European and American clothing buyers are targeting sub-Saharan Africa

Recently, a survey on the apparel industry conducted by consulting firm McKinsey showed that the world’s largest apparel retailers have expressed great interest in sourcing from sub-Saharan Africa. According to the survey, 40% of buyers believe that sub-Saharan Africa will play an increasingly important role in the apparel industry in the next five years, while this figure was only 24% in 2013.
​Brand retailers will increase purchasing volume 10 times
In this report, what is even more impressive is that the chief purchasing officers of major brands such as H&M stated that by 2020, brands will increase their purchasing volume from sub-Saharan Africa by nearly 10 times . Taking H&M as an example, the brand’s current purchasing volume in Africa accounts for 0.3% of the overall purchasing volume, and this figure will increase to about 2.8% in 2020. It is reported that the chief purchasing officers under investigation come from 40 leading clothing brands in Europe and the United States, and their annual global purchasing volume reaches approximately US$70 billion.
Achim Berg, head of McKinsey’s apparel, fashion and luxury goods department, said: “Looking at the current export situation of global apparel, sub-Saharan Africa’s market share is very small, accounting for only 0.56% of the world’s total apparel exports. , exporting about 2.6 billion U.S. dollars in clothing every year. This is obviously not comparable to China, even compared with ASEAN countries. Bangladesh exports 25.4 billion U.S. dollars in clothing every year, and this is only 1/10 of Bangladesh. It can be said that in In the field of apparel production, sub-Saharan Africa still has huge untapped potential.”
In the survey, Ethiopia became one of the most important purchasing destinations in the eyes of apparel buyers for the first time. 28% of chief procurement officers expect to purchase from Ethiopia in 2020, while 8% already plan to increase their share of procurement in Ethiopia. 13% of chief procurement officers will start purchasing in Kenya in the same year, and 5% are preparing to increase purchasing in Kenya. In addition, 1/4 of the companies surveyed stated that they had purchased clothing products from sub-Saharan Africa in the past 12 months; 1/3 of US buyers and 1/10 of European buyers included this place in their purchases. plan.
​Small buyers dare not act rashly
Although most interviewees agree that sub-Saharan Africa will play a more important role in the apparel industry in the next five years, many small and medium-sized enterprises still have not begun to deploy specific procurement plans. The reason is that compared with ASEAN countries, sub-Saharan Africa currently has many disadvantages that cannot be ignored, such as backward infrastructure and incomplete industrial chains.
Achim Berg said: “Sub-Saharan Africa will definitely increase its share of global apparel product exports in the future because the cost advantages here are very obvious, such as labor and energy costs, but there are still some obstacles that are difficult to overcome in the short term. “Countries such as Kenya must work hard to combat corruption, achieve legal justice, and find ways to improve production efficiency.” In addition, the shortage of technical talents and well-trained middle managers is also an important challenge facing sub-Saharan Africa.
There is no doubt that sub-Saharan Africa is the key market for future development of the apparel production industry. McKinsey’s report shows that if no improvements are made here, export growth will continue to stay at the current level. In this case, clothing exports to the United States will be US$500 million per year in the next five years, reaching approximately US$700 million in the next 10 years. However, if these countries can upgrade their equipment, train skilled workers, and attract enough buyers and capital, astonishing growth could occur. It is estimated that in the next five years, sub-Saharan Africa’s exports to the United States alone will reach US$1.2 billion per year. In the next 10 years, this figure will increase to US$3 billion, equivalent to an annual growth rate of 20%. However, it will take countries across the land several years to achieve improvements.
According to the report, whether European and American clothing buyers purchase in Africa also depends on the fluctuations of the global foreign exchange market, the investment model of clothing manufacturers, and the willingness of the local government.