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Asian clothing industry market concentration, rising integration: ILO

In the years prior to the pandemic, the Asian garment market expanded in value, according to a report by the International Labor Organization (ILO), but market concentration in this sector continued to grow.

Integration and concentration is limited to large, vertically integrated supplier groups, but also includes redistribution of functionality between buyers and suppliers, the latter being product design and development, inventory management, inventory management, logistics, factories. Undertake more and more elements of choice. According to the research outline, production plans for multiple plants.

The top 10 clothing brands have steadily increased their market share in the region, from 8.8% in 2011 to 11.4% in 2020. Similarly, the top 10 clothing brands expanded their market share from 17.9% in 2011 to 29.1%. In 2020, he gave an overview entitled “Clothing Industry after COVID-19 in Asia”.

Only 20 companies earned about 97% of the economic benefits of the Asian garment industry. Twelve of them have been among the top 20 in terms of economic gain over the last decade. The pandemic continues to test the resilience of companies and favors the largest and most capitalized companies, so it is unlikely that a recovery will change these trends. The ILO said there is a good chance of further integration.

As an example, Nike has significantly reduced the number of shoe factories it procures globally from 163 in 2010 to 112 in 2019 (minus 31%). The number of garment factories also decreased from 631 in 2019 to 334 in 2020 (minus 47%). Industry observers expect these trends to continue beyond the COVID-19 crisis.

Many observers expect small-lot production, primarily SME-led, to grow in the post-pandemic period. In some cases, garment lead times and inventories in this market segment can be reduced by “cloud-made” technologies featuring automated resources, cost planning, and logistics, the research report said.

Prior to the pandemic, Myanmar had emerged as a new frontier destination for global garment procurement, although it was still smaller in size and value than its neighbors, such as Bangladesh and Vietnam.

After the February 2021 military coup, many uncertainties emerged about the future as a manufacturing hub, even though some brands resumed sourcing from the country after a previous outage.

Fiber2Fashion News Desk (DS)

According to a research report by the International Labor Organization, the value of the Asian clothing market expanded before the pandemic occurred, but the concentration of the market continued to increase. Consolidation and concentration is limited to large vertically integrated supplier groups, but also includes redistributing functionality between buyers and suppliers.



Asian clothing industry market concentration, rising integration: ILO

Source link Asian clothing industry market concentration, rising integration: ILO

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