© International
Trade Centre, International Trade Forum - Issue 4/2003
Textiles and Clothing: What Happens After
2005? This article inForum's trade
talks issue (2/2003) interested many readers. With quotas ending in
2005, 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.
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.
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.
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.
- Learning more about competitors - under the quota system there
was a guaranteed market, but from 2005 competitors will come from
everywhere.
- 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.
- Diversifying products and markets - in mass markets there is
high competition, whereas in niche markets and in larger developing
countries, new market opportunities emerge.
- Introducing e-applications, as major buyers are linking the
value chain electronically.
Need help? 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 2004.
Among those who have let us know that they reprinted this article:
the Sri Lanka
Financial Times Sunday edition, which
featured it on its first page, on the eve of the Cancún Ministerial
Conference; the Sri Lanka
Daily Times; the
Financial
Express, Dhaka, Bangladesh;
Entrepreneur magazine of
the SME Development Authority of Pakistan; the Indian Ministry of
Textiles web site home page;
Dialog Textil, the only
Romanian magazine for the textiles industry; the
Mauritius
Industry Focus, published by the country's Export Processing
Zones Development Authority; and
Apparel Online Magazine
of India.
We continue to encourage you to reprint this article or feature it
on your web site.
Matthias Knappe (knappe@intracen.org) is ITC
Senior Market Development Officer responsible for the textiles and
clothing sector.