A new collaborated study by YCP Solidiance and Brother Machinery Asia highlights the importance of digital transformation in the global apparel manufacturing sector. It states, the transformation must start from the beginning in some cases with the setting up of factory machinery. The study charts the course towards an efficient, digitalised supply chain in the industry.

Importance of digitalization

The study mainly focuses on the Asia Pacific region -- the hub of global apparel manufacturing -- with key players like China, India, Bangladesh, Vietnam who have emerged as the sourcing centres for top apparel brands. China in fact, is the apparel manufacturing leader “with expertise, experience, modern infrastructure, efficient supply chain management and high productivity.” India on the other hand has come up as a strong competitor. Vietnam and Indonesia are emerging with their governments focusing on the segment. Sri Lanka, Pakistan, Bangladesh offer even cheaper alternatives.

The study states, these markets together hold the giant share of global apparel manufacturing industry worth $9.5 billion. With strong CAGR of around 5 per cent since 2016, the sector is expected to be worth $10 billion in 2021.

However, even though the numbers indicate growth, a closer look throws up an industry in crisis. “Low labour costs that make Asian markets so dominant in apparel manufacturing are rapidly on the rise – in China particularly and across ASEAN markets. At a more fundamental level, the sector remains primitive from a technology perspective, riddling it with inefficiency and subjecting it to all manner of risks,” says the study.

While factories are still labour-intensive, supply chains are fragmented this, at a time when efficiency at lower costs is being given precedence everywhere. Hence, the way forward is ‘digital transformation’. As Satoshi Kuriga, Partner, YCP Solidiance points out with business strategies becoming tougher and the high-cost of Asian labour markets, digitization is perhaps the only long term solution. He says, implementing advanced technology, such as integrated IoT systems, has increased apparel production by 5 per cent and cut cost and time by 88 per cent.

What’s more, the pandemic has made the situation worse with lockdowns across Asia, the apparel industry lost over 70 per cent of its functions and “decreased the total sewing machine operating hours in Bangladesh, India, Indonesia, and Vietnam to 27 per cent.” Therefore, digital transformation is the immediate necessity for factories in the region reflected in the marked increase in digital investments. The study states, with many starting their digital journey from scratch, a step-by-step approach will unfold.

Way forward with digitization

Digitization should begin with a few steps. First is to set up the hardware to automate basic functions in the production process. The hardware then needs to be backed up with advanced robotic and artificial intelligence technology, to efficiently coordinate the machines through data and training. Step three is to integrate the hardware and software function and implement Internet of Things (IoT) technology.

“Once these steps are complete, manufacturers can move on to the final stage of coordinating the entire supply chain ecosystem – from sourcing to retail – using technology such as blockchain to transparently record and monitor information as well as AI and data analytics to make the process more efficient.”

All this will add up to a digitized supply chain that improves efficiency and productivity, while minimising both costs and risks. “Such a setup would be a gold standard for fashion brands, and the race is on.”And with many brands wanting to move away from China in a post-pandemic market to mitigate risks will be looking at safer alternatives. And other countries in the region investing in digital transformation can fill this gap.

Pakistan’s textile exports increased by 7.7 per cent with knitted garments and hosiery taking the lead in first half of current fiscal 2021 compared to the same period last year. As per Faisal Mehboob Sheikh, Zonal Chairman Pakistan Hosiery Manufacturers Association (PHMA) and chief coordinator Adil Butt the country’s textile exports in Jul-Dec (2020-21) was $7.4 billion compared to $6.9 billion in same period 2019-20, a growth of 7.7 per cent.

Knitwear boosts textile exports

Sheikh points out one of the major textile products that contributed to positive trade growth was knitwear, which increased from $1.5 billion last year to $1.8 billion in the current year, a growth of 16.5 per cent. According to him Pakistan’s positive export growth for the fourth consecutive month in December 2020, is a vindication of government’s policy to keep the wheels of economy running during the pandemic. Knitwear, knitted garments and hosiery plays a crucial role in the country’s exports growth, as the industry continued to show its resilience during the pandemic. On a year-on-year basis, textile exports increased 22.7 per cent during December 2020 as compared to the same month last year. Exports during December 2020 were $1.4 billion against exports of $1.1 billion. On a month-on-month basis, exports from the country increased 9.2 per cent during December 2020 compared to exports of $1.2 billion in November 2020.

Based on these figures, the country’s trade deficit also increased 6.4 per cent during the first half compared to same period last year. Trade deficit during the first six months of current fiscal was $12.4 billion against a deficit of $11.6 billion last year.

And as Butt says, the comparatively good performance of value-added textile category proves it has been the main growth driver for the country’s overall exports. The value-added sector clocked in growth because of preferential access to European Union under the GSP+ scheme which can further be enhanced with government support.

He believes Pakistan needs to establish an Aggressive Marketing Plan for garment export to get maximum GSP-Plus benefits. He also emphasized the need for a taskforce, especially when the Chinese garment industry, with 30 per cent global apparel market share, is relocating. A regional taskforce could help determine issues being confronted by the industry and suggest measures to ensure its viability and competitiveness in the international market.

The first VDMA technology webtalk in 2021 to be held on January 21 will be on material efficiency and fibre recycling in textile spinning. Experts will give an overview of the recycling processes that can turn old clothes into high-quality yarns and fabrics.

Bettina Temath, Truetzschler Group will demonstrate how production waste from spinning preparation can be recycled. She will also present solutions to process recycled fibers made from postconsumer textile waste and explain how the best possible quality can be achieved.

Similarly, René Bucken, Saurer Group will share views on how the use of regenerated fibres increases the share of short fibres in the sliver which tends to decrease spinning mill efficiency. Saurer offers solutions for different materials and fibre compositions in order to optimize spinning for all kinds of fibres.

Michael Wolf, will show, using a specific project as an example, how high-quality yarns can be developed and produced from old clothing using blended fibers.

The US Cotton Trust Protocol welcomed its first Latin America-based members: Central America Spinning Works El Salvador, Cone Mills, Colhilados, Fabricato, Gama Textil, Global Textiles, Grupo Industrial Miro, Grupo Vivatex, Hilanderia de Algodon Peruano, Honduras Spinning Mills, Industrias Cannon de Colombia, Industrias Merlet, Industria Textil del Pacifico, Junior de Mexico (OGGI Jeans), Manufacturas Kaltex, MT Textiles, OA, Playeras Mark, Premium Knits, Quality Knits, Ropa Siete Leguas, SJ Jersey Ecuatoriano, Tavex, Textufil, Textiles Marie Lou, Textil del Valle, WT Sourcing and Zagis. Among other benefits, membership enables these mills and manufacturers to prove that the cotton fibre element in their textiles is more sustainably grown.

Gary Adams, President of the US Cotton Trust Protocol, in a statement said the textile industry works to improve the transparency in their supply chain that brands and retailers are asking for. The Trust Protocol is providing verified, reliable data about cotton growers’ responsible growing practices in six key areas – water use, greenhouse gas emissions, energy use, soil carbon, soil loss and land use efficiency – and shows how sustainability is constantly improving through the entire supply chain.

Mills and manufacturers who become members have access to the Trust Protocol credit system to validate consumption of cotton and associated credits. The combination of a unique credit accounting system and the Permanent Bale Identification (PBI) system enables brands to have transparency throughout the supply chain to finished product.

In December 2020, the Trust Protocol also announced GAP’s membership as part of their integrated sustainability strategy and to help achieve their commitment to use only 100 per cent sustainably-sourced cotton by 2025. December also saw the announcement of the first 10 US mills to join the Trust Protocol.

The US-based company, Skechers, will invest up to $279 million to expand its distribution facilities in China’s Taicang, Jiangsu province, this year. Eexpansion will help the brand meet surging demand in China. In late December, the company set up a distribution center in Taicang. The signing of the Regional Comprehensive Economic Partnership agreement and upgrading of e-commerce businesses during the COVID-19 pandemic has introduced a new market dynamic. Skechers found its current operational capacity will no longer meet the increased demand.

As Taicang has a well-developed container port and customs office, as well as a convenient location to connect many eastern Chinese cities, the Skechers distribution center will further enhance the company's overall supply chain competencies. The expanded facility will play a key role alongside the company's other businesses in building a more comprehensive logistics network in China and other markets, particularly in the Asia-Pacific region.

The company is studying the policy details of the RCEP and hopes to boost two-way trade of its products between China and the markets of the Association of Southeast Asian Nations. In addition to expanding presence in top-tier cities and working closely with domestic logistics service providers, Skechers will open more brick-and-mortar stores in China's lower-tier cities to reach more consumers.

In late December, Skechers forged a partnership with Shanghai Disney Resort to promote sales of its products at Shanghai Disneyland theme park.

As China has recovered from the first wave of the pandemic in an exceptional manner, Skechers saw its local sales jump almost 24 percent year-on-year in the third quarter of 2020. The company entered China in 2008, and now runs nearly 3,000 stores, including 150 super-large shops.

Clarks could soon be owned by ex-Olympic gymnast Li Ning’s investment arm Viva China, which aims to buy up 51 per cent stake in the British footwear retailer for a consideration $69 million (£51 million).

Viva had earlier helped facilitate the acquisition of business out of voluntary administration by funding a loan to LionRock, which allows Viva, to convert this debt into equity in Clarks. LionRock the founding Clark family would remain key shareholders in the business, and aims to help the business reposition for future long-term sustainable growth.

Clarks posted a $111 million loss in 2019 and called in accountants to navigate a restructure through voluntary administration last November. If the acquisition goes through it would be very substantial, but that so far no definitive agreement between Viva and LionRock has been reached. Last year Li Ning also took control of Hong-Kong listed apparel group Bossini through Viva, and announced plans to expand the business into Mainland China. According to reports, Li is a non-executive director at LionRock.

Fashion retailer Mango will enter homeware, home linen and home decoration market. After the pandemic shockwave, Mango managed to adapt and respond to new trends, like the boom in e-tail and high demand for casual outfits, and it now intends to capitalise in this new segment.

In a press release, Mango stated the brand has created a new line in order to extend its presence to the homes of its customers, and beyond their wardrobes. This will allow the company to enlarge its product range and offer customers an improved service, by enabling them to purchase complementary products. The group is keen to tap the current popularity of home decoration products, prompted by the lockdown, remote working and generally by the restrictions to people’s movements introduced in recent months, which mean potential customers are spending an more time at home.

Mango's new homeware range will be available from Q2 2021. To begin with, there will be a capsule collection of home linen products, featuring bed and bathroom linen and a series of textile products for the kitchen. The range will gradually expand, extending to other categories, such as tableware. Approximately 80 per cent of all products will be produced locally. The collection will be available in 20 European countries, and its articles can be viewed on Mango’s e-shop and at the label’s physical stores, on the tablets used by shop assistants.

As the drive for Covid-19 vaccination rolls out garment exporters in India have started getting orders once more in all major markets. This has been confirmed by top suppliers to international brands such as Zara, H&M and Primark. Fashion brands have started placing fresh orders for Summer/Spring, as they expect consumption in top European and North American markets to pick up in the next few weeks.

This comes months after shipments were kept on hold, orders cancelled and payments were put on hold, as global retailers were in distress due to high number of coronavirus cases in most countries which led to lockdowns and low shopper turnout. Global brands, which were mostly relying on digital channels until now expect shoppers to be back in stores by March or April, and so have started building inventory cautiously.

Pent-up demand and increased online sales are expected to give a boost to exports. The order volume, however, is nowhere close to the pre-Covid level as brands want to mitigate risk.

According to industry estimates, the global textile and apparel market was worth $1.9 trillion in 2019 and was projected to reach $3.3 trillion in 2030. Europe and the US contribute about 30 per cent to the total apparel market and hence the launch of vaccination in these two regions has led to the increase in number of international orders.

However, there has been a significant shift in demand from formal wear to casual wear. Since the pandemic began last year, the loungewear category of India's Rs 53,000-crore knitwear export industry has seen demand increase in the range of 15-150 per cent say exporters.

Similarly, the entire knitwear industry has witnessed this shift towards casual wear since the onset of the pandemic, with the export composition now changing from 50 per cent casual and 50 per cent formal to 70 per cent casual and 30 per cent formal.

After naming Anthony Ledru as the new CEO of Tiffany & Co, global luxury conglomerate, Louis Vuitton, has announced the appointment of David Ponzo as executive vice president for global commercial activities. This role was previously held by Ledru prior to his move to the American jeweller, which was acquired by the French luxury group earlier this month.

Since 2015, Ponzo has led Louis Vuitton's operations in Japan with his latest promotion; Ponzo will oversee Louis Vuitton's vast network of 460 stores, as well as its e-commerce platform.

The executive has more than proved his skills over the course of a career notable for its rich and varied international experience. This includes a range of management posts in Asia, at Omega, Swatch and finally at Louis Vuitton, where Ponzo became CEO and president for Japan in 2016, a role in which he appears to have attracted the attention of LVMH's top management.

Although denim industry engages in many wasteful practices and needs improvements throughout the supply chain experts feel cotton statistics claimed in most studies are both inaccurate and counterproductive. Transformers Foundation, a nonprofit organization for denim professionals seeking to make positive change, hosted a webinar featuring a panel of cotton experts who discussed the nuances that many global average figures fail to address.

The first claim by the World Wildlife Fund, which states that 2,700 liters of water are needed to make an average T-shirt, was contested by Simon Ferrigno, a freelance researcher and writer. Ferrigno said, this statistic is fairly meaningless. There is no global average, because there’s no global average cotton production. Since water is utilized in different ways depending on the region it’s impractical to calculate an average that’s used across the board. Throughout his research, Ferrigno has seen the statistic range from 2,000 to 20,000 liters of water needed to make a T-shirt.

Instead of numbers, Ferrigno notes the focus should be on whether or not the water that’s used in the process can be cleaned and repurposed for other needs. Ferrigno is of the opinion that water is not actually used; it’s borrowed. There is a total amount of water on the planet. We use that for cotton production or other uses, and it goes back into a water system.

It’s a concept used by mills as a way to significantly reduce water usage and make their products eco-friendlier. Vietnam-based denim manufacturer Saitex is known for its on-site water recycling methods, which remove indigo dye and leave behind water that is safe for human consumption—some of which is even repurposed to brew coffee.

Experts say the numbers are inaccurate as the complexities surrounding water recycling and how that affects calculations. The panellist noted that cotton is essential, as the crop employs millions of people and feeds numerous species. CIRAD, the French Agricultural Research Center for International Development, calculated more than 1,300 insect and animal species that feed on the crop and rely on it for survival.

Keshav Kranthi, head of technical at The International Cotton Advisory, Committee, also explained that cotton is not as water-intensive as many sources infer, noting that the majority of cotton crops around the world rely on rainwater. Calling the crop resilient, according to him many farmers throughout water-deprived regions in Africa and India prefer to grow cotton as a result.