Apparel Industry Encounters with Truth

Post quota regime-wake up call

Order in question is 50,000 pcs of a basic men's pant in cotton twill fabric. Our factory in Bangladesh quoted $7.00 per pc as their best price. Next day you hear from buyer that order placed with a vendor in China at $6.75 per pc. Our factory in Bangladesh agreed to do the same order at 6.70 after they heard the news. Response from buyer- too late! Too bad!! Order already placed in China.

Moral of the story is that in post quota regime, the winners are going to be suppliers like this one in China. They go for big orders with all their might and quote their best price in first shot. Nobody has time to waste in going back and forth on negotiations in the new regime.

The fact that China is poised to be the biggest shareholder in global apparel sourcing market is quite obvious. They have a strong fabric base, high productivity-higher than most other countries, cheap and abundant labor, highly developed infrastructure, vertical set ups and conducive government policies. And they are going for it - all out. They deserve to get the share they are going to get post MFA.

But is China the answer to all sourcing questions?? Apparently not. Take for example a cotton voile women's top with heavy embroidery and hand sequin work, and rest assured that China still can't beat the likes of India in terms of prices/ quality/ output. Its true that to beat the Chinese for basic styles and big quantities is difficult, but not impossible. Global sourcing market is big enough to accommodate China and few more performers.

Second to China, quite interestingly, India is being now deemed as the 'next best' sourcing destination. The reasoning given is something like this. Big retailers like Wal-Mart/ J C Penney or for that matter any buyer with significant sourcing needs, would not like to put all their eggs in the same basket. Diversification of sourcing options is the need of the hour. India traditionally is known to have a rich textile base, has abundant and cheap and skilled labor. Having strong fabric base within the same geographical locations can cut down on fabric transit lead times etc.

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