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Article 09-09-2022

Challenges Abound meeting ESG goal

08 September 2022, Mumbai:

The estimated size of the worldwide textile market in 2020 was close to $1000 billion, and it is expected to rapidly increase at a compound annual growth rate (CAGR) of 4.4% from 2021 to 2028. In the upcoming years, the market is anticipated to be driven by rising demand for apparel/clothing from the fashion sector and the development of e-commerce platforms. Five of the seventeen Sustainable Development Goals (SDGs) are climate action, gender equality, responsible consumption and production, proper sanitation followed by clean water, and decent work and economic growth—which are related to the textile sector. Globally, textile firms are aggressively promoting pollution-reduction techniques and establishing emission targets to slow climate change.

A critical part of the ESG initiatives is responsible manufacturing

The textile sector, which ranks among the most polluting in the world, must look into sustainable practices to reduce resource consumption and pollution, enhance worker safety, and protect customers' right to make informed purchasing decisions. Agriculture, manufacturing, processing, fabric care, usage, recycling, and disposal are part of its supply chain. The semblance is that textile industry has started to take leadership in limited sense delivering real impact, focusing on reducing or controling its water & carbon footprint.

Therefore, the adverse effects on the environment must be considered in the sustainable growth of the textile industry, and appropriate mitigation measures must be put in place. The capacity of sustainable textiles to decrease waste by ensuring the reuse and recycling of goods while reducing the consumption of resources like land, water, and oil is crucial to the industry's survival. The textile sector should also concentrate on sustainability-related issues, such as protecting the environment and public health, workplace safety, gender equality, and satisfying customer demand for eco-friendly textile goods.

Green sourcing-supply chain

The cliche in the power corridor is," A green supply chain is a requirement for profitability as businesses stare today heigtened levels of operational and financial risk". Green Sourcing stands as a significant step in the textile industry at large. Introduction of new sustainable procedures and rules for all sourcing departments, which will increase value.

Take note of the availability of raw resources in this market and sector that might be practical and long-lasting. A critical factor in the industry that may be considered to improve its operating system is the comparison of the costs of sustainable and non-sustainable products and services.

AN ESG SNAPSHOT

Giving a quick context of challenges organizations are confronting especially in India include obtaining ESG metrics from supply chain partners and third parties to validate. Therefore, its also essential to do regular reviews and monitoring while modifying the sourcing strategy to follow the requirements and expectations of the designated organization.

Factoring in energy transition cost, supply chain sustainability commitment goals and regulatory compliance are some of the odds while reaching sustainability in the textile industry. Achieving sustainability without sacrificing commercial competitiveness, changing from a low-cost ready-made garment/apparel business to one that produces value-added goods. Promoting more investment in independent R&D and strengthening industry-institute partnerships. And increasing the ability to innovate and giving the resources needed to keep such inventions alive.

Future Roadmap

EY's one of the earlier report mentions," With the EU Strategy for Sustainable and Circular Textiles, the Commission aims to ensure that by 2030, textile products have a longer life, recyclable where possible. In line with the proposed ESPR, the Commission will introduce mandatory ecodesign requirements for textiles focusing on aspects of product design". The Companies Act, of 2013 introduced one of the first ESG disclosure requirements for companies.

The article is getting readers' trade insights sharing how the strategy will help the EU shift to a climate-neutral, circular textile economy pushing sector-producing articles meant to be environmentally sustainable. IOTs is transforming the businesses/sectors globally & AI can help business stakeholders visualize their ESG data, and visibly green hydrogen solutions to accelerate the clean energy transition can be some of the ways to transit in the direction of attaining neutrality as stated by many corporates.

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Article 09-09-2022

Textile Industry & the ESG

07 September 2022, Mumbai:

All corporate stakeholders highly emphasize their commitments to the environment, society, and governance (ESG). These stakeholders, who range from investors to consumers, have made it plain that they want companies to be proactive in addressing ESG risks and opportunities as part of their entire business plan.

In reality, the demand from the stakeholders for business leaders to develop sustainability practices that benefit not just the bottom line but also have a more significant social impact has pushed this interest to a breaking point. Notwithstanding that the textile & apparel/garment sector is one of the biggest job creators and significant forex earners for most of the economies.
Long-term ESG vision
Studies that indicate stakeholders consider ESG accomplishments to be a crucial component of company performance support these demands. Businesses offering ESG more effectively are likely to perform better on traditional metrics. This is why ESG efforts are intensifying, and sustainability is integrating into all phases of the supply chain, from recycling garbage and using eco-friendly raw materials to training suppliers. This affects all industries, and the textile sector is no different.
How to get ESG right for the textile industry
Due to its longstanding reputation as a significant polluter, the textile sector is under pressure to become sustainable, enhance worker safety, and protect consumers' right to make informed decisions. The textile supply chain includes sourcing, production, processing, fabric maintenance, and packing, all of which generate hazardous effluents. All of this must be considered when creating and carrying out mitigation strategies.
Launching the Extended Producer Responsibility (EPR) program was a significant advancement. The regulation has elevated ESG requirements across industries and gives manufacturers a sizable financial and physical duty for collecting and disposing of post-consumer trash. This has shown us the importance of ESG innovation in addressing global sustainability issues.
Fast Fashion & ESG
The textile industry is changing. Fast fashion, which has come across & seen momentum, and uptake since the 1990s, is posed with greater scrutiny as lenders/investors and end-consumers in the ever-conscious globe weigh up the environmental cost of “disposable/use & throw” apparel/garments. The changing investor demands and consumer behaviour is driving a sustainable rise in the share of such apparel/clothes that ought to be manufactured in nothing short of sustainable ways.
Green compliance: Why anyone should invest
Companies are driven to push an agenda that puts sustainability, social good, and inclusiveness on the same level as profitability and growth by cultural and legislative forces. The necessity of utilizing corporate skills to address actual issues in the real world is essential to this strategy. The EPR is vital at the post-consumer stage as well. More & more manufacturers have gradually agreed to support a reverse collection system and recycling of post-consumer trash.
Greenwashing malaise
As per industry studies, Greenwashing is driving our descent into climate catastrophe. The environment gains by recovering the resources embedded in the garbage and reintroducing them into the system. Additionally, it guards against the terrible practice of "greenwashing," in which a business portrays itself as environmentally conscientious only for marketing purposes while failing to have an impact through its sustainability initiatives.
Carbon Footprint of Textiles
One of the research gate reports states," The textile industry accounts for about 10% of total carbon emissions and has been identified as the fifth largest contributor of carbon footprints". With a focus on lowering or balancing its carbon footprint, the textile sector has taken the lead in making a genuine difference. Responsible sourcing and farming are essential components of ESG activities. This includes producing eco-friendly packaging and regenerative organic farming.
Textile businesses could imitate the post-harvest manufacturing process, which uses recycled water, sustainable energy, and effective operations to create eco-friendly fabrics. Packaging should also include recycled plastic.

The initiatives go well beyond environmentally friendly material manufacture and recycling. Along with that, there have been additional transformations from conventional to renewable energy sources.
Each sector needs a long-term ESG vision.
In reality, how the textile sector uses resources, recycles goods, reduces waste, and influences the community will determine its very future. The industry's future structure and character will depend on how it reacts to this need.
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Article 08-09-2022

SL apparel’s strategic value: Prym Intimates report

06 September 2022, Mumbai:

International apparel firms are doubling down on their investments in Sri Lanka and are expanding their production capacities, sending positive signals even in the midst of a historic political crisis & economic meltdown.

Sri Lanka recently initiated a dedicated fabric processing zone in its Eastern Province, which conforms to high standards of environmental protection and sustainability. Besides strengthening the supply chain and sustainability measures, this move will also enable the country’s apparel exporters to make greater utilization of preferential tariff schemes, by increasing local value addition. Green manufacturing is not just a business buzzword; Sri Lankan apparel industry have amply demonstrated its commitment by embracin this concept arguably much before than competition.

An internationally reputed producer of accessories for the global lingerie industry - Committed to the future – out of tradition. For almost 500 years. The basis of the company’s success has been, right from the start, the clear focus on discerning niche markets, including over two decades in Sri Lanka. It is responsible for providing quality livelihoods for over 500 Sri Lankans, the best testament to any nation is the endorsement value. As per CEO of Prym Group Dr. Ansgar Nonn,” The company has benefited immensely from its presence in Sri Lanka”.

“We are closely monitoring the situation in Sri Lanka, the good bit is what we ourselves have experienced and from the reports of our teams on the ground, disruptions to our operations thankfully have been minimal.

The situation has settled down in recent weeks, but even a few months prior, when the crisis was at its peak, the local team was able to step up and demonstrate phenomenal commitment, resilence and resourcefulness to complete our orders smoothly/near uninterupted. Experientially staging that given our past experiences and the continuous success that our Sri Lankan operations have achieved despite such major obstacles, we are even more bullish on our presence in the island, and to be very frank we are currently in optimistic mindset & are factually in the process of investing in machinery and training for our local teams, in the run upto for the launch of further production capacity,” Nonn stated.

Prologue

To place it on record Sri Lanka has an incredible track record & portfolio when anyone talks about intimate wear. Nearly 5% of the global demand for undergarments on sustained basis is coming from no where else than Sri Lanka. Therefore, given its consistency nation can proudly boast of a robust pipeline of an array of range in the product line viz bras, panties, lingerie, men’s underwear and so to say women’s nightwear.

Reasserting why Sri Lanka is seen as an ideal destination for apparel manufacturing Dr. Nonn stated it was important to consider a country which already had established a higher level of technical expertise, in order to be capable of handling global most quality demanding players like meeting Prym Group’s expectations & requirement for specialized accessories for the global lingerie industry. “We realized very quickly that Sri Lanka was the perfect fit. Even at the time, talent pool Sri Lanka with a literacy rate of 92.5% is one of the most literate anywhere in apparel industry, and therefore immensely adaptable.

Moreover, industry highly regards nation’s work ethos with the industry as a whole having an inherent relentless commitment to social and environmental sustainability in line with heightened global brands’ stated sustainability goals. Considering the Geo-strategic unique tear drop island location, ideally aligned to most of the buyers needs including ours. Over the two decades we have only seen our operations grow from strength to strength, and become an integral and valued component in our global supply chain,” Nonn stated. Not to mention the most invaluable support support recieved from relevant state authorities as a including the BOI in minimizing disruptions caused by recent fuel and energy shortages is an indomitable inspiration for many apparel producing hubs.

Nonn concludes: “I have no hesitation in talking very high about the decades experience here, notwithstanding we have seen at times volatility, but consistently, our ground teams have been incredibly creative and efficient in tackling the challenges/odds we may have experienced, but nothing has ever dampened our work spirit. Reiterating the never say die spirit of the island workforce & work ethics the latest economic & political crisis nation lately has undergone has only served to bring out the best in our people, and nobody can take away credit from them. Furthermore, our workforce spirited performance only validates our underlying original decision to foray into this market, and the let us re-emphasize that prevailing crisis has only served as an opportunity to bring out the best in our people.”

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Article 06-09-2022

Fashion space & start-ups

04 September 2022, Mumbai:

The way we shop is changing thanks to fashion entrepreneurs. A lot is occurring in the fashion business, from tech-savvy customers to the industry's walls being broken down by technology given that the Post-Covid fashion industry is started to find its feet. The new paradigm is pushing companies to align and adapt to new consumer preferences on the back of the growth headroom digital/tech intervention is providing necessitating them to raise more money and embrace technology earlier than ever.
Fashion entrepreneurs are increasingly expanding outside eCommerce. The business is getting hotter. The advent of ‘Fashion Startups’ is changing the way consumer buys n shop. The trade is coming to a realization, of how Startups' arrival will be etched in history unraveling how fashion is produced distributed, and consumed by consumers of the day. Experts anticipate that the fashion industry will continue to grow and that fashion startups will play significant roles in this modernization process as the industry moves toward modernization and more startups emerge in the sector.

The approach to fashion trade is shifting thanks to fashion entrepreneurs. Many fashion startups are emerging, helping to transform the sector. Previously, these sorts of businesses were constrained by their enormous risks. Fashion startups are the newest businesses that market apparel/clothing, accessories, cosmetics, and other items that may be used to seem fashionable or nice. These firms continually bring about improvements challenging the established fashion industry business model to become a center of the newest and finest fashion. The semblance is that 'Fashion Startups' are been seen to drive innovations in the space such as VR fashion, AR apparel, AI & IOTs of the world.

Simplistically how do we describe what luxury means to you can be," very rich, pleasant, and comfortable surroundings". Most cutting-edge fashion businesses today have transformed from being an exclusive luxury of high society to a means of expressing personal style for people from various backgrounds. The technology here solves the issue of finding apparel/garments that suit one's body form, skin tone, and personal taste. As a result, fashion entrepreneurs now focus on producing unique items for each consumer. With new technology making it simpler for everyone to acquire what they want at a price they can afford, fashion companies are predicted to rule the globe in 2022. So let's explore the most recent developments and the businesses influencing the fashion industry's direction.

The evolving fashion business today contributes to the success of individuals in a society that is becoming more and more image-conscious. Catwalk events clearly are a communication funnel/a convergence between fashion designers & end consumers allowing designers exhibiting ideas, and merchandise on live models to live up to the experience.
Of late, Indian fashion startups are been witnessed to have reinvigorated the Indian fashion market because of inherent advantages, for instance, start-up costs are modest, and as in many cases, you won't require employees or even an office.

Fashion startups hack for curating niches in order to start getting a better fit is to try on. The desires of men and women who have trouble fitting into conventional clothes stores are the same. The cliche goes is," Fashion defines our personality and distinctively we as a person/persona/an embodiment". If you've ever had trouble finding the right fit or have a passion for bringing fashion to everyone, starting a plus-size apparel/clothing store may be a significant business venture.

It is anyone's guess that the entry barrier here is factors like attaining economies of scale (given little money/no capital in hand) in a space wherein its cottage industry/business may be conducted from a home in many cases on the one hand and product differentiation on the other. Undeniably the innate advantage of a home-based business is that fittings are more private and comfortable.
Pulse Check
The fashion industry today is grappling with multiple headwinds amid rising geo-political risk concerns fuelling supply-chain disruption, and slackened demand.
As per one McKinsey report,” From a geographic perspective, China was the standout performer over 2021, as its economy recovered much faster than those of other countries. In 2022, the industry’s growth will likely be driven by both China and the United States, while Europe lags behind”.
India has emerged as one of the world's fastest-growing fashion markets over the past few years. It is projected to grow at 15 percent CAGR by 2022 and become a $102 billion market for apparel, as per a recent report.

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Article 05-09-2022

India-Bangladesh: Textile trade ties

07 September 2022, Mumbai:

The current visit of the Bangladesh PM to the Indian side is part of the enduring high-level political engagement between the two neighbour ally nations. Both sides have shown keenness to start negotiations on a bilateral Comprehensive Economic Partnership Agreement (CEPA) later part of the year underpinning new identified sectors to consolidate & deepen their bilateral relations to expand bilateral trade and investment.

Here it is very topical to mention that CEPA will be among the trade agreements Bangladesh is prioritizing with its major trade partners, as it will lose duty benefits once the country graduates to developing nation status in 2026. To place it on records India and Bangladesh this Tuesday signed seven meaningful agreements spread across sectors, including water resources, railways, space technology, judiciary, scientific and technological cooperation, and TV broadcasting. It was a part of

Sheikh Hasina is here on a four-day state visit. Importantly sources indicate more youth exchange programmes are on the anvil. Furthermore, next month India will receive a 100-member youth delegation from Bangladesh.

One of the key takeaways from this bonhomie is that leaders of both countries have agreed to deepen further develop partnerships in sectors like the upgradation of railway projects in that country. India is in good earnest pushing for greater cooperation with Dhaka in various sectors.

Piyush Goyal, Textile Minister, stated," There is a certain inevitability that two countries for mutual gainful situation need to build resilient supply chains and explore investment growth opportunities in areas like textiles, jute products, and leather and footwear".

Perspective

Industry data reflects conspicuously that Bangladesh is India’s sixth largest trade partner with bilateral trade rising from $2.4 billion (two points four) in 2009 to $10.8 billion in 2020-21. India is the world's fifth biggest T&A/T&C exporter with a shy of 5% share of the $840 billion global market, while China has more than a third of the global market share.

Also, it is to be noted that now is the time for taking a share of the existing pie rather than anything else given global trade is shrinking & current macroeconomic variables.

Putting it in immediate context India's exports were neck to neck with nearest rival Bangladesh roughly a decade ago but over the years latter has leapfrogged- particularly on apparel/garments - amongst many of the reasons due to higher labour costs, disadvantages of lack of FTAs/LDC/MFN status etc that make Indian apparel/clothes 20% or thereabout pricier.

Two-way street

Given the common shared values, the two nations have India presents a big market opportunity for Bangladeshi apparel suppliers if the central government pursues the given policy intervention of the current dispensation. The FBCCI president said earlier that," India could be a major supplier of yarn and cotton to the garment industry in the near future and called for developing infrastructure in the Indian part of the border land ports to boost trade, according to Bangla media reports".

The paper tries to present the data analysed by Team AR from various sources to pack a punch that, India exported US $ 1.72 billion worth of cotton yarn to Bangladesh in the calendar year 2021 from that of US $ 657 million in 2020 and the US $ 539 million in 2019.

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Article 07-09-2022

Textile industry & Landfill waste management

05 September 2022, Mumbai:

One of the basic requirements of people in the current society is textiles. Globally, the textile sector has a sizable production capacity. The textile industry is an industry that deals with articles made from fibers, threads, or yarn. It is evident that The textile and clothing/apparel (T&A) industries constitute a significant piece of manufacturing production, mass employment, and forming a meatier chunk of trade in most developing countries globally.

Textiles are created to serve various purposes and are composed of multiple fiber types blended in different ratios. Fiber applications often fall into one of the following three categories: industrial, home furnishings, and apparel/clothing.
Consumer demand, which is affected by the status of the economy, plays a factor in this as well. Customers respond to changes in fashion in both apparel and home furnishings. Clothing/apparel may swiftly fall out of style due to seasonal changes, which encourages replacing and getting rid of old but still excellent quality items. In reaction to a "throwaway society," manufacturers will progressively produce large volumes of apparel with little durability.

Most textile businesses focus on creating a suitable waste management system for sustainable growth. It might significantly impact the age of home textile waste. The depletion of natural resources, rising costs, and dwindling availability of disposal sites are the driving forces behind the significance of trash reduction, reuse, recycling, and management.
It is incredibly shocking that as per industry reports every year some 9 million plastic-based wastes are disposed of in the landfill. The atmosphere is also chemically contaminated by the combustion of all the goods within the mills. Textiles produce a sizable quantity of solid waste in terms of production capacity. While it might not have much of an effect on the manufacturing sector's waste generation.
Commercially, the quantity of textile waste generated depends on how much textile product is produced; the more made, the more trash there will be. Let us reckon that Textile consumption impacts the environment through both pre-consumer and post-consumer effects, also a practice of these articles should be worn a few times before being discarded has led to nearly 85% of textiles ending up in landfills each year and here it may be sanguine to argue that you have to factor in fast fashion as a catalytic action.
Despite a long history of resource conservation in the textile sector, a significant amount of unneeded waste is still created annually. For instance, they could make it difficult for us to breathe, keep warm or cold, or grow the food we require.
Problem-solving approach
The disposal of used clothing and recycling is a critical piece of the entire textile user journey.
The trifecta of problems is the source of the waste's high level. Clothing/apparel and textiles (T&A) generate enormous amounts of garbage, which is dumped in landfills all over the world. It takes time for the garment to decompose, and certain materials, like polyester, even release chemicals into the environment.
It depends on whether we want to be part of the problem or the solution.
Pollution - Textiles contribute to the breakdown of the air and water. The chemicals and water needed to make the textile colors must be disposed of after usage. Some of the ways and means to curb and mitigate the ill effects of textile waste management are as follows:
Composting
Regeneration
Albeit It may not be a panacea today but the theme of ‘How to execute reuse and recycling of post‐consumer textile waste is more critical than ever before".
The trifecta of problems is the source of the waste's high level. Clothing/apparel and textiles (T&A) generate enormous amounts of garbage, which is dumped in landfills all over the world. It takes time for the garment to decompose, and certain materials, like polyester, even release chemicals into the environment.
Pull V/s Push
Most textile businesses worldwide typically create a department for sustainable development to carry out the waste management procedure. Increasing awareness among consumers has been once the driving force for making greener products. Increasingly it is been argued today that disposal through Landfills is how much more sustainable as arguably they are the earliest form of waste management, the moreover modern-day big revelation is that these sites per se aren't good for our planet. Notwithstanding the reality Modern landfills are aptly-engineered and managed outlets for the disposal of solid waste be it from textile.
Way Forward
The central government applies several rules, guidelines, and institutions to direct the textile industry's transition to an ecologically friendly method.
The good news is best practices like Eco-friendly textiles made from 100% recycled PET fibres and blends with MMF or a sustainable myriad of fibres are been popularly used in a variety of applications viz home textiles, apparel, furnishings, upholstery, technical textiles, and many more imaginative applications & that is where efforts are. Let us clear the air on the consumers' heightened awareness created lately on the back of global climate change showing up & having motivated consumers to come forward and contribute in this field to drive the synergies.
Today there is a strong sustainability argument pushing for Fashion and textile circular economy case.

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Article 05-09-2022

Indian exporters: Set to ramp up production capacity

03 September 2022, Mumbai:

Indian exporters are ramping up their production capacity. This includes getting into the manmade fiber segment, lowering their cost of production, and working on meeting global standards.

According to one PIB report published earlier," Merchandise exports from India have reached USD 417.8 billion in the current financial year. This figure excludes the figures from non-EDI Ports and adds that it is likely to exceed $418 billion, an all-time high in India’s export history.

India achieved the highest monthly value of merchandise export in March 2022 amounting to USD 40.38 billion, an increase of 14.53% over USD 35.26 billion in March 2021 and an increase of 87.89% over USD 21.49 billion in March 2020.

The exports have witnessed significant growth in non-petroleum goods also in April 2021-March 2022 which was USD 352.76 billion, an increase of 32.62% over USD 266.00 billion in April 2020-March 2021, and an increase of 29.66% over USD 272.07 billion in April 2019-March 2020.

Apart from a diversified range of merchandise goods exported during 2021-22, India’s merchandise exports have also seen a significant increase in different countries, especially, developed countries. Exports to USA, UAE, Bangladesh, Netherlands, Singapore, Hong Kong, UK, Belgium and Germany grew by 46.4%, 66.9%, 64.5%, 90.5%, 26.8%, 7.8%, 28%, 90.4% and 21.1% respectively over April 2020- March 2021".

At one of the forums Hon'ble Textile Minister, Piyush Goyal said, " Notwithstanding the challenges posed by successive waves of Covid (2nd and 3rd wave), India’s merchandise trade performance has shown impressive growth and exports remained above USD 30 billion for twelve consecutive months from April 2021 to March 2022".

As per one fashionatingworld.com report," Indian apparel exports rose by about 32 percent from April to June this fiscal as against the same period last year. Free trade agreements with countries including the UAE, Australia, and the UK are expected to help neutralize the advantage which India’s competitors used to enjoy in some of the important markets. Now the apparel sector is awaiting the new Technology Upgradation Fund Scheme and the production-linked incentive scheme.

As per Niti Aayog's EXPORT PREPAREDNESS INDEX 2021 report," Despite the global factors, it is also heartening to see the success of our Hon’ble Prime Ministers’ economic Vision, AtmaNirbhar Bharat. The increase in domestic manufacturing capacity and competitiveness is helping India’s exports grow at a record pace. Case in point is Apparel & clothing (knitted or crocheted) - are some of the sectors with significant export growth rates this year".

Efforts are being made toward promoting the brand India on various global platforms as a trusted supplier by showcasing its strength in sustainability, circularity, and ethical sourcing. The demand for Indian textiles in the domestic and overseas markets is high. Especially after the pandemic, one sector under textiles that has really got a boost has been home textiles.

The seven mega textile parks that have been launched are aimed at reducing the high logistics costs as well as the fragmented value chain which obtains now. Most of India’s major exporting destinations like the US and EU are going for a China plus one strategy, which will prove to be beneficial for India.

As per one of the recently published articles,” Naren Goenka, Chairman, Apparel Export Promotion Council (AEPC), has appealed to the garment industry to grab the emerging global opportunity by revamping production capacity, reducing cost, focusing upon MMF, and embracing best sustainable practices”.

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Article 03-09-2022

Textile Sector: Unfolding global geopolitical & economic situations

07 September 2022, Mumbai:

Inflation-induced economic stress and energy crisis are affecting the global textile sector and will have far-reaching implications on development issues. Economic headwinds are been witnessed e.g. soaring energy and consumer product costs leading to an ever-present risk of mismatches between energy supply and demand. Coupled with a reduction in disposable incomes in the UK and EU & looming recessionary pressures will impact the global textile industry.
Strengthening Dollar
According to reports," The US dollar is on a tear, strengthening around 11% since the start of the year & this will increase the price of gasoline paid by importing nations and will put pressure on debt repayment by developing countries like Sri Lanka and Pakistan, which are major textile manufacturing countries. This led to the devaluing of currencies in other countries & is evident from the ongoing crisis conditions in the United Kingdom and Sri Lanka.
The shift in the geopolitical landscape
The World Economic Forum's Global Risks Report 2018 argued that geopolitics is becoming not just multipolar, but also “multi conceptual”. The ongoing Russia-Ukraine war and mounting tensions between China and Taiwan are all contributing to the slowing of the textile sector. There has been a change of guard in the UK with The Rt. Hon. Ms. Liz Truss, becoming the PM; had a direct impact on economic woes there, which resulted in the change in the party leadership. As stated on 07-09 by her the priority is to tackle the energy crisis so that cost of living raises can be controlled. If uncontrolled, analysts predict that inflation may spiral up to 13.3% by Spring in the UK. Such a dire economic situation may affect the sales of textiles and other commodity items.
Demand headwinds
“Yarn enquiry is not there,” stated Mr. V. Shanmugam, GM of Aruppukkottai, Jayalakshmi Textiles, India a cotton spinning mill having 2k ring spindles. Mills are forcing additional weekly holidays or reducing production in states like Gujarat, A.P. & even in T.N. “Our production has come down from 12 tons/day to 8 tons/day,” added Shanmugam.
While the issue surrounding high cotton and raw materials costs has occupied the textile industry for a few months now, it is important to focus on the demand aspects. The demand for textile products has slowed down due to global geopolitical and economic situations.
Even at Rupees 430/Kg for 60s Ne compact cotton yarns, there are not many takers. Mills incur a loss of Rupees 30-40/Kg at such prices,” agonized Velmurugan Shanmugam.
Cautious Optimism
Textile & manufacturing sectors must adopt a new management paradigm, “Caveat Emptor et Venditor.” It indicates that both buyers & sellers must pay attention to global scenarios to have the situation under control. The industry should be cautious in its planning in terms of modernization and non-essential capital expenditure. In my opinion, it is worthwhile to postpone such activities for a period of at least 18 months.
The burden rests in the hands of policymakers and central bankers of nations to have a good grip on their economies to avoid recession. Fall-2022 will be an interesting one to watch, setting the course for the global textile & manufacturing sector for the next few years to come.
(Credits: Dr. Seshadri Ramkumar, Ph.D., CText, FTI (UK), FTA (Honorary), TAPPI Fellow (USA) & TexSnips)

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Article 07-09-2022

The gauge of consumer sentiments in festivity 2022

05 September 2022, Mumbai:

Consumers are now participants in a global market and this has a key impact on the consumer buying & preferences. The $3 trillion global fashion business accounts for 2% of the world's GDP. The underlying assumption as always is as festivity is lined up thus contextually its a most crucial time for the Indian advertising business as spending is expected to bring a lot more returns than usual.

Festive season to drive consumer spending: 48% will shop more during 2022 festive season vs 2021, says Axis survey. “Historically what has been witnessed is that sooner the festive season approaches reflecting a "festive spirit", driving consumers to buy leading to pushing volumes up including triggering non-discretionary buying. Its September analysis said that 48 per cent of consumers tend to shop more during the festive season as compared to the rest of the year. It also revealed that 20 per cent of the consumers plan to shop more this festive season in comparison to last year while 32 per cent plan to shop the same as the previous year.”

Covid & its impact

Beginning in China in 2020, the COVID-19 virus spread gradually but steadily over the remainder of the year before releasing additional strains in 2021 and causing successive waves of fatalities. Because of it, there have been several lockdowns, travel limitations, social withdrawal, and other COVID-acceptable behaviors worldwide. The situation put the retail sector, namely the fashion section, in chaos, having an influence on sales, profitability, inventory, jobs, and the entire ecosystem. When individuals were advised to stay at home as a preventative step to slow the spread of the illness, the disruption in worldwide fashion began. Markets, shopping centers, and other establishments were all closed down to rule out any chance of their coming out. This prevented customers from buying outside for months, pushing them to migrate to internet shopping. The fact that only necessities could be purchased online and that non-essential items, like apparel/clothing, could only be sold afterward made the situation much worse.

Post Covid consumer spending have revved up · E-commerce buying continues to be accelerated having already gone to level next in the global fashion landscape. Customers are already buying luxury items for meeting their aspirations and desires. The last few years have seen remarkable development in the fashion industry in the new emerging paradigm. The psychology of consumer behavior has undergone sea change in the new emerging digital world.

Festive Marketing:

Though currently trade expects are sanguine to be cautiously optimistic but given macroeconomic quick indicators & demand tailwind Consumer spending sentiment in urban India is likely to be higher than what was observed during last year's festive season. Brands continue to stay optimistic that improving consumer sentiments & economic resilience shall help them bounce back and as fashion industry continues to open up on the back of corona risk concerns fading. Festivity good effect

One ET report states,”Demand for discretionary products, electronics and gift items in the festive season (August to December) is expected to be 15-25% more than what it was in the corresponding period of 2019”.

With many festivals already upon us in the next two-three months, consumers have started using Debit cards, UPI and credit cards aggressively for their sustained aspirational buying as bargain offers galore.

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Article 05-09-2022

The gauge of consumer sentiments in festivity 2022

Brand acquisition & house of brands

03 September 2022, Mumbai:

The brand acquisition seems to be the flavor of the day. Aditya Birla and Reliance Group, two of India’s prominent business groups have recently invested in designer brands like Manish Malhotra, House of Masaba, Tarun Tahiliani, Sabyasachi, and Anamika Khanna.

Both groups seem to be more inclined towards luxury brands, though they have also invested in a few premium ones, says an Inventiva report.

BRANDED HOUSE VS HOUSE OF BRANDS

As per Mahesh Singh, Founder and Managing Director, Singhi Advisors these acquisitions will give Reliance Brands and Aditya Birla Fashion and Retail (ABFRL), a chance to expand their product lines while offering the designer brands an opportunity to open more stores, introduce new products, etc.

Steady growth in the fashion industry

The Indian fashion industry has been growing at a steady rate despite a curb on weddings due to the pandemic. As per the market research company Euromonitor International, the Indian fashion market is expected to grow at a CAGR of 15 percent between 2021 and 2026.

Both Reliance Brands and ABFRL have been trying to get a piece of this growth pie. For the last few years, they have strengthened its position through new acquisitions and partnerships.

For instance, ABFRL invested in the House of Masaba to boost its beauty and personal products range. The acquisition helps the company acquire a well-known brand and a well-established consumer base.

Through these acquisitions, both these groups plan to widen their price range to include consumers from all social and economic strata. For instance, ABFRL offers a mix of brands like Van Heusen, Allen Solly, Jaypore, and Sabyasachi Couture for women.

One ET study refers," In Q1 2021, $1.3 billion of VC funding was raised by D2C brands in the US, with India at $500 million. The hyper-accelerated D2C Brands explosion made way for many disruptions, with The hyper-accelerated D2C Brands explosion made way for many disruptions, with ‘‘.

Widen products and market reach

Such collaborations benefit designer brands by allowing them to sell and distribute products across the world through big companies. They help brands consolidate their market position and unlock some value. Meanwhile, conglomerates like ABFRL and Reliance Retail are able to offer more choices in clothes, points out Aditya Chaudhury, Partner, and Argus Partners.

Investing corporate money into the designer clothing industry also offers more expansion opportunities to designers. For instance, known for its bridal lehengas, Sabyasachi Couture launched its jewelry line in 2017.

The designer brand also launched a fast fashion range in August 2021 in collaboration with H&M. Designers can also explore new markets by introducing affordable clothing or jewelry range. This ensures their clothes are bought by more number people.

Build omnichannel networks

Brand acquisition by corporate houses also helps them build omnichannel networks and adopt a direct-to-consumer approach. For instance, the strategic purchases of Genesis Luxury and Brooke Brothers help Reliance form partnerships with Burberry, Coach, Jimmy Choo, Diesel, Kate Spade, Michael Kors, Steve Madden, etc.

The paper intends to explore the basics of Brand Architecture getting readers valuable trade insights with a handful of examples. However, corporate acquisitions aren’t limited to luxury brands alone as affordable brands like Clovia, were bought by Reliance for ten times its sales this year and Amante for the same amount in 2021. Similarly, ABFRL bought Phillipe, Van Heusen, Allen Solly, Peter England, Forever 21, etc.

Both groups prefer to buy brands rather than make them. To sustain its growth momentum, they need to widen its price range to serve a wide range of consumers. They also need to retain the core value of couture brands while growing them.

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Article 03-09-2022