Shanghai Fashion Week is set to host more than 12 showrooms and trade shows, including the Mode Trade Show, Ontimeshow, Not Showroom, and Tube Showroom.

The event will take place this week, and showrooms are expecting a gradual rebound in brand and buyer attendance this season. Not Showroom will feature brands such as Louis Shengtao Chen, Ian Hylton, and Yuhan Wang. Tube Showroom, which will take place in an expansive space that will later become the showroom’s first retail location, will showcase brands such as Chen Peng, Shushu/Tong, and Calvin Luo.

Meanwhile, Ontimeshow, the largest trade show in Shanghai, will include emerging talents such as Zhong Zixin and Oude Waag in an independent building featuring artistic interiors. Lastly, Dadashow Showroom will host a series of industry talks, while Autumn Showroom will feature well-known Chinese designers such as Sean Suen and Dan Shan alongside emerging talents.

The showroom owners are optimist about the market's recovery and are hoping to achieve high-quality development through sustainability initiatives, innovation, and niche categories.

ASICS Arabia, a subsidiary of the Japanese sportswear brand, has announced an ambitious expansion plan for Saudi Arabia in partnership with Apparel Group.

The company has opened its first retail store in Riyadh Park Mall and plans to open several more across major cities in Saudi Arabia over the next five years. The next store will open in Red Sea Mall in Jeddah. The ASICS retail concept in Saudi Arabia offers 165 square meters of space and a wide variety of performance footwear and apparel across different sports, including running, tennis, padel, and indoor sports. It also features ASICS Sportstyle, the athleisure brand

In addition to its retail network growth, ASICS will also collaborate with the Sports For All Federation (SFA) in the creation of community-led sports activations and events. Recently, ASICS signed a Memorandum of Understanding (MoU) with SFA to bolster the Kingdom’s sports infrastructure and aid its transformation into a leading sports hub.

Indonesia's textile and footwear industries are driving the country's economy and exports, as highlighted by the recent Adidas Global Partner Summit in the country. The two industries contributed to a positive growth of 5.31% (yoy) in 2022 and have seen an increase in exports, especially to Europe and the United States.

The government has been supportive of these industries and has been implementing various policies to attract foreign investments to improve the business climate in Indonesia. The implementation of the summit aimed to encourage upstream and downstream integration of the supply chain to meet the rising demands of the TPT industry and world footwear.

Meanwhile, textile and garment issuer PT Trisula International Tbk (TRIS) is optimistic about its sales in 2023, with the demand for garments still high in both export and domestic destinations. TRIS has enjoyed the benefits of increased sales in the export market, which jumped by 53% in 2022, while the company's net profit even skyrocketed to 258% yoy.

The increasing trend of the Industrial Confidence Index (IKI) in January 2023 also supports the company's optimism. These developments come amid fears of a global recession, which have not yet materialized, and the two industries continue to thrive.

The Indonesian Textile Association (API) and several other associations will hold a three-day textile exhibition, Inatex and Indo Intertex 2023, from 29-31 March 2023 at the Jakarta International Expo.

This event will showcase the latest technological products and innovations from textile and garment machinery, raw materials, digital printing machines, textile chemistry, accessories, and other textile products.

The exhibition is expected to attract more than 12,000 visitors from businessmen and professionals. It will also feature an online platform technology that will connect exhibitors with visitors with the Texmatch application, which allows them to interact directly, before and after the event while opening up new opportunities.

During the exhibition, there will be informative and educational sessions on the latest trends and technologies in the textile and garment industry, including a Fashion Preneur Workshop and seminars regarding the development of the National TPT Industry.

The event aims to increase the insights of TPT businesspeople regarding digitalization and networking and to shape future trends to make the Indonesian TPT industry a trend leader that stimulates the economy and enhances Indonesia's image in the eyes of the international community.

Indonesia's textile and textile product (TPT) industry is facing tough competition from China and imported second-hand clothes or thrifting. However, despite challenges, investment in the TPT industry grew positively in the third quarter of 2022. The apparel industry saw an increase of 142 percent in investment value from the previous year.

Indonesian’s government is determined to make Indonesia one of the world's top five textile manufacturers by 2030 by implementing various programs, including the import substitution program and the annual restructuring of machinery and equipment.

The government also aims to ease the process of obtaining raw materials and reduce the cost of natural gas in the production process. Additionally, investment expansion is a major concern.

China's spandex exports have seen a decline in the first two months of 2023, according to data from China customs.

The total amount of spandex exported was 10.5kt, which is a decrease of 36.4% or 5993 tons compared to the same period last year. The export unit price was also down by $4.162/kg on an annual basis, standing at $5.182/kg in Jan-Feb. In Jan 2023, exports of spandex amounted to 4831 tons, an increase of 8.2% on a monthly basis but a decrease of 42.8% compared to the same month in the previous year.

The export unit price in Jan-Feb was $5.244/kg, up slightly by $0.006/kg on the month. In Feb, the total amount of spandex exports was 5645 tons, which was up by 16.9% compared to the previous month, but down 29.7% YoY. The export unit price was $5.128/kg in Feb, down by $0.116/kg on a monthly basis.

Despite spandex being exported to 85 nations or regions in Jan-Feb, which is an increase of 8 compared to the same period last year, the top four nations - Turkey, South Korea, Vietnam, and Egypt - still account for 47.3% of the total export. The exports to Pakistan, Taiwan of China, Mexico, Italy, and South Korea decreased, while exports to Uzbekistan, Malaysia, and the Netherlands increased by 100-200 tons.

The decline in spandex exports is due to the global economic slowdown and falling global trade, which has impacted the textile and apparel industry in emerging markets such as India and Vietnam. In early 2023, some large shoe factories in Vietnam downsized due to insufficient orders. The earthquake and falling demand from Europe and the US have also caused a decline in exports to Turkey by 66.3% or 4868 tons in Jan-Feb 2023, which is the second-lowest export rate in the last five years, only higher than Jan-Feb in 2020. The foreign exchange shortage in Pakistan has also affected spandex exports to the country.

Chinese exporters have turned their attention to neighboring Bangladesh due to payment problems in Pakistan, causing a rebound in exports to Bangladesh since Feb. Meanwhile, exports to India have also seen a medium-digit growth YoY.

India's exports of various products such as gems and jewellery, automobiles, coffee, tea, and articles of iron and steel have witnessed growth during the period of June 2022-February 2023 as compared to the same period in the previous year. However, India's apparel exports and iron and steel shipments to the UAE have declined during this period.

Despite these challenges, India's overall goods exports to the UAE have risen by 10.4% year-on-year to USD 23.03 billion, with imports increasing by 12.9% to USD 38.95 billion during the June 2022-February 2023 period. This positive growth can be attributed to the bilateral Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE.

The CEPA, which came into force on May 1, 2022, has facilitated trade between the two nations. The integration of customs and logistics portals to track shipments in real-time has resulted in priority entry at ports. As a result, India is poised to achieve an all-time high of USD 32 billion in exports to the UAE by the end of this fiscal year, thanks to the benefits of the CEPA.

Currently, India's exports to the UAE stand at around USD 28.3 billion, and approximately USD 1.3 billion of India's exports go on zero duty on a monthly basis, compared to USD 2.72 billion of total outbound shipments.

It is noteworthy that the Indian government has removed export restrictions, which has also contributed to the increase in exports. Despite the challenges faced due to global headwinds, both countries will continue to build on the success of the CEPA in the years ahead.

“Great merchandising, like great value, never goes out of fashion. In a dynamic and increasingly digital apparel, fashion, and luxury market, companies that get merchandising right tend to outperform their peers,” says McKinsey. In their article ‘Great merchandising never goes out of fashion’, authors David Barrelet, Matthew Chapman, Erik Eklöw, Julia Huang, Felix Rölkens and Hannah Yankelevich highlight in current economic environment and uncertainties there is an urgent need for companies to get merchandising right.

Shifting merchandising model

Merchandising is an umbrella term hence, is tough to optimize across its many facets. “About 97 per cent of fashion executives expect their cost of goods sold as well as selling, general, and administrative expenses to rise in 2023, spurring appetite across the industry to simplify assortments and manage costs.” For many executives, the trend echoes their longer-term thinking.

The authors argue, there six shifts in the industry’s merchandising model for decision makers and these are throwing up numerous opportunities. “If they can optimize their merchandising activities to react to these shifts, they are likely to create a playbook that can help them navigate a tough economic environment and set up their businesses for growth.”

The new models

The six shifts put forth by the authors are:

Less is more during economic uncertainty: Ongoing inflation has put pressures and hence the cost of running a fashion business has grown. Therefore, during uncertain economic situations, “there is an urgent need for brands to embrace leaner business models so that each dollar earned, and saved, goes further.” Margin pressures can be reduced by rethinking discounting and promotions. For example, Victoria’s Secret, PVH, and American Eagle, among others, announced pullbacks on promotional pricing.

Consumers demand newness and storytelling: With product life cycles reducing there is premium on newness. Consumers want brand to convey clear brand stories and have a positive impact on society. And brands need to ensure close and early cross-functional alignment in their go-to-market plans.

For example, fast fashion retailer Shein has grown 100 per cent year on year for the past eight years, becoming the second most popular shopping website among America’s Gen Z (after Amazon) and number one in the world for web traffic. What has worked for Shein is about seven days faster than leading fast-fashion players in moving products from concept to customers. Now, other brands are following the same pattern. For example, Nike, adidas and New Balance release new sneaker on a weekly basis.

Sustainability is climbing the agenda: With a more environmentally aware consumer and tougher regulatory policies, the industry is being forced to clean up its act. The authors say, merchandisers have a key role in promoting sustainability. “In response, companies need to reduce waste, prioritize sustainable materials, design for circularity, and ensure a sustainable, responsive supply chain.” They also need to unlock different ways of working, and forge closer collaboration between merchants and their design and supply counterparts through the product development cycle.

Channel dynamics are continuing to evolve: The pandemic saw e-commerce growth with many brands shifting direct-to-consumer (DTC) models. However, post-pandemic, brands need to diversify their channel mix, including wholesale and third-party marketplaces, alongside DTC. “Critical to this is having a clear distribution segmentation, allocating wholesalers and DTC to distinct value tiers and setting the guardrails on multiple dimensions, including the assortment that is offered and the level of investment that accounts receive.”

Data and insights have become a necessity: Data and analytics will remain a key focus area for merchandising with 61 per cent fashion executives saying end-to-end process management will be among the most important investments between 2021 and 2025. The author’s research show, applying integrated digital solutions to merchandising could lead to up to 50 per cent faster time to market, 8 per cent rise in full-price sell through, and 20 per cent decline in manufacturing costs. “It could support in-season pricing and promotions strategy, as well as feed data-driven range planning and optimization. In addition, through new and more granulated customer insights, companies can bring sharpness to their planning and design processes.”

Talent crunch puts pressure on the operating model: “The war for talent makes a well-oiled merchandising operating model a priority. From defining the merchant role as the exciting and business critical role it can be to finding the right balance between core merchandising skills and horizontal excellence functions, the need to act is clear.”

After reaching a record-high apparel import value of US $99.93 billion in 2022, the United States has experienced a decline in its apparel imports, both in terms of value and volume, on a yearly basis.

According to data released by the Office of Textiles and Apparel (OTEXA), the country imported US $7.27 billion worth of apparel in the first month of this year, representing a 3.44% decline on a yearly basis. However, imports increased by 9.16% compared to December 2022 when the country imported US $6.66 billion worth of apparel.

All major apparel export destinations experienced a substantial decrease in their volume-wise shipment to the United States in January 2023 on a year-over-year basis. However, India, Bangladesh, Indonesia, and Sri Lanka increased their apparel shipments to the United States in value terms. India exporting US $485 million (up 9.77%) and Indonesia were valued at US $453.84 million (up 4.73%) worth of garments to the United States.

China's share of the apparel import value declined to 19.83%, possibly for the first time ever in the first month of a calendar year. Despite the decline, China secured its top rank with US $19.33 billion worth of garments entering the United States from the Asian giant, growing at a rate of 20.76%. However, the value-wise share has come down to 22.19% from 23.92% a year earlier.

The textile industry in Pakistan is facing severe challenges due to the unavailability of cotton and restrictions on opening Letters of Credit (LCs) for imports. As a result, the industry's exports have been badly impacted, leading to large-scale unemployment across the sector.

Local cotton production had remained less than 5 million bales in the current season due to last year's floods and heavy rains. Therefore, the textile industry would need to import at least one million bales of cotton to meet its requirements. However, banks were not opening LCs for importing the required quantity of cotton.

Textile mills are currently operating at less than 50% of their production capacity, and around seven million people associated with the sector have lost their jobs. If the industry remained closed under the current unfavorable conditions, more than 10 million people would be rendered jobless, and the country would lose annual export revenue of over $10 billion.

India's exports of readymade garments (RMG) and raw textiles dropped by 12.1% and 17.5%, respectively, in February 2023. There was also a decline in handicrafts (down 28.3%) and leather (down 14.5%) exports during the same period.

The decrease in exports can be attributed to the anticipated slowdown in global growth, which is largely due to lower growth in advanced economies, such as the United States and the euro area, both of which are significant export markets for India. Additionally, a potential deceleration in domestic growth could lead to some softening in imports.

The shift in demand from goods to services, which is less import-intensive, is expected to continue, leading to a further slowdown in goods exports. The impact of monetary policy tightening could also intensify the decline in goods exports.

However, India's merchandise imports fell by a slightly lower 8.2% YoY to $51.3 billion in February, with core imports declining by only 2%, indicating the resilience of domestic economic activity.