Asia to keep dominating garment manufacturing industry

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Coronavirus pandemic disrupted the functions of several industries on the globe, hitting the style industry the hardest. From unsold inventory to deranged supply chain networks, the deadly virus was not only claiming lives but business too. With retailers forced to pivot the operations, many were seen turning towards the other part of Asia, moving away from China, said a report by Analytics firm- Fitch Solutions. 

Now, as China strives to move up the worthiness chain, companies are eyeing countries like Myanmar, Bangladesh, Vietnam, and Cambodia as their next manufacturing hub. However, Indian and Indonesia remain last on the list due to their restrive business conditions. These countries provide a favorable environment with cheap labor, free trade agreements, and geographic proximity to raw material producers in China and India. 

“Accordingly, we have already started to see Vietnam profiting from these trends and expect to see more investments in to the country. Furthermore, we expect Bangladesh, Cambodia, and Myanmar to see greater gains in the coming years as costs in Vietnam also rise,” Fitch Solutions said.

The report also recognized Indian and Indonesia as two potential recipients of manufacturing shifts and growth when it comes to global apparel export share. However, both will be less recommended in comparison with the other four Asian nations because of high labor costs and competition from domestic markets. 

“The countries’ large populations, at 1.4 billion in India and 274 million in Indonesia, make sure they are the second and fourth-most populous nations, respectively, on earth and advise strong growth prospect of domestic consumption,” said the report.

“We at Fitch Solutions expect rising labor costs in China to continue pushing out low- to mid-range manufacturing to cheaper cost centers across Asia”.“However, we think that it will be exacerbated by rising trade protectionism globally and geopolitical risks mounted on operating in China, as relations between China and the West deteriorate. This trend has recently occurred for at least half of a decade,” the report read. 

The report further shows that Bangladesh, Cambodia, Myanmar, and Vietnam could have high textile manufacturing potential supported by low labor costs and an accelerating population. 
Source: https://www.indiacityblog.com

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