part of its Plan A 2025 commitments. The brand publishes a large amount of information on its website including the location of its factories for food and clothing, details on its
M&S’ has adopted a Plan A initiative that includes sourcing all cotton from sustainable sources by April 2019, its shopping recycling partnership with Oxfam, and a focus on sustainable design as part of its Plan A 2025 commitments. second- and third-tier suppliers across the supply chain, the location of its dye houses and the raw materials used.