Changing Scenario of Global Fashion Industry By J.N.Vohra, B.Text., M.Tech (Text.), F.I.E., C.Eng (I), M.I.M.A.

Global trade in textiles and apparel is projected to be US$ 655 Billion by 2010 from its

current level of US$ 440 Billion. At current level, the industry represents about 6 % of

the entire world exports. The apparel sector represents 57 % of the world’s textile &

apparel trade. Development in textile and clothing industry has direct impact on apparel

based fashion.

United States and European Union markets dominate the global textile and clothing trade

accounting for 64% of clothing and 39% of textile market, and imports about 30% of

garments, mainly from developing countries.

Changing Global Scenario Over a period of time, many changes have taken place in the world scenario, which

influenced to a great extent the fashion scenario of the globe. Some of these significant

changes are varying preferences of use of fibre types, innovative trends in fibre

production, shift of production bases from developed countries to developing countries,

and quota abolition.

For example share of synthetic fibres in global fibre consumption increased from less

than 1% in 1950 to more than 50% by 2006 and had its impact on production trend of

clothing and fashions. The projected production of polyester fibres, the main constituent

of synthetic fibres is projected to be 36 Million Tons by 2010.

Even though production of polyester fibre increased, the consumption of cotton,

particularly in US & EU, the main importing countries also increased as stand alone

cotton products; apparel and home textiles. Long-term projections suggest that world

cotton consumption will reach 125 million bales (170 Kg each) in 2010 from its present

level of 112 million bales and the consumption of cotton will continue to expand at an

annual rate of 2.4%.

Trade liberalization (quota elimination) for textiles and clothing had larger than average

impact on cotton products because 40 percent of net apparel imports in US and EU are

made of cotton rather than polyester, wool or other fibers. The share of cotton

consumption in these major importing countries will increase in coming years. This will

be to the advantage of developing countries since they have traditionally been more

competitive in cotton-based products. However, in order to have competitive edge

continuously, Asian developing economies, particularly China and India, would need to

design cotton products to add value.

Innovative trends Over the years, scientists have researched new methods to incorporate some of the good

features of man-made fibres into natural fibres. Now, shrink-proof, wrinkle-free, soil-

resistant, stain-resistant, and flame-resistant cotton apparel are making inroads in the

domain of fashion.

Cotton Synthetic Products Products

Moisture Wrinkleabsorbancy Free

Beathabiity ShrinkProof

Innovative Trends

On the other hand, fibre producers have successfully engineered man-made fibre products

comparable to natural textiles in its core properties, such as breath ability and moisture

transportation. For example, some newly developed polyester fibres provide comfort

equivalent to natural fibre.

To the fashion world, man-made fibres are now available with antibacterial properties

that inhibit the growth of a broad spectrum of bacteria, fungi and yeast. End uses include

fashion sportswear, children wear, active wear, inner wear and home furnishings.

Innovative trends in both natural and man-made fibres are now routinely penetrating the

global fashion industry.

Shift of Production Bases

Like many other sectors, the textile and clothing industry has been greatly affected by the

phenomenon of globalisation. Historically, even before globalisation dawned in, the

development of textiles and apparel manufacturing has been an important step for

industrialization of many countries.

The labour intensive clothing industry have been shifting its businesses from western

countries to Japan in the 1950s, to Korea and Taiwan in the 60s/70s, to ASEAN countries

in the 80s/90s and currently to China and India and the trend continues.

Despite trade restrictions, the textile and apparel businesses responded to competitive

pressures in terms of relocation of manufacturing capacities to low cost producing

countries also restructuring e.g. increased mergers and acquisitions to face the global

competition,.

Recently, two of the largest ‘home textile’ players; Pillowtex and Westpoint Stevens in

US closed down their manufacturing facilities. After the closure of these two giants,

Indian based Welspun and Abhishek Industries, manufacturing terry towels almost

doubled their capacities and more projects are being put up in India. Similarly, top US

producers of denim fabrics in the global market, and many International brands of Jeans

shifted their businesses to developing countries.

Simultaneously, the textile & clothing trade has been growing at a faster rate than its

production in the developed countries. In order to meet their ever increasing requirement

for home consumption, developed countries have been relocating their production bases

or resorted to outsourcing from developing countries.

A significant proportion of this relocation of business has been to Asia due to its

significant labour cost advantage. This also influenced the consumption pattern and

fashion scenario in the developing countries.

The economics of comparative advantage favors production of clothing in lower income

countries. Market forces will continue to influence decisions about location that will

undoubtedly reshape the landscape of textile based apparel fashion in coming years.

Thus the success of exporting countries would now depend on their domestic policies,

quality of infrastructure, efficiency level of production and delivery systems, and how

fast these countries restructure the textile & clothing sector to meet the Global standards.

Impact of Quota phase out After complete phase out of quotas, the developing countries are experiencing increase in

business, including, Bangladesh, China, Hong Kong, India, Indonesia, Korea, Pakistan,

Philippines, Sri Lanka and Thailand.

Most analysts conclude that China and India will come to dominate world trade in textiles

and clothing; market shares for China alone has been estimated at 50 per cent or more.

Although China is likely to become the 'supplier of choice', experts feel that other

developing economies, particularly, India would also benefit as the overseas importers

would try to mitigate their risk of sourcing from only one country.

The removal of MFA quotas has and will continue to affect the geographic distribution of

businesses and industrial production. The most important point for countries to be able to

reap post quota elimination benefits is that they should fully understand the changes that

occurred in the global context, mainly advancements made in the production technologies

and the new paradigm of production, based on short delivery time, and regional

strategies.

Asian Scenario

Developing economies of South Asia has been growing by 7.0 percent in 2006, more than

twice as fast as high-income countries (3.1 percent), with all developing regions growing

by about 5 percent or more.

Demographic trends will be a major driver of future events in Asian countries. The

Earth’s current population of some 6.5 billion is expected to rise to 8.0 billion by 2030.

About 60 percent of the world’s population lives in Asian countries

The largest populated country in the world, China, will see its population continue to

grow, but at a slower pace than the rest of the developing world. Various studies by

expert groups suggest that with more rapid population growth, India is likely to surpass

China as the world’s most populous country by 2030. Thus the largest contribution to the

nearly 1.5 billion increases in the developing regions will be attributed to India,

representing 320 million additional persons.

By 2008, Asia’s economy is expected to grow 30 percent faster than the rest of the world.

Asia’s potential is underlined by the fact that many global businesses based in

industrialized economies are now supported by the Asian region’s flourishing software

and service industries and are reliant on products and components manufactured in Asia.

Many developing economies in Asia are re-emerging and will overtake developed nations

by 2025.

Therefore, Asia’s consumption trend will drive fashion trend and world’s consumption of

fibres. India has also seen above-average economic growth in recent years, driving higher

clothing consumption. India’s economy and consumer spending are expected to rise

continuously. So, to be truly global for setting up businesses, Asian developing

economies are the destination, and India is one of the fast developing economies.