Organized by Confederation of Indian Textile Industry (CITI) and GartexTexprocess India, virtual conference on ‘Rebooting the Textile & Apparel Industry’ urged the textile and apparel industry to make maximum use of technology besides focusing on sustainability. The conference was inaugurated by Arvind Singhal, Chairman, Technopak Advisors, who presented a vision for the industry in next 10 years. K S Sundararaman, Chairman, Indian Technical Textile Association (ITTA), emphasized on the dominance of electronic clothing in the next 10 years and the growing demand for products made from biodegradable waste.

Ronak Rughani, Chairman, Synthetic & Rayon Textiles Export Promotion Council (SRTEPC), urged Indian brands to explore overseas markets while A Sakthivel, Chairman, Apparel Export Promotion Council (AEPC), hoped India will lead MMF exports in the next few years.

Technical experts at the conference highlighted the importance of digitization in the fashion industry. Ram Sareen, Chairman & Founder, Tukatech emphasized on shorter supply chains in order to adjust to the new normal. The session on ‘Brand and Retail – Emerging Scenario in Textiles & Apparel’ highlighted o the need for omni-channel retailing and the emergence of other channels apart from e-commerce.

Australian Wool Innovation (AWI) is urging wool growers across the country to complete an online survey detailing their priorities for a prosperous industry in order to boost the organization’s Wool 2030 strategic plan. Closing on August 16, the survey explores opportunities and risks to garner a picture of the stakeholders’ future vision for the industry. The purpose of this survey is to maintain the profitability and sustainability of wool production, says, Stuart McCullough, Chief Executive Officer of the company.

Australian Wool Innovation is working to implement a Wool 2030 strategy that would serve to guide the country’s stakeholders in becoming ever stronger. The organization has urged wool growers to provide feedback on potential growth areas and biggest growth hurdles over the coming years.

AWI’s Wool Consultation Group (WCG) also conducted a series of five webinars exploring the areas to be addressed in the Wool 2030 strategy. These covered issues surrounding wool production as well as downstream activities in which wool growers have a strong stake, such as traceability systems.

Analyst Sanford C Bernstein & Co pointed that like-for-like sales of LVMH Moët Hennessy Louis Vuitton fell by 38 per cent to $9.2 billion from April to June and by 27 per cent to $21.6 billion during the six month period of January-June 2020. The company’s net profit plummeted by 84 percent to $613 million due to the difficulties it faced in cutting costs, said Wall Street Journal. Hit by COVID-19-related store closures across the globe and by significantly decreased travel retail sales, LVMH reported lower revenues in United States and Europe during the quarter and first half.

LVMH’s Fashion & Leather Goods business recorded a 24 per cent decline in revenue in the first half of 2020, while Perfumes & Cosmetics and Watches & Jewelry saw respective drops of 29 and 39 per cent for the half year period. Despite the pandemic, Dior showed remarkable resilience, confirming its exceptional appeal and gaining market share in all regions. Louis Vuitton was also able to very quickly transform and boost its customer relationships with a unique, high-quality and highly effective digital clientele strategy.

LVMH plans to focus on its own e-commerce platform rather than on third party distribution channels.

Nepal’s RMG sector has faced major order cancellations of almost 28 per cent of the country’s total apparel export in the first 11 months of financial year 2019-20, which ended in middle of July due to COVID-19. Garment Association of Nepal disclosed orders worth Rs 1.25 billion have either been cancelled or put on hold by global buyers on account of the pandemic.

Further, the country had to face major obstacles both in importing raw materials and exporting the ready products to many countries, which halted its traffic movement, said Chandi Prasad Aryal, President of the association. In the first 11 months of financial year 2019-20, Nepal exported apparel products worth Rs 4.54 billion against exports worth Rs. 6.34 billion in the corresponding period of previous year.

As Indian apparel exporters are likely to have at least 25 to 30 per cent fewer orders in the rest of the months of 2020, their marketing efforts need to be enhanced with more investments. Exploring the strategies of small and medium exporters, and other stakeholders, Apparel Resources noted, exporters are buying data, doing extensive online research and approaching various trade bodies in India as well as abroad.

Exporters are also exploring tools like Zoom meetings to connect with their buyers, and buying houses on a regular basis. Virtual fairs have proved to be one of the strongest pillars of support for many small exporters along with giving them hopes to add new buyers. Export Promotion Council for Handicrafts (EPCH) has conducted three virtual fairs in the last one and half month. Jaipur-based apparel exporter, Pradeep Nahata, Managing Director, Karni Exports, who participated in two of these fairs, is currently sampling for two new buyers he met during those virtual events. National Garment Fair by The Clothing Manufacturers Association of India (CMAI) will also go online and has been scheduled from 2 to 11 September this year.

Some exporters are even changing their strategies and personally approaching buying agents and buying houses. They are also ensuring that payment terms are clear in the beginning itself, for example, 30 per cent in advance and rest on completing the orders.

Exporters are also collaborating with agencies that have good reach in terms of wholesalers, importers and boutique buyers. However, issues like high charges of these agencies and less probability of order conversion with new buyers are making these collaborations difficult.

Following its initial enactment in May, Italy revamped its Law Decree No 34, or the ‘Rilancio Decree’ – that introduced a number of economic measures in response to the COVID-19 crisis – this month. The law now includes amendments to provide corporate and tax measures to support Italian companies in light of the sweeping manufacturing disruptions and greater market volatility cased by the COVID pandemic. Among the new additions to the law is a specific provision that aims to provide tax credits for entities in the textile, fashion and accessories sectors in connection with their final stock inventories.”

According to Baker McKenzie’s Mariassunta Pica, Bianca Bagnoli, and Marzio Bucciol, the July 19, 2020 amendments include a new tax credit equal to 30 percent of the value of the unsold inventory at the year-end that exceeds the average of the inventories booked in the three previous fiscal years.

In order to be eligible for this tax credit, companies need to evaluate inventories by sing the same methodology and criteria both in the 2020 tax period and in the three previous tax periods.

Recovery strategies planned by governments across the world would be of no value for Asian countries if they fail to address the issues of local garment sectors. As data from World Trade Organization indicates; a bulk of Bangladesh’s merchandize exports in 2018 comprised apparels. Similarly, the garment industry of Cambodia employs around 79 per cent of its female workforce.

The garment industry in most developing Asian countries relies on imported yarns and fabrics. Though COVID-19 has resulted in substantial order cancellations, factory closures and job losses, the outlook for the apparel industry remains positive. For most western brands and retailers, Asia still remains their largest sourcing base with no alternatives in sight. From January to May 2020, over 80 per cent of the apparels imported by the US were from Asia. Though retailers have diversified sourcing away from China, they are now targeting other Asian countries like Bangladesh, Vietnam and elsewhere in ASEAN.

Automation and innovation fuels popularity of Asian garments

Apparels made by Asian factories are gaining worldwide popularity due to their factories’ continuous investments in automation technologies, research and development, product innovation and infrastructure. Asian manufacturers offer competitive prices and other value-added benefits such as speed to market, reliability and flexibility. This gives them an edge over other suppliers across the world.

Rising purchasing power of consumers has turned Asia into one of the world's largest consumption markets with producers benefitting by making garments exclusively for Asian consumers.

Corporate social responsibility to ensure sustainability

However, to be a sustainable growth engine for Asian economies post-COVID-19, garment manufacturers and suppliers need to make a greater effort into corporate social responsibility. They will have to ensure better treatment of workers by reducing the pay parity between them and their global counterparts. Manufacturers will also have to assume the responsibility for safety of their workers and ensure that a tragedy like Rana Plaza fire outbreak does not occur again.

A step in the right direction, the recent suspension of the Everything But Arms trade preference to Cambodia by the European Union sheds light on issues like exploitative labor unions, lack of accountability for poor working conditions, gender discrimination, long working hours, underpayment and noncompliance with international labor standards in these factories.

More cooperation from Western brands

The onus of improving corporate social responsibility should not be placed on garment factories or apparel-producing countries alone. Western fashion brands and retailers that source from Asia should be made equally accountable for honoring their commitments and cooperating with their vendors during this difficult time.

Unfortunately, some fashion brands and retailers have not only canceled substantial orders but either delayed or rejected payment for orders already or nearly completed. This not only adds to the financial pressures of these garment factories in Asia but also makes their workers more vulnerable to future abuse. The garment sector can be a unique growth engine for Asian economies provided both manufacturers and retailers stick to commitments.

The planet’s biodiversity is declining at a fast rate with the apparel industry being one of the most significant contributors to this loss. Indeed, global apparel companies have been launching myriad initiatives to become carbon neutral. However, measuring the impact of their operations on the environment requires multiple metrics and indicators. McKinsey & Company has made a deep study of the effect of each apparel value chain on Earth’s biodiversity and identified some of the largest contributors to its loss. These include:

High use of insecticides and pesticide in cotton farming: Although grown on only 2.4 per cent of global cropland, cotton accounts for 22.5 per cent of the world’s insecticide and pesticide use. It is also a water-intensive crop with around 713 gallons (2,700 liters) of water needed to produce one T-shirt.

Unethical sourcing of wood-based fibers: Around 30 per cent of man-made cellulose fibers (MMCFs) are obtained from endangered plantations. The water and soil pollution from chemicals used in the plantation of these forests results in habitat loss and endangering of species.

Exploiting fresh water resources: Textile dyeing and treatment, which overexploit freshwater resources and contaminate waterways, accounts for approximately 25 percent of industrial water pollution. The European Union classifies around 165 of the 1,900 chemicals used in clothing production as being hazardous to the health or the environment.

Contamination with microfibers: The report states on an average of 700,000 fibers are released in a standard laundry load, what’s more7 and half a million tons of microfibers (which are a type of microplastic) flow on the oceans every year. An estimated 35 percent of primary microplastics in the world’s oceans originate from the washing of synthetic textiles. Toxic chemicals in synthetic microfibers poison marine wildlife

Unmanaged waste: Around 12 per cent of textile waste is broken down into its component materials, and less than one per cent is closed loop recycled. Nearly three-fourths—73 per cent—of textile waste is incinerated or ends up in landfills, which release pollutants into their surroundings and contribute to habitat loss. Anywhere from 30 to 300 species per hectare may be lost during the development of just one landfill site

To mitigate these risks, apparel companies can adopt the following strategies:

Make materials more sustainable: Each of the materials used in the industry can be made more sustainable with new innovations and investments.

Support multiple production systems: The industry can optimize the environmental footprint of global cotton production by supporting multiple production systems. It can also develop low-impact alternatives to conventional fibers.

Tougher stance against waterway pollution: Waterway pollution from textile dyeing and processing requires a tougher stance from apparel brands. For this, brands can engage with suppliers to establish basic certification standards at scale. Suppliers should also comply with Zero Discharge of Hazardous Chemicals, Manufacturing Restricted Substances List (ZDHC MRSL), and Wastewater Guidelines, which regulate the use of hazardous chemicals and wastewater discharge.

Brands and suppliers can pursue high-tech options like moving from wet processing to waterless dyeing, which uses supercritical carbon dioxide, or to digital printing, which reduces water and chemical dependency. They can retrofit microfiber filters into their washing machines can help consumers prevent microfibers from entering waterways.

Make behavioral changes: Brands can minimize biodiversity loss by making simple behavioral adjustments and consumption choices like changing their washing-machine settings from delicate to cold express cycles.

They can also incentivize behavioral change by offering small vouchers in exchange for used clothing. The industry can provide viable business models for repair and reuse like Patagonia did in 2019, when its Worn Wear Program repaired more than 40,000 pieces of clothing.

Manage biodiversity like value creation. Brands can also manage biodiversity like financial performance by committing to new biodiversity science-based targets. They can team up with other apparel companies to invest in scaling and industrializing emerging, low-impact technologies and substitutes for nonsynthetic fibers.

Post COVID-19, biodiversity is likely to become an even greater concern for consumers and investors. Apparel industry should make bold moves to tackle it.

In view of the current COVID-19 pandemic situation, the Hong Kong Trade Development Council (HKTDC) has migrated the nine physical exhibitions originally scheduled to be held by the end of July onto an online platform. In addition, an artificial intelligence (AI)-enabled business matching service is being introduced to help suppliers and buyers close more deals. Organised by the HKTDC, Summer Sourcing Weeks | Go ONLINEopens today and runs until August 7. This 9-in-1 virtual trade exhibitionhas attracted more than1,300 exhibitors, featuringlighting, electronics, information and communications technology (ICT), medical and healthcare, houseware, fashion, home textiles and furnishings, gifts, printing and packaging products. Thisbrand-new online exhibition platform will helpglobal buyers to replenish supplies and assist small and medium-sized enterprises (SMEs) in exploring newbusiness opportunities duringa difficult time.

Benjamin Chau, HKTDC Deputy Executive Director, said: “Although theCOVID-19 pandemic is presenting huge challengesfor businesses globally, it also offers theprospect of online business opportunities for enterprises. The HKTDChas initiated various online promotions,including the Spring Virtual Expo in April and the Summer Virtual Expo in late June and July, to assistSMEs and international buyers overcome the challenges during this difficult period. Now, to further boost business connections between global exhibitors and buyers, we are launchingSummer Sourcing Weeks | Go ONLINE, an advanced online virtual exhibitionthat runs for 12 days starting from today and featuresthe AI-enabled Click2Match business matching platformto help SMEsforge more connections and opportunities.”

Chau added that Summer Sourcing Weeks | Go ONLINE is one of the HKTDC initiatives helping to expandthe e-commerce capabilities of Hong Kong businesses. “The HKTDC is actively equipping SMEs to embrace the digital economy. In addition to strengthening cooperation with a number of technology partners to provide Hong Kong companies with more cost-effective digital solutions, the interface and functions of our hktdc.com Sourcing online marketplace will be further enhanced andrelaunched later this year, utilising a variety of new technologies to improve business matching efficiency.”

New AI business matching platform

The one-monthSummer Virtual Expodrew to a successful close on 24 July, helping more than 22,000 suppliersconnect with buyers from around the world. From April to July, the number of buyers browsing thehktdc.com Sourcing online marketplaceincreased bynearly 20% to 4.2million compared to the same period in 2019.

Building on these achievements,Summer Sourcing Weeks | Go ONLINEhelps exhibitors from the nine physical fairs build a virtual presence to connect with global buyers.The virtual exhibitionoffers multiple new functions that make it easy for buyers tosourceonline.These include the Click2Match business matching platformthat operates automatically using big data and AI technology, and other functions covering meeting planning, video meetings, live chat and online seminars run by industry experts, all of which will provide a better online sourcing and communication experiencefor buyers and exhibitors alike.The HKTDC’s 50 global offices have been keeping in touch with buyerswho attended its physical fairs previously along with newly registered buyers. Over 5,000 business matching meetings have been pre-arranged to increase business opportunities.

Online seminars

The Summer Sourcing Weeks | Go ONLINEportal highlightsfeatured products and details of the nine fairs for participants’ easy reference. The Intelligence Hubintroducesvarious webinars, including “Tech Trends Symposium 2020 – The Future of Intelligent Connectivity” (28 July), which will address the impact of the artificial Intelligence of Things (AIoT), the smart home, 5G technology applications and other related issues. Elsewhere, representatives from WGSN,the global authority on consumer and design trends,willshare their viewsin “WGSN Presents: Lifestyle & Interiors Trends Presentation S/S2021” (29 July), while the “Asian Lighting Forum 2020 – Shaping the Future of Lights” (30 July)will analyse the prospects of smart lighting from a human-centricperspective. The“Trendwatcher – The Reshaping of Retail Landscape” seminar (31 July) will feature representatives from internationally renowned market research agency Euromonitor International and local branding consultancy REALLY DESIGN.

Focus on anti-epidemic products

Ever since the COVID-19 outbreak began, local scientific research companies have worked to develop a range ofanti-epidemic productsfor better hygiene and health protection. The online exhibitionpresents a variety of disease prevention and control products, with theSmart Health Hong Kong zoneshowcasinga wide range of locally developed healthcare products. They include anantibacterial and antiviral coating,a disinfection robot,nanofibre-technology air filters, air sanitisers, an AI-assisted body temperature screening system, quarantine trackingtechnology and more.

The stay-at-home economy has also been drivingdemand for consumer electronics and home entertainment equipment. The virtual fairfeatures a broad selection ofsmart home and lifestyle products.

Subsidies to exhibitors

To assist enterprises in overcoming the challenges brought about by the pandemic, the HKTDC is providing a special subsidy of HK$5,000 for each exhibitor taking part inSummer Sourcing Weeks | Go ONLINE. The original participation fee for the fairwasHK$10,000.After deducting this special subsidy, local companies that meet theapplication criteria for theSME Export Marketing Fundare eligible to apply for an additional 50% subsidybased on the original participation fee. This means that theirparticipationin the virtual expo will be freeofcharge.

Following lifting of lockdowns in the European Union and the US, Pakistan’s leading textile exporter Interloop Ltd (ILP) has received several new orders for hosiery products such as socks.

A listed company at the Pakistan Stock Exchange (PSX), ILP manufactures products for renowned brands such as Adidas and Nike. The company’s denim division lost over half of its orders due to the COVID-19 pandemic while its hosiery division lost 15 per cent of the orders.

Around 60 per cent of the company’s export revenue comes from the EU while the rest comes mainly from the US.

The company has been able to get orders for its hosiery division from three new clients whereas work has also been done to bring new clients on board for its denim segment and one good brand is placing orders at very attractive prices.

Currently, the ILP’s denim segment is operating at a loss, however, it is expected to start contributing to profits from next year. Currently, the company is one of the world’s largest hosiery manufacturers and Pakistan’s sixth largest exporting firm.

It has two manufacturing units in Pakistan and Bangladesh, and one associated company in Sri Lanka, along with services available in the US, the Netherlands, China and Japan.