Where will U.S. retailers go next?

Recently, the American Apparel Industry Federation released a report on the prospects of the textile and apparel industry. The report gathered professionals in the textile and apparel industry through surveys, including fashion brand operators, retailers, importers and wholesalers. Views on procurement methods and procurement plans in the next five years.
The report shows that 89% of respondents are optimistic about the prospects of the U.S. fashion industry, but at the same time, 81% are very worried about rising costs. According to the survey, rising production and procurement costs have become the most concerning issue for the U.S. fashion industry, with 81% of respondents viewing it as the first or second largest business challenge.
​Asia’s advantages in large-scale production are not easy to replace
​What factors cause anxiety among American buyers? According to the survey, buyers said that more than half of the world’s clothing and footwear products are currently produced in China, and China’s production costs have been rising for some time, and there are no signs of stagnation in the short term. Therefore, they are looking for products in China and even outside Asia. A suitable purchasing location is imminent. However, it is not easy to find a production location that can compete with China in terms of production capacity and quality.
According to the survey, 52% of American fashion companies purchase from 6-20 countries around the world, and 26% of companies need to purchase from more than 20 countries and regions. Although 77% of respondents said they are increasing purchases from the United States, Asia, especially China and Vietnam, are still the countries from which American companies purchase most frequently. Ryan Pesko, a partner at Modern Pulse Consulting Group in the United States, said that the United States sells $60 billion worth of footwear products every year, and 82% of footwear products were purchased from China last year, which has dropped from 86% in previous years.
In the survey, the respondents’ views on Asian countries formed an interesting contrast. 100% of the respondents said they source products from China to some extent, but business growth in China has been slow due to rising labor costs and the recent economic slowdown. When asked about their plans for the next two years, 50% of companies expressed their hope to reduce purchases from China and even Asia in terms of both value and quantity. Despite what respondents say, they expect only a modest reduction and no significant change, the surveyors said. The interviewees all expressed that they are actively seeking alternative procurement locations to China. In fact, China is difficult to replace and China will remain the most important procurement base in the next few years. “Most U.S. companies are just hyping up their plans to leave China in front of the media. In fact, China’s status as the world’s main source of procurement is not easily shaken. Not only do the respondents not plan to leave Asia, but they will also add several more Asian procurement destinations. Such as Myanmar, Pakistan, Bangladesh, and Indonesia.” In addition, 60% of the respondents said they may increase their purchases in Asia, 5% said they will definitely increase their purchases, and 15% will maintain the current share. Change.
​Africa focuses on narrow market segments
Although Asia’s purchasing status is relatively stable, research has found that American apparel companies are increasing their interest in purchasing from Africa.
84% of the companies surveyed said they would try to purchase from Africa in the next two years, and 76.9% said that having a diversified global procurement base would make it easier for companies to develop.
At the same time, the “Trade from Africa” ​​exhibition held in Cape Town ended recently, mainly discussing the African Growth and Opportunity Act (AGOA) formulated and implemented by the United States. Industry experts said that African clothing and textile manufacturers will have more and more trade opportunities in the US market, but they very much need long-term preferential trade agreements to improve the supply chain and further meet market demand. ​
Steve Lamar, executive vice president of the American Apparel and Footwear Association (AAFA), said that AGOA will end next year and many Americans currently support its reconstruction. The organizer of the “Trade from Africa” ​​exhibition pointed out that during the implementation of the AGOA Act, Africa’s exports to the United States achieved a 500% increase, from US$8.15 billion in 2001 to US$53.8 billion in 2011, of which textiles and apparel The industry accounts for nearly US$1 billion. Despite the huge growth, African products only account for 1% of the U.S. market share, which means there is still enough room for African companies to expand into the U.S. market. Lamar said AAFA member companies are very interested in sourcing from Africa, but they are still waiting on the sidelines, waiting for the U.S. government to make specific commitments to AGOA.
Tony Waddell, chief operating officer of Gelvenor Textile Company in South Africa, said that as an African textile manufacturer, Gelvenor can produce very good quality products using local African yarns and technology, but due to limited production capacity, it is difficult to sell in the U.S. market Make an impact. “For African companies, the AGOA agreement is very important, but we need to realize that most African companies are small and difficult to supply the large-volume needs of the mainstream U.S. market. Therefore, seizing the segmented professional market is the only way for African companies to succeed in the U.S. market opportunity,” he said.
The concept of developing professional markets is also supported by Mercedes Gonzalez, chairman of American Global Sourcing Corporation. She said: “Africa will never become the next China because it does not have the capacity for mass production. And African companies should use Italian companies as a template to learn how they create new market segments.”This is because consumers are always hungry for new things. ”
Gale Strickler, assistant to the U.S. Textile Trade Representative, suggested that African companies need to choose appropriate areas for development to reflect AGOA’s competitive advantages. “In addition, African companies should stay away from fast fashion trends, because fashion trends are changing rapidly, and following fashion may not be what African companies are good at. Producing uniforms and baby clothing may be a suitable choice.”