Apparel Online has initiated a regular column ‘MINDTREE’ to enable our esteemed readers to express their opinion on current issues, concerns of the industry and recent happenings etc. The responses have been well received by the industry and reflect a deep understanding of the subject/topic under discussion.
The
topic under debate for the next issue is :- Indian garment manufacturers are today looking for new areas of growth away from just working with their traditional products. Some of the emerging potential niche markets are organic cotton, specialised apparel in workwear like fire retardant suits, moisture wicking or performance apparel like sportswear and non-apparel items in regular use like bandages, elbow guards & kneecaps, sturdy baggage, etc. Have you ventured into any new product category that has given you good returns / what according to you could be the future growth segments for Indian Garment/textile exporters in the coming years? Kindly amplify your views/comments.
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Please forward your comments, experiences etc. by…..07 May 2008. These will be published along with your name in 'Apparel Online magazine' and 'ApparelResources.com'.
The previous topic under discussion was:ate
for the last issue was : -
Q
China is for the first time seeing a rise in the cost of production, affecting its competiveness in the global apparel market. Many believe that business may shift to new centres which are more cost effective while others believe that China has created a system which is still the most productive and in the long run, business will continue to be most sustainable in China. If you have any experience working in China or with a Chinese company, let us know what you have observed and your opinion whether China will remain a leader the apparel industry.
I firmly believe that China will remain a leader in apparel trade; the level of technology, output is far above than any other countries. Whatever is happening is not going to bring any drastic changes. India has also lost its competitiveness due to the dollar issue, the situation is really bad at the moment. We regularly hear news about closing down of factories and exporters shrinking their business. The situation in China can prove to be positive for India as for many big retailers like Wal-Mart, Gap the main sourcing destination is China and after that it is India, so orders may fall into India’s lap but to expect that China’s competitiveness is going to decline is not possible. China will dominate the industry even in the near future and will remain at a strong position.
Niraj Jha, Madura Garments, Bangalore
China has been a leader and will remain a leader as they have created the systems wherein they can handle the current crisis. Buyers always look for options and will continue doing this but that does not mean that orders will move out, some orders may come to India, some might go to China. There should be no comparison between India and China as they have their own strengths and weaknesses; instead they should complement each other. India has better quality and its forte lies in hand made products whereas China has other qualities. What India can give, China cannot and what China can give, India cannot.
P. Vasudevan,India Merchandisng Services, Noida
I think China will be able to maintain its cost structure as they have good and long term relations with their buyers and of course the capacities have always been outstanding. Even if the cost will increase they will not lose too many orders as they have a strong control over productivity and lead times which will help them sustain the share in market. Moreover, they do not let their buyers loose so easily. China’s biggest advantage is that most of the companies are vertically integrated which is not available in India or any other country. Cost might go up but that will be compensated by regular orders. Lat year China was a big winner but now seeing their situation, buyers will also try to get benefits and will negotiate more to get less prices. The sourcing from the country may decrease in the coming days. As far as India is concerned, it is at the crossroads as very few factories have capacities and the set up to beat the competition; exporters still do not have integrated set ups and the required level of productivity which are critical. It can be expected that buyers may shift 5 to 10% of their sourcing to other countries, however, to grab that share we need to give consistent quality, processing and feel to the product so that buyers remain confident about India’s capability and strengths. No doubt the government of India has to play a proactive role in supporting exporting, favourable policies and beneficial schemes and funds would provide a good support to the apparel industry of India, however, this has to come from exports also. The industry has still not attained international standards in manufacturing, production and finishing except for a few players who have invested and are ready to give competition to other countries including China.
Madhu A Roongta, Roongta Consulting Group.
I don’t think that China is going to lose its competitiveness as they are far ahead in competition, we can’t beat them in prices, technology. Rising costs is a big concern for India too as wages have gone up sharply and dollar depreciation has added to the woes. Moreover, till now the efficiency and productivity levels of Indians have not improved in a big way. Also, even if the sourcing pattern goes through changes, why will buyers come only to India? Today, there are many other competitors who can offer price, quality, value additions and quality. Countries like Vietnam, Bangladesh and Sri Lanka are doing fantastic work in apparel will continue to perform like this. With so many options available with buyers, the players of India’s apparel industry need to charge up and make some rapid changes in the way things work here.
Piyush R Vyas, Bangalore.
China is a leader in consumer products and it has established a brand image for itself all over the world. The products from China are saleable for being innovative and cost effective. However, we are getting feedbacks about costs going up in China mainly due to changes in labour laws, subsidies and exports incentives rules by government. Moreover, labourers are also more interested to work in industries other than the apparel industry. As a result, apparel exporters in China are facing shortage of skilled and efficient workers and in order to get such workers they are forced to pay more; that obviously affects prices. Also, the Chinese government has reduced the subsidies for exports which poses more problems. It seems that the increasing costs in China is definitely going to dampen its competitiveness as compared to other countries who are rapidly grabbing strong position in the market and are proving to be good alternatives for buyers. But we cannot say that due to all this China will come to second position, as it may effect some volume business but it is not going to make a drastic change as orders for basic and high volumes will still go to China. India can get some share and some more orders for spring 09, however, the Indian apparel industry is also going through a difficult phase as costs are increasing here too. No doubt, India is one of the biggest competitors for China but India cannot take a dominant position no matter what the situation in China may be. Personally I have not worked with any Chinese company but we are constantly getting latest information from our buyers and other related sources about the developments and events happening there. After hearing everybody’s verdict and my experience in the industry I can say that still India and other countries are too far to compete with China and I think China will be remain a leader in apparel and other consumer products in the future too.
Pradeep Nahata,Karni Exports.
Infrastructure, labour, capacities, China has all the important things that makes it a preferred destination. The dollar effect that has been a major setback for India has not affected China. The country is going to remain a leader as they are still getting regular orders and are trying best to maintain their prices. In India the apparel industry is going through a lot
of changes, while many big wigs have already closed some of the factories are getting into new business, in China new players are entering in the trade rapidly. I think to remain in the race India needs to plan out new moves quickly so that the remaining business does not move away and new orders starts coming in.
Mohhammed Muzzakier,Green International, Chennai.
China may seem strong from outside but internally there is a lot of chaos, the political systems in China may pose a barrier in China’s textile industry growth. China cannot be considered a competitor, they have their own strengths and we have our distinct individuality, strengths and weaknesses, comparison cannot be made so easily. China will remain a leader in this segment due to the efficient systems and different way of working they have. India has to improve and bring in new changes to sustain its position in the market. As per a research, 25% of the cost is spent on power during dyeing process. We have to look out for alternatives wherein we can
get maximum results with minimum use of resources. Another important aspect is
that the players will now have
to come forward and discuss
at a common platform, bring more transparency and share their views, methods, technology so that a common goal of
making this industry profitable can be achieved. It is very important to promote clusters and their developments so
that new concepts come
forward regularly.
Raman Azhahia Manavalan, Conquest, Tirupur.
II not only believe but very strongly believe that China will always remain a leader in Apparel industry. This due to the fact that apparel industry is a labour intensive industry. For China it is extremely important that they somehow do not let this industry become noncompetitive and to achieve this they can go to any extreme. Moreover, China is a close society in many ways will not
let their industry get hurt whatever may be the reason, unlike India that has a transparent and open economy.
Vijay Agarwal, Creative Garments, Mumbai..
No doubt the news about China’s cost going up is correct, but another truth is that they have been the most successful players as far as the apparel industry is concerned. They are still at very strong position due to a number of reasons. Firstly they have a wide range in fabrics and secondly lead times and delivery schedules are far better than us. Furthermore, productivity and prices advantage has always been with them. In such a scenario, a country like Bangladesh can definitely extract maximum business as they have the fabric, good cost of production and high scales of productivity, even the production facilities are extremely impressive. As far as India is concerned, it is going through a very tough phase and we cannot predict what is going to happen in the near future. The cost of production is high, productivity is low, rupee is getting stronger and there are a lot of other factors that are making it difficult for exporters to even survive. I would like to quote an example of Tirupur, which has been one of the most important and productive centres, surprisingly, the cost
of production there also has gone up and the small and middle level exporters are in a mess. With the kind of
systems China will be able to maintain its position and get regular orders too.
Raj Sethi, Maple B.C. Gurgaon.
I firmly believe that China will be in the race as a strong competitor. Many of the buyers I am working with are still very confident about China, interestingly; they are sourcing hand made products and value added products at better prices from China. India has always been a preferred option for value added products but the trend can change in the coming days as companies in China are coming up with similar designs made from machines. No doubt there are some specialised products that come to India only and India offers small quantities also, but quality is an issue. I deal in silk products also and when I go to market to buy silk I see that it is imported silk from China; exporters here import silk from China, do value addition and then sell it so they cannot match prices with China in such product categories.
Meghna Sharma, Lemond Agencies, Delhi..
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