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Origin Africa: Certification, Overhead or Enhancement
International Apparel Federation
Matthijs Crietee, Secretary General
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96
97
98
99
100
101
102
C O N S U M E R C O N F I D E N C E I N D E XAvg of Jan 2014 – Aug 2017 = 100
China US OECD - Europe
SOURCE: OECD
What’s driving sourcing and supply chain trends in the apparel industry in 2017?
Technology
Constraints
Market needs
Organisation of the supply chain
Drivers Explained
• Constraint: the world is running out of cheap countries
• Constraint: Price instrument is overused
• Technology: Improving productivity
• Technology: Making supply chain more effective
• Market: Wants omnichannel, available, functional, cool
• Market: Growth outside of US and EU
• Market: Growing pressure to be really accountable for workingconditions in supply chain increases
Technology is enabling change
• Accelerating the use of technology in the industry. Particularly the use of computing power:• to digitalise the product development and sales processes,
• to involve consumers in design through co-creation, to enhance their shopping experience.
• to feed data from own retail directly to design and product development and to use of ‘big data’ to improve forecasting
• To improve the supply of information to consumers about the product and the production process
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Global trade and consumption trends
•Asia/emerging economies on the rise as market and as importer
$-
$50.000
$100.000
$150.000
$200.000
$250.000
$300.000
China USA Germany United Kingdom India Italy France Russia Brazil Canada
B I G G E S T A P PA R E L M A R K E T S I N R E TA I L S A L E P R I C E I N U S $ M I L L I O N
2011 2012 2013 2014 2015 2016
SOURCE: EUROMONITOR
$480.431
$299.517
$298.272
$92.408
$72.359 $52.590
M A R K E T S I Z E I N R E TA I L S A L E S P R I C E I N U S $ M I L L I O N
Asia Pacific Western Europe North America Middle East and Africa Latin America Eastern Europe
SOURCE: EUROSTAT
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0
1
2
3
4
5
6
7
8
2000 2010 2015 2016 2020
GD
P g
row
th a
nn
ual
per
cen
tage
ch
ange
Year
Real GDP growth (annual percentage change)
Advanced economies
Emerging market anddeveloping economies
World
Source: IMF
Asia’s exports of clothing in billions of US dollars. Source: ITC
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02468
1012141618
Value in2009
Value in2010
Value in2011
Value in2012
Value in2013
Asia's exports of clothing in Billions of US dollars
To the ASEAN
To the Brics
Global trade and consumption trends
•shift from China to Vietnam, Cambodia, Bangladesh but China still by far themain exporter of apparel in the world.
78%
3%
2%
16%
1%
Import USA from the world
Asia
Europe
Africa
Latin America and Caribbean
Overig
35%
27%
30%
8%
Asia export to the world
Europe
USA + Latin America and Caribbean
Asia
Other
60%
35%
4% 1%
EU-28 import from the world
Asia Europe Africa Other
G L O B A L A P PA R E L T R A D E F L O W S I N 2 0 1 6
(BASED ON VALUE)
SOURCE: INTRACEN
$-
$5.000
$10.000
$15.000
$20.000
$25.000
$30.000
2011 2012 2013 2014 2015
China & Hong Kong Bangladesh Viet Nam Italy India Turkey Spain Indonesia Cambodia Pakistan
$175.000
$180.000
$185.000
$190.000
$195.000
$200.000
$205.000
$210.000
Country 2011 2012 2013 2014 2015
China & Hong Kong $178.278 $182.326 $199.451 $207.214 $192.498
Bangladesh $ 19.214 $ 19.788 $ 23.500 $ 24.583 $ 26.602
Viet Nam $ 13.149 $ 14.442 $ 17.148 $ 20.174 $ 23.462
Italy $ 23.272 $ 22.165 $ 23.739 $ 25.195 $ 21.249
India $ 14.671 $ 13.927 $ 15.542 $ 17.742 $ 18.254
Turkey $ 13.947 $ 14.289 $ 15.393 $ 16.667 $ 15.120
Spain $ 9.628 $ 9.983 $ 11.591 $ 12.530 $ 11.756
Indonesia $ 8.045 $ 7.523 $ 7.692 $ 7.669 $ 7.593
Cambodia $ 3.994 $ 4.294 $ 5.025 $ 5.338 $ 5.937
Pakistan $ 4.549 $ 4.213 $ 4.548 $ 4.991 $ 5.023
1 0 B I G G E S T A P PA R E L E X P O R T E R S I N U S $ M I L L I O NSOURCE: WTO
0
5000
10000
15000
20000
25000
30000
2011 2012 2013 2014 2015
S I X FA S T E S T G R O W I N G A P PA R E L E X P O R T E R S B Y P E R C E N TA G E I N U S $ M I L L I O N
Bangladesh Viet Nam India Cambodia Poland Jordan
SOURCE: WTO
€ -
€ 2.000.000.000
€ 4.000.000.000
€ 6.000.000.000
€ 8.000.000.000
€ 10.000.000.000
€ 12.000.000.000
€ 14.000.000.000
M A J O R K N I T W E A R E X P O R T E R S T O E U - 2 8
Jan.-Dec. 2000 Jan.-Dec. 2010 Jan.-Dec. 2016
SOURCE: EUROSTAT
€ -
€ 2.000.000.000
€ 4.000.000.000
€ 6.000.000.000
€ 8.000.000.000
€ 10.000.000.000
€ 12.000.000.000
€ 14.000.000.000
€ 16.000.000.000
M A J O R W O V E N A P PA R E L E X P O R T E R S T O E U - 2 8
Jan.-Dec. 2000 Jan.-Dec. 2010 Jan.-Dec. 2016
SOURCE: EUROSTAT
Global trade and consumption trends
• Need for flexibility, fast(er) fashion andcustom made products leading tosourcing closerby?
China-Asia Textile Forum, Shanghai, March 13, 2017
€ 23.968.759.643
€ 27.199.905.671
€ 33.355.893.068
€ 15.062.387.415
€ 33.358.637.553
€ 43.784.352.307
2000
2010
2016
TOTAL DISTRIBUTION BETWEEN FAR AWAY AND CLOSE BY SOURCING OF THE EU-15 FROM THE 45 BIGGEST SUPPLYING COUNTRIES
(PER HS CHAPTER)
Close by Far away
SOURCE: EUROSTAT
Global trade and consumption trends
•Investments are taking place in Africa, coming from US, India, China andTurkey. In some cases, export is rising, but no substantial position as exportingpower yet.
$-
$100.000.000
$200.000.000
$300.000.000
$400.000.000
$500.000.000
$600.000.000
$700.000.000
$800.000.000
$900.000.000
$1.000.000.000
Mauritius Madagascar South Africa Lesotho Kenya
2000 2010 2015
T O P 5 S U B S A H A R A N A P PA R E L E X P O R T E R S T O T H E W O R L D I N U S $
SOURCE: INTRACEN
# 6 - 9 S U B S A H A R A N A P PA R E L E X P O R T E R S T O T H E W O R L D I N U S $
*No data available of 2015
SOURCE: INTRACEN
$-
$20.000.000
$40.000.000
$60.000.000
$80.000.000
$100.000.000
$120.000.000
Ethiopia Tanzania Mozambique Swaziland*
2000 2010 2015
Country 2000 2010 2015
Mauritius $ 947.577.344 $ 657.987.773 $ 762.050.619
Madagascar $ 308.584.192 $ 347.730.706 $ 414.576.295
South Africa $ 218.143.244 $ 424.887.046 $ 410.803.356
Lesotho $ 161.000.000 $ 182.572.215 $ 300.309.908
Kenya $ 8.766.964 $ 189.000.000 $ 282.947.880
Ethiopia $ 228.320 $ 12.171.287 $ 77.937.381
Tanzania $ 2.976.073 $ 11.654.355 $ 21.899.637
Mozambique $ 6.207.610 $ 607.107 $ 1.223.206
Swaziland** $ 124.014.400 $ 49.205.730
$-
$100.000.000
$200.000.000
$300.000.000
$400.000.000
$500.000.000
$600.000.000
$700.000.000
$800.000.000
$900.000.000
$1.000.000.000
Mauritius Madagascar South Africa Lesotho Kenya Ethiopia Tanzania Mozambique Swaziland*
2000 2010 2015
S U B S A H A R A N A P PA R E L E X P O R T E R S T O T H E W O R L D I N U S $
*No data available of 2000 **No data available of 2015
SOURCE: INTRACEN
What’s driving sourcing and supply chain trends in the apparel industry in 2017?
Technology
Constraints
Market needs
Improve, not move
Digitisation is the new frontier
New markets, complex markets
Opportunities, also for Africa
From a supplier’s point of view, knowing these trends, what to do?
• Improve productivity
• Compete on speed and supply chain efficiency, invest in flexibility and in communication, add services
• Develop new products, invest in upstream knowledge
• Develop more environmentally sustainable ways to produce and to source
• Diversify markets
From an association’s or government’sperspective, to gain a place in current apparelsupply chains, requires different skill sets. It is recommended to set up knowledge transfer programs on, among other subjects:
• Lean manufacturing, factory organisation, efficiency, reduction of waste, automation.
• Upstream knowledge, chemistry, recycling, product development.
• Software, supply chain organisation, mass customisation, flexibilityenabling techniques.
• Retail, merchandising knowledge
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Building Bridges in the Fashion Chain
International Apparel Federation
www.iafnet.com
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