What Happens to Garment in 2007?
Garment: What Happens in 2007? This article in Forum’s trade talks issue interested many readers. With quotas ending in 2007, many producers — and even countries — risk disappearing as garment suppliers in an oversupplied market. As a follow-up, we share a sample of your reactions, highlight ITC’s recommendations for action and outline the technical assistance it can offer.
To meet new market demands, garment manufacturers will need a comprehensive approach to meet buyers’ requirements: vertical capabilities; supply chain management; full service from design to logistics; and low landed costs.
Among the expected changes: the market will move from a sellers’ to a buyers’ market; prices will fall; buyers will reduce the number of sources; small firms will compete against large companies which enjoy economies of scale; and all firms will face new trade trends and additional market requirements, such as ecolabels and ethical trade requirements.
ITC recommends adopting a sector/country strategy rather than an individual company strategy — major buyers will source from a country only if there is a critical mass.
Diversifying products and markets — in mass markets there is high competition, whereas in niche markets and in larger developing countries, new market opportunities emerge.
Diversifying sourcing and developing supply management skills — fabric and accessory sourcing amount to two-thirds of the costs of a garment up to the free-on-board (FOB) point, and buyers ask manufacturers to take over this service.
Introducing e-applications, as major buyers are linking the value chain electronically.
In response to so many requests for assistance, ITC has created a tailored technical assistance programme. To help countries develop a sectoral strategy, it provides assistance in value chain analysis. To better understand competitors, it has developed a computerized benchmarking tool, “The Fit”. To get information on sourcing and improve supply management skills, ITC has tailored trade information services for sourcing requirements and is adapting existing training materials for garment manufacturers. To understand changing markets and adapt products accordingly, it is upgrading its computerized, market analysis “P-Maps” for the garment sector. To introduce information technology into garment manufacturing, ITC is creating a Business Guide on E-applications in the Textiles and Clothing Sector, which will be published in 2008.
Relative links about Garment