Vietnamese apparel companies have been working hard this year to fulfill orders in order to reach the target of $47 billion in exports, thanks to the benefits of free trade agreements. They also plan to invest in modern technology to increase efficiency and boost worker incomes.

However, global apparel demand is expected to decrease by nearly 5 per cent annually this year, resulting in a decrease of 25-27 per cent in orders. Major importers of Vietnamese apparel, including the US, China, and South Korea, have shown signs of lower demand since October 2022. Meanwhile, the European Union and Japan have maintained positive growth, albeit at a lower rate than previous months.

In order to achieve sustainable development, Vietnam Textile and Apparel Association (VITAS) intends that the sector will continue to call for investment in the material supply chain, building sales solutions, and developing automation, digital governance, a transparent business environment, and a high-quality workforce.

The sector faces intense competition from Bangladesh, India, and Indonesia, particularly in products with simple designs. Despite this competition, the sector can still produce mid and high-end products, which is one of its advantages to boost exports. However, it is expected that 30-35 per cent of apparel makers will suffer from a shortage of orders, while the remainder will face price pressure.

Domestic textile firms have suggested that the State adjust policies and mechanisms flexibly, particularly those related to credit and foreign exchange rates, in order to improve their competitiveness.

In 2022, the textile and apparel industry in the United States experienced a significant increase in imports and exports. According to US government data, textile and apparel imports into the USA were worth $132.2 billion, exceeding the figure of $127.7 billion recorded in 2019. Meanwhile, textile and apparel exports topped the $30.4 billion mark, which was a considerable increase compared to the $22.1 billion recorded prior to the pandemic. This represented a growth of 37.5% over 2019.

China was the leading supplier country, with a market share of 24.7 per cent and an order value of $32.7 billion. Vietnam was China's first competitor, with a growth rate of 27 per cent over a year, resulting in an export value of $19.6 billion. India was third with $11.1 billion, up by 12.2 per cent. Bangladesh, Indonesia, and the European Union followed, with export values of $10 billion (up 35.4 per cent), $6.2 billion (up 36.7 per cent), and $5.7 billion (up 13.6 per cent), respectively. Cambodia also saw a significant increase in imports, growing 31.43 per cent to $5.2 billion, overtaking Mexico ($4.8 billion, up by 10.2 per cent) and Pakistan ($4.7 billion, up by 12.9 per cent).

On the export side, North America accounted for 51 per cent of orders shipped from the USA ($12.8 billion), with $6.8 billion going to Mexico (up 9 per cent) and $5.9 billion (up 11.1 per cent) going to Canada. US textile/apparel exports to the EU were worth $2.2 billion, equivalent to a 16.7 per cent increase that made European orders reach an 8.1 per cent market share. Honduras followed with $1.7 billion (up 22.55 per cent), and China with $798.7 million, down 5.8 per cent.

The US textile and apparel industry's sustained buoyancy contrasted with the European industry's hit by the repercussions of the invasion of Ukraine and the inflation it has triggered on the continent. The United States played a leading role in the renewed growth of international textile and apparel trade since 2021.

The main international trade flow for apparel in 2021 was exceptionally not the one between Asia and Europe (worth $117 billion), but that between Asia and the Americas, worth $124 billion. This was mainly driven by the USA's post-crisis demand rebound.

The Indian textile industry, which relies heavily on cotton, has faced numerous challenges due to the removal of cotton from the Essential Commodities Act since 2007. Price volatility in cotton futures trading on the MCX platform has had a severe impact on the industry in recent years. In response to these challenges, Piyush Goyal, the Union Minister of Textiles, earlier had established a Textile Advisory Group to address the issues facing the industry.

The Product Advisory Committee made several recommendations to mitigate the challenges, including the reconstitution of the MCX Cotton Product Advisory Committee to benefit all stakeholders and curb speculation. Based on these recommendations and the approval of SEBI, MCX launched a new contract on February 13, 2023. A workshop was conducted on February 27, 2023, at The Residency Hotel, Coimbatore, to create awareness among stakeholders. The workshop included presentations on cotton hedging and cotton contract specifications.

The revised cotton contract specifications have taken into account the concerns of stakeholders across the textile value chain, including farmers, ginners, traders, spinning mills, downstream sectors, and exporters who often face price volatility. The new contract specifications are expected to bring more volume of cotton into trade, increase liquidity, and benefit all stakeholders.

Chairman of CITI and Chairman of Product Advisory Committee of MCX, T.Rajkumar and SIMA Chairman, Ravi Sam, advised all stakeholders to actively participate in the MCX cotton futures trading to reduce the risk of cotton price volatility. They hoped that the new contract specifications would increase physical transaction and lead to more spinning mills participating in the market, and also hoped that two more pending specifications in the MCX cotton futures would be reduced in the coming months to control speculation in the price.

Karl Mayer North America, a leading textile machinery manufacturer, has announced the appointment of Mariano Amezcua as its new President. Amezcua, an industry veteran with more than 25 years of experience, will oversee overall business operations and strategic initiatives for the American subsidiary of the Karl Mayer Group.

Amezcua has a solid track record in the textile industry, having delivered Sales and Professional Services for industrial automation and software applications. His primary focus has been on developing and implementing manufacturing strategies for Cut & Sew Operations in various sectors, including Automotive, Furniture, Technical Textiles, and Fashion. He previously served as President & CEO for DAP America, Inc.

Amezcua expressed his excitement in joining the KARL MAYER North America team and contributing to the company's growth and success. He praised the team's talent and motivation to provide advanced technologies that offer superior performance for their customers.

Amezcua succeeds Tony Hooimeijer, who led Karl Mayer North America for nearly two decades. Hooimeijer will retire on March 1, 2023. The appointment of Amezcua is expected to bring fresh perspective and leadership to the American subsidiary of the Karl Mayer Group.

Based on the latest data, China's textile and apparel exports in 2022 totaled $323.5 billion, showing a slight increase of 0.2 per cent compared to the previous year. However, this growth was much slower than that in 2021. Garment exports decreased by 0.23 per cent YoY to $175.4 billion in 2022, while textile exports increased by 0.82 per cent to $148.1 billion. The slowdown in growth was attributed to the interest rate hike by overseas governments and the economic recession. Despite this, the overall textile and apparel exports still showed a significant increase of $51.6 billion or 19.0 per cent compared to 2019 and $46.3 billion or 16.7 per cent compared to 2018. In terms of export structure, textile exports outperformed those of apparel.

When looking at specific varieties, cotton and chemical fiber products were identified as the two most important export categories. Although overall exports remained stable last year, there were changes in the export structure. The export volume of chemical fiber products was found to be larger than that of cotton products. However, it is noteworthy that the exports of woven garments made of chemical fibers performed relatively poorly among overall chemical fiber exports.

Changes in export destinations were also observed. The top 10 destinations for China's textile and apparel exports in 2022 and 2021 were compared, revealing that the proportion of the US, Japan, South Korea, the UK, Germany, and Russia declined in 2022, while the share of Vietnam, Bangladesh, Australia, Malaysia, and Kyrgyzstan increased. In general, the proportion of traditional markets decreased significantly, while that of emerging countries increased meaningfully.

Cambodia's apparel exports to neighboring countries such as Thailand, Singapore, and Malaysia have seen impressive growth, with shipments to Thailand and Malaysia increasing by more than 40 per cent in 2022, while Singapore registered a mild growth. This growth in neighboring countries has compensated for slower shipments to the West.

In particular, Cambodia's apparel exports to Thailand have recovered in 2022, reaching $57.604 million, up from $41.010 million in 2021. However, exports to Singapore experienced a downward trend in 2021, falling to $50.700 million from $156.221 million in 2020, before recovering to $51.625 million in 2022. Similarly, exports to Malaysia registered negative growth since 2019, but in 2022, they increased to $50.435 million until November, a 50 per cent increase from the previous year.

Cambodia's apparel exports to neighboring countries have been inconsistent in recent years, with fluctuations in growth and decline. However, the significant growth in 2022 in Thailand and Malaysia is a positive sign for Cambodia's apparel export industry, which can benefit from focusing on neighboring markets.

Bangladesh has turned its focus towards India for importing man-made fibre yarn and fabric instead of China.

Competitive pricing, improved lead time with the opening of two new land ports, and growing global demand for this key raw material for apparel have contributed to this shift in focus. The United States' anti-China stance may have also played a role in Bangladesh's shift towards India for man-made fibre.

According to industry stakeholders, the move towards alternative sources for raw materials will help support the growth of the man-made fibre industry in Bangladesh and reduce dependence on China. The Bangladesh government's decision to allow the import of man-made yarn and fabric through Benapole and two other new land ports has also facilitated this shift.

The global market for man-made fibre clothing is steadily increasing while demand for cotton made clothing is decreasing. However, Bangladesh's reliance on cotton-based apparel exports accounts for 72%, while man-made fibre apparel accounts for 24%. According to a research report by Research and Policy Integration for Development (RAPID), the apparel market for man-made fibre will continue to grow larger than that of cotton in the coming years.

While local textile mills supply about 65 per cent of Bangladesh's cotton-based garments, according to RAPID's calculations, man-made fibres account for only 15 per cent. However, industry experts feel that this share will decrease as demand for man-made fibre increases.

BGMEA believes that imports from India will likely double in the next five years but emphasizes on increasing local capacity

The fact that celebrity endorsements can make or break a company is now a hot topic of discussion after Adidas cancelled its partnership with American rapper and fashion designer Ye - formerly known as Kanye Wes. He was the face of Yeezys signature brand and the partnership was cancelled after a series of antisemitic comments bringing public outrage. Now, the German sportswear company could lose around $1.3 billion in revenue in 2023 if it is unable to sell its existing Yeezy stocks after the partnership cancellation in October 2022.

Business challenges surmount

Adidas’s operating profit would drop by about €500 million if the company fails to shift the products in some other way. Sales figures may decline at a high single-digit rate this year. Unsold Yeezy’s add up to a whopping $1.3 billion and just letting go of its remaining Yeezy products, could further hike the loss figures.

With a pair of Kayne West’s signature chunky rubber Yeezy 350 V2s selling for around $220, which was further resold at a price that is much higher than the at retail price, this partnership had rescued Adidas while creating an all-new brand image and level-pegging field with competitors Nike’s Air Jordans. However, following Ye’s series of pro-Nazi tirades, the hope that Yeezy shoes would account for around 7 per cent of all Adidas sales in 2022, was gone with the wind.

After this fallout, many companies such as S&P Global Ratings that looks at a company’s ability to pay back borrowings, have cut off both their long and short-term credit ratings for Adidas and downgraded its debt ranking for Adidas from ‘A+ to A-’ with the warning that this score could fall again soon.

As per S&P “Adidas faces a multitude of business challenges, including the termination of its Yeezy partnership, ongoing competitive pressures in the Chinese market, and a contraction of consumer demand in Western countries. Adidas faces a multitude of business challenges, including the termination of its Yeezy partnership, ongoing competitive pressures in the Chinese market, and a contraction of consumer demand in Western countries.”

Sustainability issues to be addressed before discarding

Besides facing financial losses, Adidas is also in an ethical dilemma about how to discard this infamous brand of shoes without triggering another outrage over the social impact and sustainability issues. Footwear industry experts opine Adidas cannot just simply discard the shoes but could maybe use this as an opportunity to set a new standard of practice by being fully transparent and taking control of this unique predicament that may later affect other brands with celebrity endorsement.

Adidas is known for launching products that aim at repurposing waste and its Adidas Terex Futurecraft loop Anorak, made of recycled ocean plastic, is extremely popular in the rugged outdoors. Analysts feel, they could use Yeezys to test similar new innovative products as this material could be perfect for testing, especially since the material composition and how it can be recycled is crucial information known to Adidas.

Although Adidas can set up new collections that showcase the brand's long history or even rename and resell the collection in a socially approved way, the fact remains that Adidas will find it harder to repay its debts and its brand's name has been tarnished. Celebrity endorsements might be a great way to build up brand appeal, but sometimes the shoe pinches where it hurts the most, and this Adidas partnership fallout saga is a learning process for other premium brands in the apparel segment.

The global men’swear market is growing by six per cent a year. Men’s wear refers to clothing that is specifically designed for male consumers.

The escalating product demand on account of the growing fashion consciousness and awareness of the importance of personal appearance among men is primarily driving the men’swear market. Besides this, the expanding e-commerce industry and the rising popularity of purchasing clothes through online shopping platforms, as they save time, offer convenience, and provide several diverse options, are further augmenting the market growth. Apart from this, the introduction of ecological clothing made from organic materials in place of synthetic fabrics that can cause skin allergies is also catalyzing the global market.

Moreover, the launch of specialized men’swear sections by premium brands is acting as another significant growth-inducing factor.

Uzbekistan is reforming its textile and clothing industry.

Credit lines for a period of ten years, with a three-year grace period, at a rate of four per cent per annum, will be opened in commercial banks for projects for the production of fabrics, carpets, finished garments and knitwear, dyeing and finishing. The following conditions must be met for preferential loans:export of 50 per cent of the total volume of products (in case of non-compliance with export obligations, the interest rate during the grace period increases to five per cent);participation of own funds, including buildings and structures, working capital in the amount of at least 30 percent; and absence of overdue debts on credit obligations. The banks’ margin for preferential loans is set at one per cent.

In addition, commercial banks will provide loans for a period of 24 months, including a six-month grace period and with a bank margin not exceeding two per cent. The requirement of a monthly advance payment for electricity consumption to textile and clothing and knitwear enterprises has been abolished.

Textile and clothing enterprises will be able to transfer funds abroad up to a certain amount without separate solutions for creating trading houses and shops.