Apparel Market Outlook 2013:

Global & U.S.

Dam Huy Binh (Daniel)

E damhuybinh@gmail.com

M (+84) 90 273 6863

Apparel Market Outlook : Global & U.S.

GLOBAL APPAREL MARKET OUTLOOK

• Subdued medium term GDP growth rate to 2015 for major consuming

economies – expected less than by 5%, except China and India

• Steadily reducing share of apparel and footwear in household

consumption in EU and in U.S.

• Growth rate of apparel market combined by CAGR (Compound Annual

Growth Rate) by 2020:

• World : 4%

• Japan, EU, US : 2%

• Brazil, China, India : 8%

• Rapid rise of e-Sales

P2 Apparel Market Outlook : Global & U.S.

TOP 15 WORLD FASHION BRANDS BY REVENUE IN 2012

3.48 3.68 3.79 3.80 4.51 4.67 4.76 6.04 9.71

11.83 11.91 15.65 15.83

18.82

37.14

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

USD Billion

P3 Apparel Market Outlook : Global & U.S.

2012 GLOBAL APPAREL MARKET SIZE BY REVENUE –

WHOLESALES TRADE

51,689

14,109

2,513

2,529

583

21

22

- 10,000 20,000 30,000 40,000 50,000 60,000

Sales Revenue Break

< USD 1M

USD 1M - 5M

USD 5M - 10M

USD 10M - 50M

USD 50M - 500M

USD 500M - 1,000M

USD 1,000M - 10,000M

Wo

rld

wid

e

16,038

4,672

1,052

1,035

257

12

11

- 4,000 8,000 12,000 16,000

Sales Revenue Break

< USD 1M

USD 1M - 5M

USD 5M - 10M

USD 10M - 50M

USD 50M - 500M

USD 500M - 1,000M

USD 1,000M - 10,000M

Wo

rld

wid

e

Men’s & Boy’s Clothing Women’s & Children’s Clothing

Worldwide: +163,000 companies Worldwide: +78,000 companies

P4 Apparel Market Outlook : Global & U.S.

2012 GLOBAL APPAREL MARKET SIZE BY REVENUE – RETAIL

TRADE

45,995

5,236

393

355

132

17

11

1

0 10,000 20,000 30,000 40,000 50,000

Sales Revenue Break

< USD 1M

USD 1M - 5M

USD 5M - 10M

USD 10M - 50M

USD 50M - 500M

USD 500M - 1,000M

USD 1,000M - 10,000M

> USD 10,000M

Wo

rld

wid

e

139,136

6,440

602

608

259

42

30

5

0 50,000 100,000 150,000

Sales Revenue Break

< USD 1M

USD 1M - 5M

USD 5M - 10M

USD 10M - 50M

USD 50M - 500M

USD 500M - 1,000M

USD 1,000M - 10,000M

> USD 10,000M

Wo

rld

wid

e

Men’s & Boy’s Clothing Women’s & Children’s Clothing

Worldwide: +84,000 companies Worldwide: +224,000 companies

P5 Apparel Market Outlook : Global & U.S.

Rising costs – Raw materials

– Wages

– Energy

– Logistics

– Exchange risk

KEY CHALLENGES

In most manufacturing countries, costs (minimum wage, inflation, utility costs, currency exchange) continue to rise faster than efficiency gains. Our costs have risen considerably over the years and right now there is more garment manufacturing supply than demand, which increases competition -- Roger Lee, Chief Executive of TAL Group --

We will continue to see big wage pressure in supply countries. Countries where we operate, or which are competitive in apparel supply - like China, Vietnam, Indonesia, Bangladesh, Burma and Cambodia - will all have double-digit labour cost inflation. This puts extra pressure on manufacturers because apparel is not increasing in price in the countries that we sell to.

--Andrew Lo, CEO of Crystal Group (one of Asia's largest apparel manufacturers, producing more than 230million

garments a year for Victoria's Secret, Levi's, A&F, H&M, M&S,

Uniqlo, JC Penney and Gap) --

P6 Apparel Market Outlook : Global & U.S.

• Look at how best to capitalize on trade preferences like duty-free arrangements;

• Need more hard skill knowledge. Need people that know the processes and equipment at ground zero;

• Focus on adding value through design, innovation and branding to protect margins; and the use of technology to integrate the multichannel experience;

• Manage inflationary trends: work much closer for the entire supply chain, eliminate waste and improve overall efficiencies

KEY TRENDS IMPACTING GLOBAL APPAREL MARKET

P7 Apparel Market Outlook : Global & U.S.

KEY TRENDS OF GLOBAL APPAREL SUPPLY CHAIN

P8

Consumer

Retailer

Wholesaler

Manufacturer

Consumer

Retailer

Wholesaler

Manufacturer

Consumer

Retailer

Wholesaler

Manufacturer

Past Present Future

• More complex

• Further pressure on shortened delivery time

• Increase number of SKU’s and lower order quantities per SKU

Apparel Market Outlook : Global & U.S.

United States Apparel Market Opportunities For Vietnam Exporters

P9 Apparel Market Outlook : Global & U.S.

U.S. 2012 IMPORT OF TEXTILE & APPAREL BY SPECIFIC ECONOMY

COUNTRY GROUP

ASEAN,

USD 18.5B, 18%

EU, USD 3.8 B,

4%

NAFTA, USD 6.0 B,

6%

Rest of the World,

USD 72.7 B, 72%

2012 U.S. Import Revenue of Textile & Apparel from Worldwide : USD 100.93 B

• Apparel: USD 76.81 B

• Non-apparel: USD 24.12 B

B-Billion

P10 Apparel Market Outlook : Global & U.S.

U.S. 2012 IMPORT OF APPAREL & NON-APPAREL BY SPECIFIC

ECONOMY COUNTRY GROUP

ASEAN, USD 17.3B,

23%

EU, USD 1,93B,

3%

NAFTA, USD 4.21B,

5%

Rest of the World,

USD 53,4 B, 69%

Apparel

ASEAN, USD 1.16 B,

5%

EU, USD 1,85B,

8%

NAFTA, USD 1.83B,

7% Rest of the

World, USD 19.3 B,

80%

Non-Apparel

P11 Apparel Market Outlook : Global & U.S.

U.S. 2012 IMPORT OF TEXTILE & APPAREL BY COUNTRY

China, USD 40.58 B,

40%

Vietnam, USD7.66B,

8%

India, USD 5. 90B,

6%

Indonesia, USD 5.2 B,

5.2%

Bangladesh, USD 4.6B,

4%

Mexico, USD4.63 B,

4.8%

Pakistan, USD 3.0 B, 3%

Rest of the World, USD 29.34 B,

29%

P12 Apparel Market Outlook : Global & U.S.

SIZE OF U.S. APPAREL IMPORTERS FOR MERCHANT

WHOLESALES

Total: 1,243 companies Total: 1,622 companies

Men’s & Boy’s Women’s & Children’s

P13 Apparel Market Outlook : Global & U.S.

SIZE OF U.S. APPAREL IMPORTERS FOR RETAIL TRADE

Total: 384 Total: 952

Men’s & Boy’s Women’s & Children’s

P14 Apparel Market Outlook : Global & U.S.

Sources: • ITMF-International Textile Manufacturers Federation

• OTEXA – Offices of Textiles & Apparel

• D&B HOOVERS

P2 Apparel Market Outlook : Global & U.S.