The prospect of Myanmar continuing to be an apparel-sourcing base for many big global brands has been an intense topic of debate since the military coup in 2021.The labor-intensive garment segment is one of Myanmar’s largest employment segments that keeps the country going and accounts for around 30% of the country’s total exports in 2021. However, the growing concerns about the dismal working conditions in Myanmar factories and labor abuses which have worsened under military rule have led to many Western retailers being divided as to whether they will continue trade or not.

Global retailers cite abuse of human rights for exiting

The renowned low-priced fast-fashion European retailer Primark, which sources garments such as raincoats and parkas from around 25 factories in Myanmar, will be exiting soon as it is finding it impossible to ensure the human rights and safety of its workers after the coup which has left the country in turmoil. Primark’s decision follows the departure of other European brands, including Aldi South Group, C&A, and even the giant general retailer of Tesco. Over the past 20 months, some others too, including Norwegian telecommunications firm Telenor ASA and oil-and-gas companies Total Energies SE and Chevron Corp. Aldi South, which also sells products such as cargo shorts and running shoes, have decided to exit. Others such as the European brand along with Tesco have said that political developments and advice from global unions have led to their decision for exiting. Myanmar laborers have no scope to voice grievances since the political leaders stifle democratic institutions, have arrested union leaders and threatened workers' organizations who are seeking to provide human rights.

Others stay on to help workers earn a livelihood

While some global retailers are leaving due to labor abuse issues, others are staying on to take advantage of Myanmar’s low wages for themselves while helping the lower-income bracket workers to preserve their jobs amid political turmoil. Companies such as H&M, Zara-owner Inditex, and Uniqlo-parent Fast Retailing Company are staying on with the premise that many workers in Myanmar depend on international companies for their livelihood.

“If they stop buying, the worst affected will be laborers from the garment industry,” said Ye Naing Win, general secretary of the Cooperative Committee of Trade Unions, a Myanmar labor organization. The Ethical Trading Initiative report estimates that 320,000 workers would lose employment and hit poverty levels or have a drastically reduced income if European buyers withdraw. It didn’t take a position on whether brands should stay or go.

Although some of the big western retail brands stopped sourcing garments after the coup and relocated to other countries like Bangladesh and India, they have again restored purchases in the post-pandemic period. According to United Nations trade statistics, apparel exports to the European Union, the U.S., and Japan in the first half of 2022 were up 29% from the same period last year and around 12% higher than in 2020, which was the year before the coup, However, this quick recovery is in stark contrast to the broader Myanmar economy, which is 13% smaller than it was in 2019, With Myanmar’s outlook as an apparel sourcing base remaining uncertain, it is time that India uses this opportunity to its advantage, as the Western retailers are looking out for other alternatives in Asia.

Sunil Patwari is chairman of Cotton Textiles Export Promotion Council (Texprocil). Patwari is a chartered accountant and an alumnus of Indian Institute of Management, Ahmedabad. He is the managing director of Nagreeka Exports.

Texprocil, an apex export promotion body, provides assistance to Indian exporters of cotton textiles as well as supports importers/international buyers sourcing these products from India. Texprocil has completed 68 years. A commemorative function was held at its head office in Mumbai in October2022. Seminars and presentations on topics like sustainability, circularity and traceability were held in the hybrid format during which speakers from India as well as overseas participated. Texprocil released its new brochure highlighting the latest product offerings in cotton textile products that conform to sustainability and circularity norms as per international standards. The council has already launched the General Certificate of Conformity (GCC) program along with Control Union for the Traceability of Indian Farm Cotton. More than 50 companies have already registered as members of this program.

Last year was full of challenges as well as opportunities for the Indian textile and clothing industry. Exports of cotton textiles (including cotton) grew by 54 per cent while overall textile andclothing exports from India grew by 40 per cent in the financial year 2021-2022.

Imports of cheaper cotton garments from China may impact the entire textile value chain of India. Traders want quick action to protect the domestic industry, trade, and farmers.

Recycled yarn prices have remained stable. It is mainly used in home furnishing and to make coarse fabrics. Demand for recycled yarn is yet to pick up as there were no activities on the export front. Exporters are struggling to get new orders due to the economic slowdown in foreign markets. The ban on coal-based dyeing units in Panipat has been relaxed till the end of December this year, thus recycled yarn supply remained stable in the market.North India’s cotton yarn market witnessed a mixed trend. Prices remained stable in Delhi, while Ludhiana noted a fall of Rs5 per kg due to imports of cheaper cotton garments in India. The cotton yarn market is not getting support despite an improvement in cotton prices.However mills are making efforts to increase yarn prices.

North India’s cotton prices increased due to the low crop estimate and cloudy weather. North India’s cotton production estimate for the new marketing season has been lowered by around ten lakh bales. The region comprises Punjab, Haryana, upper Rajasthan and lower Rajasthan.

Turkey has a target of becoming one of the top three textile exporting countries in the world.

The country is already one of the top five textile exporting countries and overtook countries like South Korea and Italy to claim the fifth spot.The industry has increased its share in global textile exports to an all-time-high of three percent. Turkish textile companies are exporting their products to more than 200 countries.

Turkish suppliers want to be recognised not only for their manufacturing but also for their in-house brands.Turkey is well known for near-shore manufacturing capabilities that are of high quality, The European Union, UK, US, and the Middle East and Gulf countries are Turkey’s biggest clothing export markets. Europe accounts for 65 per cent of Turkey’s clothing exports. Other big customers are Germany, Spain, the Netherlands, France and the US. Turkey’s proximity to Europe means that retailers and brands receive orders in less time than locations such as Bangladesh and China.

The average Turkish lead time is between 45 and 60 days. By contrast, clothing orders from Bangladesh can take between 90 and 120 days. Most suppliers in Turkey have their own design team. Investments in digitalisation have helped to reduce travel, cost of making samples and enabled getting approvals online.

Chinese startup Sewingtech develops robots to automate garment production.

Sewingtech is focusing on the labor shortage in the textile and apparel industry with the aim of improving efficiency. Using these robots, even an ordinary sewing worker with no expertise can operate two machines at the same time so production efficiency will be at least doubled.

Robots are already employed in the labor-intensive sector to make garments, but their use has been limited to simple operations such as laser cutting machines and electric sewing machines.Fabrics can easily stretch or crease. In addition, finishing products -- such as button sewing and positioning of buttonholes -- requires a fair amount of skill.Automated sewing robots can improve production, from fabric treatment to sewing. Some 1,70,000 apparel makers employ 8.26 million workers in China, of which sewing workers make up 60 per cent of the production workforce.

China's textile and apparel industry is in rapid decline as many production orders have been shifted to southeast Asia. In addition, China’s sewing factories are still dependent on skilled workers. But training and mentoring them is not easy, and workers' rising salaries are squeezing company profits.China’s strength lies in its light industry supply chains, with automation becoming increasingly important if the country is to remain competitive in the global garment industry.

The European Commission plans to set a limit to fast fashion imports. Currently, each person in the European Union discards annually about 11 kilograms of textiles, mostly clothing. Clothing that has been worn only seven to 10 times is frequently discarded.

The European Commission is therefore developing a textile strategy.According to the proposed plan, all textiles sold on the EU market by 2030 must be durable and recyclable.Clothing should be made from eco-friendly fibers, which are recycled fibers, free of harmful compounds and produced with environmental and social rights in mind.

This includes a reduction in the flow of fast textile production chains into the EU.The strategy elaborates on the following goals: to reduce the number of collections per year, take responsibility, act to minimize one's carbon and environmental footprint.Another major issue is the disposal of textile waste. Textile consumption is the third most negatively affected factor within the European Union, after water and land use, and the fourth most detrimental factor on the environment and climate change at large.

Beginning from 2025, separate pickup of textile waste will be mandated everywhere in the European Union. Since textile waste is a quickly growing export item, in particular to non-European countries, the EU has proposed restrictions on that as well.

The knitwear segment has retained its position as Bangladesh’s biggest exports earner in the readymade garment sector.

The knitwear segment overtook the woven sub-sector for the first time in the financial year of 2007-08 and held the pole position until 2010-11 before woven outran the knitwear segment in 2011-12 to continue its dominance till 2019-20.However, in 2020-21, knitwear was able to recapture its lost glory (as the highest export earner) and continued to outrun woven in the last fiscal year as well. In the first quarter of the current financial year, when overall export earnings showed a falling trend, the knitwear segment grew nine per cent year-on-year and even during the pandemic knitwear export was able to put up a good show.The use of knitwear items has risen as consumers spent more time at home.

Policy supports like cash incentives and utility have helped the entrepreneurs invest in the knitwear sub-sector including the backward linkage yarn, fabric and dyeing segments.Besides, changing patterns in fashion and buyers' preferences for quick delivery of products due to the long lead time caused by Covid-induced lengthy transportation also pushed buyers to source knit products from Bangladesh. Composite units having their own knitting, dyeing, sewing and finishing facilities are the other strengths of the country's knitwear sector.

Superdry’s profit this fiscal has increased. Profits have been rising thanks to women’s apparel and recycled products.Women’swear accounts for 51 per cent of Superdry’s revenue, up from 41 per cent in October 2021. Organic and recycled products accounted for more than half of the sales in the 22 weeks up to October, up 11 percentage points year-on-year.

All indicators point to brand health moving in the right direction: revenue, marketing, and sustainability messaging are all moving in the right direction. Superdry will produce enough organic cotton to meet all of the company’s cotton needs, making it self-sufficient in the face of rising prices for the material. Superdry is converting farmers in India to organic practices, is buying their seeds, is helping them with that process. The next focus is wholesale which accounts for 37 per cent of Superdry’s annual sales.

Premium British fashion brand Superdry has products like fragrances, body sprays and body plus hair washes.The UK market represents around 50 per cent of Superdry’s weekly sales and the US around ten per cent.Despite the profit increase, Superdry is cautious due to increased cost inflation and the worsening conflict in Ukraine, as operating margins are certain to come under pressure.

The answer is probably a big yes! Compare fashion brands that invested strategically in omnichannel with 89% retention rate versus brands that had lukewarm omnichannel strategies scoring a 33% retention rate and you have your answer. Brands and retailers are moving quickly to supply more seamless omnichannel shopping experiences—but customers are moving faster. Many apparel companies however find their brick-and-mortar stores are still essential. Their insight has been that more of the best customers are using a combination of offline and online channels when they shop. Post pandemic, this is often the emerging truth as footfalls to brick and mortar stores are returning to being on track.

During the pandemic, fashion retailers opted for e-commerce solutions for survival. The e-commerce sector received a notable boost from the pandemic thanks to the strong emphasis on social distancing, safety measures, and a convenient return policy. For retailers and fashion brands an omnichannel approach is preferred over a multichannel approach because the advantages are so many. The lifestyle sector has always been keen on adopting an omnichannel approach as they wished to offload the seasonal collections at the entire markup. In it, the retailers have effectively bridged the gap between offline and online models with a typical view of customers in omnichannel retail.

Selling off newest collections quickly

Omnichannel provides fashion brands huge visibility across various online and offline sales channels. This is extremely beneficial for fashion brands because older products/seasonal collections become obsolete. Here, omnichannel retail helps open up by offering much-needed product visibility. The visibility helps them offload all their collections, thereby facilitating garnering maximum revenues with ease and convenience. Fashion retailers have also considered the vital aspects of fashion, i.e., the speed to plug aspect. Customers expect brands to deliver products as quickly as possible. An omnichannel retail solution then becomes the ideal. Additionally, in India, fashion brands have the advantage of bypassing seasonal demands in areas that don’t have extreme climates and not have the onus of physical placements in areas that do.

Apparel in comparison to other products is most likely to be bought online

Customers are more likely to shop for apparel online as compared to other products. Two core factors that make online fashion immensely appealing to customers- lower prices than other sectors and apparel is straight forward to pack and ship across multiple pincodes in India due to easy logistics. Unfortunately, industries like electronics and luxury products (jewelry & watches) fail to supply such convenience. Larger electronic products cannot be shipped quickly, and hence they fail to make a significant impact like fashion. On the opposite hand, the high price point makes people wary when purchasing luxury items like jewelry and watches online. Online shopping embraces instant gratification. Customers also tend to get more when shopping online as they get huge discounts and free shipping on products.

Of course, fashion brands have to keep continually evolving their customer journeys and experiences to not only be relevant but also attractive in the moment of trends that flit in and out. Technology, particularly AI will lead the way towards more personalisation, ease of access to product information, trials and returns and last but not the least, a great sense of value purchase in a market that is so value and price sensitive.

Cambodia’s apparel exports to Canada increased 20 per cent in the first eight months of 2022 compared to the same period in 2021. Canada is the third largest market of Cambodia for apparel exports and has a share of nine per cent in Cambodia’s apparel exports. Cambodia is in fourth position in Canada’s apparel imports. Bangladesh and Vietnam are in the second and third positions. China is in the top position.

Cambodia’s free trade agreement with South Korea has come into effect. The free trade agreement may help boost Cambodia’s apparel exports to South Korea. The agreement also presents opportunities for value-added investments in Cambodia’s downstream processing industries through a plus one business model, in which South Korean companies could expand their supply chain network developed in not only China but also Vietnam or Thailand. South Korea has a great demand for high-value winter clothing and denim. Other potential products that have good demand in the country include non-leather footwear, home textiles, jute and jute products etc.This year, Cambodia’s apparel exports to South Korea may touch pre-Covid levels despite the volatility in monthly shipments.The FTA will remove tariffs on 95 per cent of products imported from Cambodia, while Cambodia will eliminate duties on 93 per cent of imported goods.