In a recent McKinsey report, a group of experts from the consulting firm’s Retail Practice point out, Asian readymade garment manufacturers need to be strategic in the context of changing scenarios in their importing markets that were primarily driven by the 2020-2021 lockdown, the Ukrainian conflict and the ever-rising environmental concerns that the garment industry has been facing for decades. 

Post pandemic, most fashion brands have changed their buying strategy to make it more seamless and foolproof, especially the ever-important supply chain. Western buyers now seem more interested in their resources in Asia undergoing digital transformation and be analytics driven thus enable themselves to provide smooth interaction. So much so that in the near future Western importers might make digital transformation a mandatory feature if the supplier wants their business. The other strategy gaining grounds is “near-shoring” or having manufacturing hubs closer to the consumer market which lowers logistical costs and saves on carbon miles. The idea is suppliers invest in creating hubs closer to their long-term partners’ markets. 

Asian manufacturers face serious issues

China, India, Bangladesh, Indonesia, Malaysia, Vietnam and Sri Lanka are at the helm of global exports of readymade garments. However, with the US and EU reducing orders steadfastly it has created a crisis-like situation so much so that in an all-time first for the region, Vietnam and already financially-crippled Sri Lanka shut down factories or operated at a bare minimum starting January 2023 until  round April. Even Bangladesh and India have run units at 60 or 70 per cent capacities and the challenged situation is seeing profits spiral downwards. 

The key challenges these nations face are that fashion brands are paying less to balance their retail sales in an economic crisis-hit west, which in turn is adding to the cost pressure as Asian nations too are paying more on operational costs and raw material. The other main challenge is the speed and flexibility of suppliers, which raises the point of near-shoring for the benefit of a long-term partnership, and flexibility so supply chains can be rearranged effortlessly if and when situations arise. Digital transformation, an element that is poorly represented in Asian manufacturing hubs has to be deployed immediately and sustainability has to be taken seriously to gain credibility in conscious consumers. That is a lot to take on and in this situation McKinsey has some insightful recommendations to the beleaguered sector in Asia. 

Five-deck strategy to meet challenges 

An important recommendation for the future will be partnerships that large Asian manufacturers invest in. As the fashion sector becomes increasingly polarized, it has been observed that the top 20 brands are resilient and steady since 2019 until now. It may be worthwhile deciding who suppliers envision as long-term partners and initiate their choices based on honest appraisals of their own capacities and capabilities.

Future-proofing manufacturing units by leveraging digital and analytics to drive productivity and provide strategic benefits to partners that are categorized as long-term ones – the value on offer will play a key role in sustaining such partnerships. 

Recalibration of commercial negotiations that are based on customers, their product portfolios and the economic situation of their markets will help fortify the relationship as credibility and practicality of the business engagement will enable its continuity. 

Structural overhauling is the fourth part of the strategy that requires alignment of the commercial aspect of the business with demand and specification-based initiatives in external spends. Done well, this can end up with about ten per cent cost benefit for manufacturers. 

Lastly, diversification of geographic customer portfolio and investing in targeted markets thereby onboarding near-shoring is a key strategy. The manufacturers that have already adopted the “local for local” are winning on logistical costs already. 

With heightened awareness on health and fitness worldwide, Indian attitude to swimwear has been swimming against the tide of a relatively nascent apparel segment. Many Indian fashion brands have now entered the swimwear market with innovative designs in the bikinis and one-piece cut-away swimsuits that are the most popular although other silhouettes like monokinis, swimming dresses and even burkinis are also part of the extended portfolio in India and other traditional countries. 

Growth in the swimwear retail market can be attributed to a thriving beach travel industry, influence of social media, rise of physical fitness and even destination weddings where swimwear is now a part of the bride’s trousseau. Experts say, that the segment makes a profit margin of around 40 per cent especially due to the New Age social media. 

Global swimwear segment to grow 2.16 per cent CAGR

Latest Statista report the leading global provider of market and consumer data- the revenue in the sports and swimwear global segment amounts to $817.70 million in 2023 with the market expected to grow annually at 2.16 per cent CAGR  from 2023-2027. In global comparison, most of this revenue is from the US with $12,600 million in 2023 and expected to show a volume growth of 2.4 per cent in 2024. 

In India too, many domestic brands have sprung up over the last decade, giving stiff competition to international brands as they have versatile designs more suited to the Indian woman’s shape and likings. As fashion comes of age in India, more homegrown labels are jumping into this bandwagon and more international niche swimwear labels are launching here.

Many international retailers such as Madewell are expanding their third-party brand mix to diversify their range and acquire new customers which currently stocks 14 external brands while M&S has extended its branded offering with stocking Sosandar and Fantasie.

Allied Market Research, a well-known consulting and advisory firm had valued the global swimwear market at $18,454 million in 2017 and new reports indicate that there has been a  healthy  growth rates in India and the market is currently pegged at Rs 150-200 crores while growing at the rate of 15-20 per cent year on year.

Bespoke and innovative swimwear making waves 

As per Ajay and Kalpana Rajpal of Mezzaluna who have a innovative portfolio of bespoke swimsuits, the swimwear segment is now vast, ranging from tiny bikinis to covers-more silhouettes like monokinis and even burkinis and it is now a category that caters to all cultures. With destination weddings on the rise, bikinis are not only part of the trousseau, but even entering traditional dressing as they can double up as sari blouses and maillots can be worn as bodysuits. 

Neha Gupta, Founder of  Exchange4Fashion, says international luxury labels in India are focusing on innovative styling on Indian women’s body shapes and working with overlay styles. As the market grows, entry-level prices of most brands are increasing while including  inclusive product descriptions with mentions of  slimming designing abilities having drastically decreased to inspire body confidence while retaining  shape and fit. Specialized niche design such as long-torso designs and special period and leak-proof swimsuits made from recycled fabrics with Modifier Swim Technology that is absorbent, stain and odor-resistant, is also making an all-new entry into the category.