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    Advanced Export Merchandising: Session 1: Introduction To Apparel Export Scenario

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    Ankur Pilania
    The apparel export industry is worth approximately $362 billion globally, with the largest importers being the EU, US, and Japan. China has emerged as the dominant exporter, accounting for over $250 billion in exports in 2008 due to its large factories, low labor costs, and government support. Bangladesh also has very low labor costs and is highly competitive but is prone to natural disasters. India exports around $10 billion annually but has higher costs and less scale than competitors. To remain competitive in this industry, countries must focus on low-cost basics as well as value-added and quick response capabilities.

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    Advanced Export Merchandising: Session 1: Introduction To Apparel Export Scenario

    Uploaded by

    Ankur Pilania
    32 views30 pages
    The apparel export industry is worth approximately $362 billion globally, with the largest importers being the EU, US, and Japan. China has emerged as the dominant exporter, accounting for over $250 billion in exports in 2008 due to its large factories, low labor costs, and government support. Bangladesh also has very low labor costs and is highly competitive but is prone to natural disasters. India exports around $10 billion annually but has higher costs and less scale than competitors. To remain competitive in this industry, countries must focus on low-cost basics as well as value-added and quick response capabilities.

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    The apparel export industry is worth approximately $362 billion globally, with the largest importers being the EU, US, and Japan. China has emerged as the dominant exporter, accounting for over $250 billion in exports in 2008 due to its large factories, low labor costs, and government support. Bangladesh also has very low labor costs and is highly competitive but is prone to natural disasters. India exports around $10 billion annually but has higher costs and less scale than competitors. To remain competitive in this industry, countries must focus on low-cost basics as well as value-added and quick response capabilities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppt, pdf, or txt
    32 views30 pages

    Advanced Export Merchandising: Session 1: Introduction To Apparel Export Scenario

    Uploaded by

    Ankur Pilania
    The apparel export industry is worth approximately $362 billion globally, with the largest importers being the EU, US, and Japan. China has emerged as the dominant exporter, accounting for over $250 billion in exports in 2008 due to its large factories, low labor costs, and government support. Bangladesh also has very low labor costs and is highly competitive but is prone to natural disasters. India exports around $10 billion annually but has higher costs and less scale than competitors. To remain competitive in this industry, countries must focus on low-cost basics as well as value-added and quick response capabilities.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
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    of 30

    ADVANCED EXPORT

    MERCHANDISING
    Session 1: Introduction to apparel
    export scenario
    HOW BIG IS THE APPAREL / CLOTHING
    EXPORT INDUSTRY?

    • Approx 362 billion dollars


    • 2.3% in terms of total merchandise exports

    Source: WTO (2008 data)


    THE APPAREL EXPORT PIE
    WHO ARE THE IMPORTERS?
    • EU
    • U.S.A
    • Japan
    US MARKET
    How did the apparel manufacturing
    industry evolve?
    • Originated in western markets
    • Rising labor wages
    • Technological advancements
    • Shifted to tiger economies
    • Now set up in low cost developing , third
    world countries
    THE CHINA STORY

    2008
    data
    Source:
    WTO
    Continuous rise of the Dragon
    What are they good at?
    What ticks for china?
    • Cheap labor
    • Bigger factories
    • Lax labor laws
    • Higher productivity
    • Good fabric base
    • Government backing
    • Hongkong
    Bangladesh
    THE EMERGING TIGERS
    Bangladesh is good at
    Bangladesh : Strengths & Weakness

    STRENGTH WEAKNESS
    • Lowest labor cost • Inadequate backward
    • Economies of scale linkages
    • Single largest industry in • Hand to mouth existence of
    Bangladesh apparel factories
    • Political clout of industry • Prone to natural disasters
    (BGEMA)
    • Longer working hours (10
    hrs / shift)
    • 10% corporate tax for
    apparel exporters
    • Low energy cost
    WAGE COMAPRISSION

    Hourly Banglad Nepal India Pakistan Srilanka China Indonesia Vietnam


    wages esh
    (Dollars 0.24 0.31 0.6 0.4 0.45 0.69- 0.4 0.4
    ) 0.89
    Bangladesh price competitiveness
    The European Behemoth-TURKEY
    • Primarily exporting to E.U
    • Location advantage
    • Cotton country
    • 10% of GNP
    • Home textiles: added advantage
    • Higher labor cost
    • Higher energy cost
    Central American heavyweight:
    HONDURAS
    • Entirely dependant on US
    • Primarily a knitwear manufacturing country
    • Losing market share to china steadily
    • Political disturbances
    • Natural disturbances
    What about us?
    10.17 BILLON
    DOLLARS IN 2009
    Growth rate of Indian apparel industry
    What’s hot from India?
    Indian apparel industry strengths
    • Diversified factories (Small lot to bigger
    orders)
    • Large labor force around 6 million workers
    • Large fiber base
    • Good fabric base
    • Good at high fashion garments
    • Flexible work culture compared to china
    Where are we lacking?
    • High labor cost
    • Strict labor laws
    • Low productivity
    • High capital cost
    • Multiple taxation
    • Fabric processing
    • Limited exploitation of economies of scale
    • Vertical integration
    Challenges faced by the Indian apparel
    industry
    • Recession
    • Ever falling prices
    • Dominance of china & Vietnam
    • Fluctuations in cotton price, fuel & exchange
    rate
    • Location disadvantage
    • Availability of skilled labor
    How Rupee movement affects our
    competitiveness
    How other currencies are faring
    against dollar?
    East Asian countries
    • Vietnam
    – 9.3 Bn dollar industry (2008)
    – US has removed anti dumping duty against
    Vietnam manufactured apparels
    • Indonesia
    – Good manufacturing base
    – Low import restrictions
    • Philipines
    – Peaked in 2006
    Our neighbors (Pakistan & Sri Lanka)

    Pakistan Sri Lanka


    • Cotton based • Actively backed by
    • Hosiery, knitwear & casual government
    outer wear • No woven fabric base
    • High productivity
    • Skilled labor
    • Bigger consolidated
    infrastructure
    • Duty free access to EU
    (might get cancelled due to
    human rights violation)
    Trends in apparel manufacturing
    • Lean retailing
    • Full package outsourcing
    • Globalised workforce
    • Reduced lead times
    • End of direct sourcing
    How to survive
    • Low cost in basics
    • Value added garments
    • Quick response

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