27 June 2023, Mumbai

The fashion industry has taken notice of trendy tights, as seen on the spring/summer 2020 runways. Designers worldwide, including British designer Richard Quinn, have embraced this trend by creating tights adorned with bold floral patterns that complement their gown prints. 

Emerging opportunities; The trend of incorporating logos is also prevalent, with brands like Gucci, Saks Potts, and Fendi prominently featuring their signage on tights this season.

Balancing Fashion and Sustainability

However, the high cost of these fashionable stockings and environmental concerns have led to a boycott. 

The price of these tights often far exceeds their practical value, as they are typically worn only a few times before being discarded or torn apart, contributing to environmental issues. 

Environmental organizations such as Extinction Rebellion and the Environmental Audit Committee have investigated the impact of fast fashion and fur, and as a result, tights have come under scrutiny. 

Made from nylon emitting greenhouse gases, tights have become akin to single-use plastics in the textile industry. Their recycling process is challenging, and they often end up in landfills.

Tights Make a Statement

Fortunately, several hosiery manufacturers are now producing eco-friendly tights. Companies like Clayton offer socks made from a blend of yarns that incorporate eco-recycled nylon and microencapsulation technology. 

These yarns contain aloe vera, retinol, and vitamin E. Another brand, TLC runs a recycling program where customers can return their tights for melting, and the elastane content can be used in long-lasting plastic products such as car components. 

Environmental Concerns; Swedish Stockings is another brand that uses recycled polyamide, bio-cotton, and cashmere in their hosiery production, while also focusing on zero-waste facilities. 

Luxury hosiery label Wolford has launched a range of stockings made from recycled nylon waste and discarded fishing nets, with plans to expand their sustainable offerings. 

However, there remains skepticism about whether eco-friendly tights can be considered luxurious.

A Shift in Hosiery Manufacturing

Innerwear brand Heist also prioritizes durability in their tights. The brand has recently set sustainable goals for 2020, aiming to reduce energy consumption and greenhouse emissions. 

They plan to introduce their first line of tights made from recycled materials, utilizing sustainable technologies like Roica Eco Smart elastane and Fulgar Q-NOVA®, a sustainable Nylon 6.6 made in Italy from production waste.

The Downside of High Fashion

Despite the extra costs associated with these brands, consumers are compelled to consider sustainable options. Marks & Spencer addressed this issue by introducing ladder-resistant tights in 2007, offering extra durability and high-denier options, which have become the brand's bestsellers. 

However, the hosiery industry as a whole needs to undergo a revamp. While some brands have taken initial steps toward sustainability, substantial progress is still needed across the high street and among hesitant luxury brands.

US Market Diary

Technavio's latest market research report, titled "US Hosiery Market 2023-2027," predicts substantial growth in the US Hosiery market. 

Projected Market Expansion; The market is expected to increase by USD 2,992.99 million between 2022 and 2027, exhibiting a compound annual growth rate (CAGR) of 3.95%. The comprehensive report analyzes the market, encompassing key drivers, major trends, and challenges. 

Market Positioning

The report highlights the intense competition within the market, prompting vendors to implement growth strategies like promotional activities and increased advertising expenditure. 

Market positioning is emphasized, showcasing strategies employed by leading vendors such as Gildan Activewear SRL, Spanx LLC, Wells Hosiery, and Apparel USA. 

What drives market

Functionality Matters; Driving market growth are factors such as the high demand for designer and soft hosiery products, especially those made from organic and natural materials.

Additionally, the report identifies a significant trend of increasing demand for socks in the healthcare industry due to the rising prevalence of chronic diseases. 

Intense Competition Spurs Growth

However, changes in trade policies pose challenges to market growth, particularly with the influence of China as a major market contributor. 

Currently, over 80% of essential hosiery machinery and items are imported, creating a dependence on China and Taiwan. 

Holds limitless potential

The hosiery cotton industry in India holds significant potential and aligns well with the country's Make in India initiative. Over the past 30 years, hosiery production has grown in Delhi-NCR, Ludhiana, and Bangalore. 

However, there is still room for expansion in other cities like Jaipur, Indore, Pune, Kanpur, Varanasi, Nagpur, Surat, Bhubaneswar, Guwahati, Patna, and Ranchi. 

Promoting Domestic Manufacturing; To boost the industry, it is crucial to establish more hosiery mills and focus on self-reliance. 

By leveraging Prime Minister Modi's initiatives, India can become the world's largest hosiery producer and exporter, driving economic growth and employment opportunities.

Hosiery is in a sweet spot

The hosiery industry in India holds great growth potential, with expectations of a ten-fold expansion in the next 25 years. Emphasizing the long-term adoption of good cotton farming practices and striving for self-reliance, India can increase its global exports. 

Strengthening the Cotton Industry; Taking advantage of Prime Minister Modi's initiatives like 'Sabka Sath Sabka Vikas,' 'Make in India,' and 'Self-Reliant India,' Rikhab Chand Jain, Former President of the Federation of Hosiery Associations of India (FOHMA), highlighted the need for the industry to focus on becoming the world's largest hosiery producer and exporter.

Jain emphasized the importance of establishing more hosiery mills and expanding the industry beyond Delhi-NCR, Ludhiana, and Bangalore to cities like Jaipur, Indore, Pune, Kanpur, Varanasi, Nagpur, Surat, Bhubaneswar, Guwahati, Patna, and Ranchi.

 Latest Textile Events

22 June 2023, Mumbai

The concept of the immersive metaverse holds immense potential in the apparel sector, revolutionizing the way brands, designers, and consumers engage with fashion.

By leveraging augmented reality and virtual reality technologies, the immersive metaverse offers a transformative experience that merges the physical and digital realms.

What all you need to know

The role of events presenting what the future holds

The concept of the immersive metaverse, as depicted in the given text, represents a significant advancement in the realm of experiential events and trade shows. 

By leveraging augmented reality and 3D technology, Milano Unica aims to create a virtual space where individuals can interact and engage with the event as if they were physically present, transcending spatial limitations.

The Metaverse Boom: Engaging Users and Unveiling the Dark Side

As Investment Grows: Investments in the metaverse are soaring, leading to powerful and affordable hardware and software. Tech firms have high expectations for this market.

Consumer Brands Enter the Digital Realm: Consumer brands are seizing digital real estate to cater to the growing demand for experiences beyond the physical world.

Importance of User Engagement: Engaging people on the metaverse platform is crucial for all stakeholders involved.

Introducing Immersive Time (ImT): Immersive Time (ImT) is the dedicated use of headsets and accessories to escape reality and engage in the metaverse. Multitasking becomes limited in ImT.

Recognizing the Dark Side: Prolonged ImT usage is important but one must acknowledge its inherent drawbacks.

Implications for Researchers and Practitioners: Understanding ImT is vital for researchers, tech developers, brand managers, and policymakers ensuring customer safety in the metaverse.

This immersive metaverse introduces a new level of engagement and interactivity for attendees. 

It allows visitors to explore the virtual environment, guided by the Milano Unica avatar, which serves as a virtual representation of the event. The avatar not only assists in navigating the metaverse but also provides updates, tips, and information on the showcased novelties.

Experiential

The thematic communities within the metaverse, such as Night, Family, and Culture, serve as creative cues for the upcoming Fall/Winter 2024/2025 season. By integrating fabric and accessory collections that align with these themes, Milano Unica creates an engaging and captivating environment for visitors, further enhancing the immersive experience.

Innovation & imagination

By blurring the lines between reality and the metaverse, Milano Unica aims to amplify its distinctive values and deliver an enriched experience for attendees. This concept goes beyond traditional trade shows by providing a platform where individuals can interact, explore, and be inspired by the showcased products and themes in a virtual space. 

The immersive metaverse offers a unique opportunity for innovation and creativity, transforming the way people participate in events and fostering a sense of connectivity in a digitally enhanced world.

Enhancing engagement: Stickiness

Overall, the concept of the immersive metaverse, as exemplified by Milano Unica, showcases the potential of virtual environments to revolutionize the way we engage with events, trade shows, and creative experiences. 

It opens up new possibilities for connecting people from diverse locations, eliminating spatial constraints, and creating immersive journeys that transcend physical boundaries.

Bridging the Gap Between Online and In-Store

In this virtual space, brands can showcase their collections in a dynamic and interactive manner. 

Dynamic Showrooms and Virtual Try-Ons; Consumers can explore virtual showrooms, try on virtual garments, and experience a lifelike representation of how the apparel would look and fit in the real world. 

This immersive experience bridges the gap between online shopping and the tactile nature of in-store experiences, providing a unique and engaging way for consumers to interact with fashion.

Unlocking Creative Expression

For designers, the immersive metaverse presents a platform for experimentation and creativity. 

Virtual Fashion Shows and Innovative Designs; They can create virtual fashion shows, where the boundaries of reality are pushed, and new forms of expression are embraced. 

Designers can manipulate digital fabrics, experiment with innovative patterns, and present their collections in fantastical virtual settings, offering a glimpse into the future of fashion.

Building Global Communities

The immersive metaverse also opens up opportunities for collaborative experiences. Brands, designers, and consumers can connect and interact in real-time, transcending geographical limitations. 

This fosters a sense of community and inclusivity, enabling fashion enthusiasts from around the world to come together and share their passion for style and creativity.

Paving the Way for a Sustainable Future: Minimizing Waste and Environmental Impact

Furthermore, the immersive metaverse offers sustainability benefits. Reducing the need for physical prototypes and samples minimizes waste and the environmental impact of traditional fashion production. 

Virtual garments can be showcased, experimented with, and modified without physical resources, paving the way for a more sustainable and efficient fashion industry.

Real-Time Connections and Inclusive Experiences

The concept of the immersive metaverse in the apparel sector represents a paradigm shift in the way fashion is experienced, designed, and consumed. It combines technology, creativity, and community, offering a seamless blend of the physical and virtual worlds.

The Path Forward: A research agenda is proposed to enhance comprehension of consumer behavior and engagement in the metaverse. 

With its potential to enhance engagement, foster innovation, and promote sustainability, the immersive metaverse has the power to shape the apparel industry's future.

Latest Textile Events

19 June 2023, Mumbai

Textile machinery is necessary for the manufacturing of fabrics, thread, yarn, and finishing procedures in the textile industry. The market for textile machinery is currently seeing a transition from basic machines to more complex ones that improve the quality of the finished product. 

What all you need to know

Milestones and Implications

The textile machinery industry's technological advancement is what led to this. Germany is recognized as the world's leading producer of textile machinery, particularly for nonwoven and technological textiles. However, over the past 10 to 15 years, sales of nonwoven and textile fabric machinery have increased. 

The provision of machinery with the most recent technological advancements and the delighted customers, who are extremely satisfied with the performance and quality of the machines, are the driving forces behind this continual success.

Textile industry in other countries

German textile machinery has a reputation for producing high-quality equipment. Their textile machinery is of the finest quality, with exceptional technical performance in a variety of applications. The makers of textile machines are always looking to innovate in this area because it gives them so many chances. 

The market for German textile machinery is growing internationally. To draw potential customers, the German Textile Machinery Association has organized exhibitions throughout Asia and the Middle East. 

Pathbreaking

On these occasions, the manufacturers can discuss the most recent technological advancements and breakthroughs in textile machinery that have improved the quality of textile production. 

Additionally, it strives to improve its position in the global market. Asia is where the German textile machinery industry has discovered the largest market for its goods. 54.9% of the machinery imported from Germany is bound for Asia alone.

German preeminence

Furthermore, China is the sole consumer of German textile machinery in Asia. China receives 26.1% of the textile machinery that Germany exports, with India taking second place in terms of purchases. 

The majority of the countries that purchase German textile machinery are China, India, Turkey, the United States, Italy, Brazil, Saudi Arabia, Pakistan, Bangladesh, and the Czech Republic. 

VDMA Textile Machinery Association consists of about 110 businesses. These businesses specialize in selling textile machinery or specialized textile parts. With their cutting-edge machinery, some businesses are doing well. India has been one of the main markets for the German textile machinery trade for the past few years. 

Germany continues to lead the global market for advanced textile machinery, despite China's problems in this area and its fierce competition.

Italy's importance cannot be overstated

Italy is a further market leader for textile machines. Italy is the third-largest supplier of textile machinery and is renowned for producing the highest calibre machinery available anywhere in the world. 

They have extensive understanding and have completed numerous large-scale textile installations in numerous nations. 

However, Italy is currently suffering difficulties as a result of the heightened rivalry from second-tier rivals like China, Turkey, and India. Globalization has caused a gradual shift in textile manufacturing in Asian nations. 

As a result, not only was the location of the textile industry changed, but the textile machinery sector in Asian nations has also experienced significant growth. Italy is currently the second-largest producer of textile machinery in the world, and its rivals deem the technology employed to be of the greatest caliber.

Growing Dependence on China

China's Progress in Textile Equipment Localization; Additionally, the rise of the local and foreign markets has contributed to China's textile trade expanding quickly. After over 30 years of growth, China has started trading in textile machinery. 

China dominates the textile machinery market

China's exports of textile machines surpassed $10 billion in 2007 for the first time. Since that time, exports have risen steadily, and China's textile machinery market is booming. 

Despite being one of the nations producing textile machinery worldwide, China does not uphold international standards. It cannot be said that China's textile machinery sector aims to produce standardized machines in addition to manufacturing a great number and variety of textile machines. 

China is luring international investment with favorable tax laws and lucrative commercial opportunities.

Manufacturing advancements in the sector.

Achieving Self-Sufficiency

China has made remarkable progress in achieving self-sufficiency in textile equipment production, as stated by the China National Textile and Apparel Council. 

Currently, over 80% of China's textile equipment is manufactured domestically, highlighting the country's growing capability to produce high-quality machinery with locally sourced components. 

This achievement is complemented by the stable growth of China's textile and clothing exports, which reached a substantial volume of 323.3 billion U.S. dollars in 2022.

Localization and Quality

The Chinese government has actively invested in the textile and apparel industry, a vital contributor to the nation's economy. By prioritizing localization, China aligns its efforts with domestic innovation and production objectives. 

This strategic focus is expected to reduce China's reliance on imported machinery and components, bolstering the industry's resilience against global supply chain disruptions. 

Furthermore, the increased self-sufficiency in textile equipment production is anticipated to enhance the competitiveness of Chinese textile and clothing manufacturers in international markets.

Stable Growth and Global Leadership

To facilitate these advancements, the China National Textile and Apparel Council is dedicated to guiding and supporting industry companies. 

This involves integrating resources along the industrial chain, addressing technological challenges, and elevating the overall capabilities of the textile machinery sector. 

China's progress in localizing high-end textile equipment components and achieving self-sufficiency in production marks significant milestones for the country's textile and apparel industry.

Resilience and Competitiveness

Guiding the Industry: Due to this, manufacturers of advanced textile machinery, such as German textile machinery, have established their facilities in China to take advantage of the country's affordable labor and advantageous tax laws. The industrialized countries produce and export textile machinery. 

In turn, this boosts machinery exports and improves China's standing in the textile machinery sector. 

One might get the conclusion that China's textile machinery market is undoubtedly expanding, but only domestically. When it comes to complex machinery with high-quality output, it has to contend with fierce competition from industrialized nations. 

By boosting its investment in R&D, China's textile machinery sector can increase the reliability of its products. China is resolving a number of issues to produce high-end goods with industrial safety and product dependability.

A scenario in the second-hand machinery industry

The second-hand machinery sector is growing in popularity globally as a result of the ongoing recession. Due to high labour costs and rigorous environmental regulations, the textile, paper, and leather sectors are collapsing in the US and Europe. 

Enhancing Capabilities; As a result, there are now more used machines from these industries available. In Europe and the US, Pakistan, China, and India are considered to be key markets for used machinery. 

Many Indian textile companies are keen to buy used textile machinery from Europe that is available to be sold for a pitiful sum. 

Fascinating opportunity; Due to the closure of mills in the US and Europe as well as machinery that is no longer useful to them, Indian enterprises are primarily interested in purchasing shuttle-less looms. Spinning, weaving, and finishing equipment is easily accessible.

Latest Textile Events

26 June 2023, Mumbai

In April 2023, Zalando SE, the German online fashion and lifestyle platform operating in multiple European markets, including the UK, made an announcement about its upcoming launch of a personal shopping assistant powered by ChatGPT. 

What all you need to know

Introducing ChatGPT

This innovative assistant aims to help customers find the perfect products that align with their individual sense of style from Zalando's extensive range of brands and offerings. Initially, the beta version will be available to select customers in Germany, Ireland, the UK, and Austria, accessible through Zalando's app and web platforms. 

Generative AI, a subset of AI models, discovers trends and patterns within existing data, allowing for the generation of new information. ChatGPT is a powerful example of this transformative technology.

The personal shopping assistant will support both English and alternate languages subsequently.

Intuitive Shopping Experience

This new technology introduces a fresh approach to discovering Zalando's diverse assortment and provides customers with intuitive fashion inspiration. 

Fashion Discovery Redefined; For example, a Zalando shopper could inquire, "What should I wear to the office Christmas party in Berlin, where the entire board of directors will be present?" By leveraging ChatGPT's capabilities, the personal shopping assistant can understand the formality of the event, deduce the winter season in Berlin from the mention of Christmas, and generate a textual recommendation for suitable clothing and accessories. 

In the future, this functionality could be enhanced with customer preferences, including favored brands and available sizes, to deliver a more personalized selection of products.

The Power of Personalization

Zalando's adoption of ChatGPT as a personal shopping assistant follows in the footsteps of Adidas, which had previously introduced the AI-powered platform Findmine. Adidas successfully utilized Findmine to automatically generate complete outfit recommendations when customers browsed individual products. 

This implementation led to a significant reduction in the time spent by Adidas merchandisers on the online 'Complete the Look' recommendation feature and increased the number of items included in outfits for customers by an impressive 960%.

Revolutionizing Fashion Guidance

The fashion industry is undergoing a remarkable transformation, thanks to the revolutionary impact of ChatGPT.

Powered by advanced Large Language Models (LLMs) like ChatGPT-4, this technology is revolutionizing the way customers receive guidance and assistance. With its ability to create supercharged chatbots, hyper-personalized marketing copy, and innovative fashion discovery methods, ChatGPT is reshaping the landscape of fashion.

Unleashing the Power 

One groundbreaking application of ChatGPT is the development of the world's first AI stylist. This AI-powered stylist offers access to an extensive collection of curated fashion styles, meticulously tailored to specific occasions.

By leveraging the capabilities of generative AI and ChatGPT, fashion e-commerce is evolving in three key ways: personalized recommendations, enhanced product descriptions, and expert styling advice.

The Impact

Personalized recommendations are at the forefront of this revolution. ChatGPT's deep understanding of individual preferences, combined with its vast knowledge of fashion trends, enables it to deliver tailored recommendations that resonate with customers on a personal level.

This level of personalization enhances the shopping experience, helping customers discover items that perfectly align with their unique sense of style.

Groundbreaking Application

Moreover, ChatGPT enhances product descriptions, creating engaging and informative content that captures the essence of each fashion item. By leveraging its language generation capabilities, ChatGPT can generate compelling and detailed descriptions that go beyond basic specifications.

This enriched product information enables customers to make more informed purchasing decisions.

Empowering Fashion

Styling advice is another area where ChatGPT shines. With its vast knowledge of fashion styles and its ability to comprehend specific occasions or requirements, ChatGPT can serve as a virtual stylist, offering expert guidance and suggesting suitable outfits for various events or personal preferences. 

This personalized styling advice empowers customers to explore new fashion choices and experiment with their looks.

Enhancing the Shopping Journey

The versatility of ChatGPT positions it as an ideal candidate for a personal shopping assistant and more. The fashion industry can now view ChatGPT as a valuable partner. Tian Su, the Vice President of Personalization and Recommendation at Zalando, expressed excitement about experimenting with ChatGPT and helping customers discover fashion they will love. 

Zalando aims to gain a deeper understanding of its customers' needs and preferences and explore the potential benefits ChatGPT can bring to their shopping journey. Zalando's focus remains on continuously testing and introducing new solutions to provide the best possible experience for its customers.

How AI Revolutionizes Fashion

ChatGPT demonstrates an extraordinary level of personalization, utilizing data on current fashion trends, styles, and individual preferences. Through collaborative filtering, it presents comprehensive recommendations that are easy to comprehend and also consider the customer's budget if provided. 

The outcome is a highly rewarding and efficient personalized shopping experience.

A Valuable Partner

Beyond Zalando's personal shopping assistant, ChatGPT holds significant potential for various retail businesses. It can assist with successful product launches, analyze customer feedback, reviews, and social media conversations, conduct competitor analysis, drive social media engagement, facilitate upselling and cross-selling during customer interactions, forecast trends, and provide localization and language support for global brands.

The Versatility

The remarkable versatility of this software equips businesses with a refined and well-informed environment, enabling them to make informed decisions, remain competitive, and stay relevant in the ever-changing world of fashion.

The Future of Fashion

ChatGPT is spearheading a revolution in the fashion industry by delivering increasingly relevant and helpful guidance to customers. Through personalized recommendations, enhanced product descriptions, and expert styling advice, 

ChatGPT is transforming fashion e-commerce, enabling customers to make informed choices and discover new fashion possibilities. The future of fashion is being shaped by the powerful capabilities of ChatGPT and generative AI, leading to a more personalized and immersive shopping experience.

Latest Textile Events

21 June 2023, Mumbai

Cautious Consumer Behavior; Consumers are exercising caution when purchasing clothing and accessories due to the higher prices of daily goods, leading to a constraint on their discretionary spending. This cautious approach is affecting the demand for fashion products. 

What all you need to know

Lackluster Retail Sales and Early End-of-Season Sales

Retail sales have been lackluster in April and May, prompting companies to initiate early end-of-season sales to manage their inventory. The subdued sales performance is attributed to cautious consumer behavior and higher prices of goods. 

Slower Growth Rate for Fashion Retailers

Industry analysts anticipate a slower growth rate of 10% in revenues for fashion retailers in the current financial year. This growth rate is a significant decrease from the 51% increase reported in the previous year. 

Soft Demand Scenario and Weak Footfall

The demand for lifestyle products remains soft across various categories, price ranges, and geographical regions. Footfall in stores has been weak, although there has been a modest improvement in revenue trends in June.

Anchored Inflationary Expectations for FY24

Headwinds; Dampener Discretionary spending cut hurts Apparel Industry.

ICRA expects demand pressures on fashion retailers to persist in the first half of the fiscal year, with the hope of improvement during the festive season. However, revenue growth is expected to moderate in FY24 due to inflationary headwinds.

ICRA's analysis suggests a decline in revenue growth for listed retail entities and a decrease in operating profit margins. 

Impact of Higher Raw Material Costs and Discount Sales

Retailers have had to pass on high raw material costs to consumers, contributing to higher prices for the Spring-Summer 2023 collection. To stimulate demand and clear inventory, retailers have advanced discount sales by a week. Shifting Consumer Spending and Overall Footfall

Consumers may be shifting their spending from apparel to experience-led expenses like food and beverages, resulting in a decline of 7-8% in overall footfall across the country. 

Cautionary Consumer Behavior Impacts Fashion Retailers as Prices Rise

Weak retail sales have led to lackluster performance for fashion retailers, resulting in the early initiation of end-of-season sales. Analysts expect a slower revenue growth rate of 10% this year, down from the previous year's 51%. 

RAI prognosis

Demand for lifestyle products remains soft across various categories and regions, although there has been a modest improvement in June. In May, the Retailers Association of India reported a 7% sales growth, with moderate progress in jewelry and apparel, but the lowest growth in sportswear since the pandemic.

Festive season to perk up 

ICRA predicts ongoing demand pressure in the first half of the year, which is expected to improve during the festive season. However, inflationary challenges will limit revenue growth in FY24, with listed retail entities projected to experience a 10% decline in revenue and a 5.7% drop in profit margins.

Inflationary pressures

Since 2022, tepid demand has persisted due to high raw material costs being passed on to consumers. Prices for the Spring-Summer 2023 collection remain high due to previous increases in cotton prices, although cotton yarn prices are starting to soften. 

To stimulate demand and clear inventory, retailers are offering advanced discount sales. Footfall has decreased by 7-8%, potentially due to consumers prioritizing experiential expenses over apparel purchases.

Global view

The global apparel industry is bracing for a slowdown this year as macroeconomic tensions and dwindling consumer confidence eat into the profits of retailers, following a post-Covid surge in 2022. Key sectors like electronics, garments, furnishings, and automobiles are now scrutinizing the distinction between essential and non-essential products for daily living.

Apparel Industry Faces Slowdown as Consumer Confidence Wanes and Economic Tensions Rise

Consumers are less inclined to replace high-priced, long-lasting items such as electronics, luxury fashion apparel, and cars with newer versions in 2023. 

The apparel industry has also been impacted by rising cotton prices, leading to a decline in sales. While there was a strong sales performance in the second half of last year, the trend has become increasingly volatile in subsequent quarters.

US retail spending takes a hit

US consumers have significantly reduced their impulsive shopping for apparel and accessories, delaying the replacement and upgrading of electronics. PYMNTS, a reputable global leader in data analysis, highlighted in a recent report that US retail spending has decreased by approximately $8 billion in recent months. 

The research indicates that 67 percent of retail customers anticipate significant price increases next year, and the average global consumer does not expect inflation to normalize until the end of 2024. Data from the US Census Bureau also reveals a 1 percent decline in general spending on a seasonally adjusted basis, following a 0.2 percent decline from February to January 2023.

Prophecy

According to McKinsey's fashion forecast, fashion retailers are projected to experience slow sales growth of -2% to +3%, primarily due to a contraction in the European market (-1% to -4%). 

However, China and the United States are expected to have better performance, with growth rates of 2% to 7% and 1% to 6% respectively. Initially, during the pandemic, fashion took a backseat as consumers focused on more essential needs such as food and health, leading to a shift in demand.

Quick Comparison

Not only did the electronics and appliances segment experience a month-on-month decrease of 2.1 percent and a year-on-year decline of approximately 10.3 percent, but the home furniture and home furnishings segment also saw a decline of 1.2 percent and 2.4 percent, respectively. Spending on branded clothing, shoes, bags, and accessories also slipped by 1.7 percent month on month and 1.8 percent compared to the previous year.

Questionable claims

In addition to the slowdown, the Federal Trade Commission (FTC) has been cautioning advertisers to substantiate claims about their products, issuing notices to over 670 companies warning them of potential civil penalties if their ads contain unsubstantiated claims. As consumers tighten their budgets, many companies resort to making false claims and misleading advertisements to entice customers into buying their products.

Textile sales slow down in India

In India, the slowdown is not limited to apparel but has also affected fine dining restaurants and liquor segments, which had seen a surge in sales last year as consumers eagerly returned to wining and dining. 

However, the demand growth in feel-good categories like apparel, quick service restaurants, and lifestyle products has started to taper off, as the peak period has already passed. 

Although apparel players may appear to experience high growth in favorable seasons, overall demand trends remain relatively unchanged. Rising cotton prices have hit small-town consumers the hardest, as they are particularly price-sensitive.

Discretionary

According to a report by HDFC Securities, the peak demand in discretionary categories appears to be behind us. Growth was facilitated by higher ticket sizes, store expansion, and increased footfall, but many of these factors are now normalizing. 

In Q4, there are already signs of scaled-back expansion plans across various categories, and ticket sizes are also returning to normal levels. 

Discretionary spending may weaken in Q4, with apparel and lifestyle companies expecting sales growth of only 15-20 percent. Experts caution that pent-up demand cannot be sustained indefinitely as people revert to their normal consumption habits.

Uncertainty is the new certainty

The apparel industry faces challenges in the form of exposure to a downcycle and the sustainability of certain segments. 

Inflation poses the greatest threat, as deteriorating macroeconomics and job losses weighed heavily on the industry in the second half of 2022 and continue to create uncertainty in the fashion segment in the initial months.

Conclusion

The combination of cautious consumer behavior, lackluster sales, inflationary pressures, and shifting spending patterns poses challenges for fashion retailers. 

The industry expects a moderate growth rate for the current financial year and anticipates improved demand during the festive season. 

Retailers are adjusting their strategies by offering discounts and managing inventory to navigate these challenging market conditions.

Latest Textile Events

17 June 2023, Mumbai

The textile sector is on the brink of a remarkable turnaround following a challenging year characterized by various obstacles. 

The industry is poised for a revival in demand, especially during the third quarter of FY24, as global retailers take measures to reduce their excessive inventories and commence placing orders for the anticipated Summer/Spring 2024 collections. 

What all you need to know

Revival in demand expected

Experts in the field are optimistic about the sector's future, attributing this positive outlook to favorable market conditions, such as the geopolitical uncertainties faced by competitor countries. 

This factor is expected to infuse vitality into the textile industry, leading to sustained growth in earnings and improved cash flows for textile players.

Cautious optimism

The global textile industry is expected to experience a surge in demand, particularly in luxury apparel and footwear, with a projected 16% growth, according to McKinsey. 

From April to December 2021, the combined exports of textiles, apparel, and handicrafts reached $29.8 billion, compared to $21.2 billion in the same period the previous year. 

While the textile-clothing sector is benefiting from this rebound, it has been negatively impacted by reduced demand resulting from the global financial crisis and the Ukraine war. 

The International Textile Manufacturers Federation (ITMF) has identified "weakening demand" as the primary concern in the global textile value chain since July 2022.

Performance

With the completion of capital expenditure projects, textile companies will shift their focus toward reinforcing their balance sheets and optimizing return ratios. 

Furthermore, the decline in cotton and crude prices is anticipated to bolster profit margins and enhance India's competitiveness in international export markets. Remarkably, the textile sector has already made significant strides in capturing market share in key export markets, particularly in the realms of garments and home textiles.

Geopolitics

The potential for a UK free trade agreement and the implementation of the China+1 strategy serve as additional catalysts, augmenting the sector's prospects for realigning earnings and multiples. 

Sharekhan, a leading brokerage firm, has upgraded its outlook on the textile sector, now categorizing it as 'positive.' Notably, Sharekhan has identified Gokaldas Exports, KPR Mill, Himatsingka Seide, and SP Apparels as its preferred picks within the sector.

Tailwinds

The implications of this projected revival are significant, as the textile industry plays a pivotal role in the global economy, providing employment opportunities and driving economic growth. As demand rebounds and market conditions improve, the sector is poised to generate substantial revenue, contributing to overall economic recovery. 

The resurgence of the textile sector is a positive indicator for stakeholders, investors, and the broader business community.

Although the end-user demand graph may be nearing the peak of the same period last year, it remains to be seen if this growth in fabric demand can be sustained throughout the season. 

EAP view

The East Asia and Pacific (EAP) region is expected to experience better growth figures, projected at 4.3% in 2023, as pandemic-related restrictions are lifted and business activity in China gradually recovers.

Disruptions

The printing and dyeing textile industry has faced challenges due to the substantial increase in production costs, leading to price hikes to recover losses. The rush to complete old orders while receiving new orders after the Spring Festival has also created confusion in the supply chain for dyeing factories.

China Diary

A report by CCF Group, a premier consultancy in China, highlights some important facts about China's current growth in the apparel segment. Firstly, exports are expected to be difficult to improve in the first half of 2023, and the performance in the second half will depend on the destocking situation in overseas markets. 

Secondly, the sustainability of this demand hike remains unclear, and maintaining the upward trend may prove challenging. 

Additionally, the upcoming autumn/winter demand is expected to be slow due to unused inventory from the previous year, resulting in high intermediate inventory levels until the May-June season concludes.

Growth levers; China's domestic fabric demand for the spring-summer season arrived earlier than expected in February, but demand for seasonal fabrics remains unreliable and unsustainable. 

In the first half of the year, textile demand is mainly divided into three categories: export demand, seasonal fabric demand, and autumn and winter fabric stock preparation demand. 

However, compared to the current good demand, there is poor demand for autumn and winter stock preparation in the first half of 2023. The pandemic disrupted logistics in Guangzhou, leading to a missed opportunity for winter sales.

Currently, business is picking up in China's largest apparel wholesale markets, such as the Shisanhang Garment Wholesale Market in Guangzhou and the Sijiqing Costume Market in Hangzhou, after the pandemic disruptions. 

Challenges & opportunities; However, even during the Spring festival in February, there was a relatively low sales boost, as factories were closed and workers had returned home due to COVID-19 infections, resulting in fewer spring clothes available in the Guangzhou market.

Imbalance; The CCF report also highlights the disparity between the textile markets in East China and South China. The South China market shows stronger demand, driven by significant replenishment demand after the Spring festival and a rebound in seasonal demand for the first half of 2023. 

In contrast, the East China market lacks spring apparel, as brands typically prepare summer apparel directly in Guangzhou. Furthermore, the South China market benefits from low cotton yarn prices, even though the cotton industry chain experienced a decline the previous year.

China's Textile Industry: Rebounding Strongly in Guangdong

China's textile industry is experiencing a remarkable recovery after the pandemic, particularly in the Guangdong area.

This resurgence not only revitalizes domestic operations but also drives China's outbound investments in the textile and apparel sector. With investments surpassing $6.7 billion between 2015 and 2020, China aims to solidify its position as a key player in the global textile market. The rebound of China's textile industry carries significant implications for the global economy and trade dynamics.

Improved End-User Demand in China's Domestic Market

China's textile industry demonstrates signs of improvement in end-user demand, especially within the domestic market. 

Analysts eagerly await the first-quarter results of China's textile demand in 2023, expected to show improvement compared to the latter half of 2022. However, sustaining this growth throughout the season remains uncertain.

Export Challenges and Slow Autumn/Winter Demand

China's apparel segment faces challenges in enhancing exports during the first half of 2023, depending on the destocking situation in overseas markets. 

Boost in Domestic Demand and Market Disparities

China's major apparel wholesale markets, such as the Shisanhang Garment Wholesale Market and the Sijiqing Costume Market, experience a surge in business activities.

The South China market demonstrates stronger demand driven by post-Spring Festival replenishment and rebounding seasonal demand.

In contrast, the East China market lacks spring apparel but exhibits a well-performing cotton yarn market.

Uncertain Outlook for Seasonal Fabric Demand

While China's domestic fabric demand for the spring-summer season arrived early, the sustainability of seasonal fabric demand remains uncertain. 

However, the first half of 2023 lacks substantial autumn/winter stock preparation, contrasting with the current positive demand. 

China's Economic Rebound Driven by the Service Sector

China's economic rebound in 2023 relies on the service sector as the primary driver.

The recovery is expected to be less substantial than in 2021 due to a challenging global growth environment and a persistent property market downturn. 

Nevertheless, a mechanical increase in the year-over-year statistic and the rise of the service sector contribute to the projected 5.3 percent growth in China's GDP in 2023.

Impact of Rising Inflation on Global Supply Chain

China's reopening is unlikely to significantly alleviate constraints on the global supply chain. Sluggish global supply networks have been a major factor in rising inflation since 2021. 

While improved international shipping rates and delivery times indicate easing supply chain stresses, a general slowdown in demand and a shift towards less trade-intensive services have impacted exports from Asian economies. 

China's increased oil consumption, primarily driven by the services sector, is expected to raise global oil prices and contribute to higher global consumer price inflation.

Macro-Prudential Policies in Response to Inflationary Pressures

The increased inflationary pressures pose challenges for monetary policies globally, potentially leading to tighter monetary policy and slower economic development. 

Central banks have already raised interest rates to counter strong inflation, and price pressures are expected to remain high. This tight monetary policy may result in slower economic growth and longer or deeper recessions in some economies.

Post-COVID era

The post-Zero COVID lockdown phase brings unpredictable demand for the upcoming seasons, and it remains to be seen if China will regain its former glory in the global apparel export segment. 

The first quarter of 2023 is eagerly anticipated by analysts as they await the results of China's textile demand. 

There are some signs of improvement in textile end-user demand compared to the second half of 2022, particularly in the country's domestic market.

The textile sector worldwide is preparing for challenging times ahead, as the impending recession in the Western world, compounded by the pandemic and geopolitical tensions, disrupts supply chains, drives up raw material prices, and reduces demand.

SouthAsia view

Countries heavily reliant on textile exports, such as Bangladesh, India, and Pakistan, are particularly affected. Bangladesh, known for its readymade garments and textiles, is facing challenges due to a decrease in demand, affordability of raw materials, unfavorable trade policies, and internal security concerns. 

Bangladesh is considering diversifying into the growing global home textiles segment to mitigate the impact on its sinking sector.

India, with its skilled manpower and comparatively lower production, remains perpetually competitive in the textile world.

The textile sector is poised for a turnaround

Sum & substance; The textile sector's challenging year is giving way to a promising future. 

With a projected revival in demand, enhanced market conditions, and the potential for recalibrating earnings through strategic agreements and initiatives, the industry is set to experience sustained growth and improved financial performance. 

The upgraded outlook by Sharekhan reinforces this positive sentiment, highlighting specific textile companies as preferred investments. As the sector weaves its new story, it promises to be an essential driver of economic recovery and prosperity.

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23 June 2023, Mumbai

In May, India's textile and apparel industry encountered a significant setback as its exports witnessed a year-on-year decline of 12.2%. The industry continued to be plagued by low demand in crucial overseas markets, especially the United States.

What all you need to know

Show Low Demand

Textile exports contracted by 11.8%, while apparel exports experienced a decline of 12.7%. Other sectors also suffered, with jute products slumping by 29.3% and handicrafts and handmade carpets falling by 21.1%. 

May 2023 Figures Plummet

In May 2023, the total value of India's textile and apparel exports amounted to $2,816 million, compared to $3,206 million in May 2022.

The decline in exports was primarily attributed to sluggish demand in major importing countries such as the United States, Germany, and the United Kingdom, influenced by inflation and inventory accumulation. However, there are positive indications of improvement as exporters gradually secure new orders.

Turning point

The reopening of China after the COVID-19 pandemic also presents opportunities for business growth, particularly in the yarn and fabrics segment. Additionally, the moderation of domestic cotton prices offers hope for increased sales starting from July/August. Despite signs of recovery in the U.S. market, exports to the European Union have not met expectations.

Concerns Arise as Textile Imports Surpass Exports in India

Industry analysts are concerned as the country’s textile exports surpassed imports. Recently, there has been a growth in textile imports, driven not just by massive purchases of raw materials such as raw cotton, fabrics, and man-made textiles but surprisingly also of finished products. 

India, traditionally a major exporter saw its textile and garment imports grow almost t48.8 percent until November this fiscal from a year ago to $7.2 billion. At the same time, outbound shipments of such products dropped 13.4 percent to $23.1 billion. And officials say, these imports are likely to be over $10 billion in the current fiscal and that’s a record.

PLI, trade deals hope to decrease import dependence

As per a Financial Express report, apparel imports increased 53 percent to $1.2 billion in the first eight months of last year. 

This includes around 40 percent of garment imports from Bangladesh where many Indian companies have set up units over the past 15 years to take advantage of its duty-free access to large markets of the US and EU while another 20 percent has come from China.

However, experts feel once early investments made under the production-linked incentive (PLI) scheme for textiles bear fruit, the situation will change for the better this fiscal. 

Supportive trade pacts 

Moreover, recent trade deals with the UAE and Australia will further improve the situation and the government’s efforts to improve cotton production will also reduce imports of basic raw material cotton in 2023. 

Supply chain

The current shortage of cotton in the domestic market has not only hiked up the fiber import percentage but harmed the production capacity of several units in the value chain. 

The increase in cotton prices also drove up the import value of both inputs and finished products along with Indian companies getting more garment supplies to India from their manufacturing units in Bangladesh.

Man-made fibers and other causes for export slump

With global consumption patterns currently focussed more on man-made fibers and technical textiles products, many factors such as the dominance of smaller businesses with limited scale manufacturing capacity and inflexible labor rules have affected this segment. 

Along with this, high logistics costs as well as stiffer competition from Bangladesh and Vietnam in the last decade have been detrimental to this segment.

Datapoint

As per a CCF Group study, in India where the main exports are textiles followed by apparel, there has been a slump for five consecutive months leading up to December 2022. 

Textile products such as cotton and yarn products which account for nearly one-third of the total were down 3.6 percentage points compared with the proportion of the same period last year which was down 12.2 percent over the same period last year.

From the volume of Indian cotton in the current markets, the 2022-23 Indian cotton yield is lower than expected in the previous period, which is a support for Indian cotton prices.

Although downstream demand is relatively weak, it will be further affected by the present high cotton prices and the year ahead doesn’t look too optimistic. 

Cotton trade dynamics

With cotton prices remaining high, there is not much significant improvement among its domestic midstream and upstream spinning and weaving mills where the operating rate remains at a low level and also lowers the actual international competitiveness of Indian textiles.

As per the CCF Group study, India’s low textile and apparel exports in 2022 were mainly due to a fall in exports in the second half of the year. What’s more, December stats do not show much improvement either. And the situation may not improve too much in the first quarter of 2023.

Opportunities for Growth

Urgent Need for Free Trade Agreement; Competing countries that enjoy duty-free access have an 11% cost advantage. Therefore, the industry strongly feels the need to expedite the free trade agreement with the United Kingdom.

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20 June 2023, Mumbai

India has long been the leader in the textile and garment sector, but the sector temporarily suffered from the worldwide pandemic between 2020 and the beginning of 2021.

India made sure to seize the positive and healthy demand in both the domestic and international markets with only a little push in the midst of the world economy's recovery. 

What all you need to know

Datapoints

The same is evident in the most recent statistics made public by prestigious textile and garment businesses as well as through official channels. Studies have been reporting on the performance of the Indian textile and apparel industry for the past several months, and the growth narrative will continue through the conclusion of FY '24. 

According to Ministry of Commerce and Industry data, India's textile and garment sector experienced the highest-ever rise in exports, rising by 40.55 percent to US$43.44 billion in FY'22 from US$30.90 billion in FY'21. In terms of overall numbers, ready-made clothing exports in FY 22 totaled US $ 16 billion, up 30.40% from FY 21.

Steady Growth: Indian Textile and Apparel Industry on a Promising Path

The Indian textile and apparel industry is set to experience robust and consistent growth, with a projected compound annual growth rate (CAGR) of 10% from 2019-23.

This upward trajectory aims to propel the industry to a remarkable market value of US$190 billion by 2025-26. Such impressive figures indicate a positive outlook for the sector.

Rising Market Potential: Energy Consumption and Environmental Impact

Notably, the Indian textile and apparel industry holds significant importance in terms of energy consumption, accounting for around 9-10% of India's total industrial energy usage.

Moreover, it contributes approximately 3% to global greenhouse gas emissions, emphasizing the need for sustainable practices within the sector.

Income Surge Driving Apparel Industry Growth

The driving force behind the thriving apparel industry in India is the escalating income of the population. With per capita income expected to grow at a CAGR of 7-9% over the next decade, more consumers have the means to invest in clothing and textiles, further fueling industry expansion.

Domestic Market Dominance: Expanding Opportunities

The domestic textile and apparel market in India, valued at over $100 billion as of 2018-19, is poised for remarkable growth.

Projections indicate a CAGR of 12%, propelling the market size to reach a substantial $223 billion by 2021. Currently, the domestic market holds sway, accounting for approximately 74% of India's total textile and apparel market, signaling ample opportunities for growth and investment.

Cautious optimism; the Indian textile and apparel industry's steady growth, driven by rising incomes and domestic market dominance, paints a promising picture for the sector's future.

As the industry strives to address energy consumption and environmental concerns, it has the potential to create numerous opportunities for stakeholders and contribute significantly to India's economic landscape.

India's Retail Revolution: Transition to Organized Retailing

India's retail industry undergoes a transformative shift from traditional to organized retailing, aligning with global trends. Despite initial hurdles, India is poised to claim the industry's second position.

Consumer Behavior: Unlocking Opportunities in a Booming Market

Understanding consumer behavior becomes paramount to leveraging the immense potential of the rapidly expanding apparel market. Adapting strategies accordingly holds the key to success.

Uptick

In reality, the fourth quarter of 22 proved to be a catalyst for the expansion of Indian garment factories, as they recorded US $ 4.81 billion in export revenues or an 18.11% Y-o-Y increase. If the clothing and textile sectors are combined, the rise is considerably greater due to the buoyant domestic demand for textile raw materials. 

Leading from the front, Indian public limited companies across the supply chain, including Arvind Ltd., Siyaram Silk Mill, KPR Mill, Gokaldas Exports, and Welspun, as well as other public limited entities like PDS Ltd., Raymond, and Maral Overseas, demonstrated positive results in the recently ended Q4 of FY '22, as well as for the entire financial year (see Tables 1, 2, and 3). Additionally, some of the organisations experienced exceptional growth on both the top and bottom lines. 

Export perspective in the industry

From an export perspective, the major garment retail markets in the world, including the USA, Europe, Australia, Japan, and South Korea, among others, have shown Y-o-Y growth in 2021 over 2020, which has benefited Indian factories with an export focus. 

Consumer interest in omnichannel commerce has been strong for the stores that have chosen it. apparel and apparel accessory store sales allegedly increased by 33.1% during the course of the holiday season, above projections for growth of 14.1% to US $ 886.7 billion. 

The most recent quarters have seen pretty strong results from a variety of international brands and shops. The National Retail Federation (NRF) recently stated that consumers used to inflation continued to spend in April '22, supporting the claim that the USA continues to experience strong demand.

Thus, despite higher costs, clothing retail sales in the US increased on a monthly basis compared to March 22.

The ascent 

A select few of the businesses were also active in diversifying their portfolio, which aided in their successful growth. Companies like PDS Ltd., which purchased a share in UK-based Filkor Limited, saw their most recent quarter and fiscal year break records as they not only beat expectations but also established a new standard for growth going forward. 

When discussing the efforts behind this achievement, the company's vice chairman, Pallak Seth, says, "This year we have witnessed long-term association with leading brands and retailers, offering them 'Sourcing as a Service' for exclusive territories, including Hanes Brands in Bangladesh and S.Oliver in India. 

Additionally, we are observing how sourcing opportunities are developing as more retailers and brands looking to connect with companies that have an integrated supply chain, such as PDS. 

Although the company's primary business is sourcing, its manufacturing operations just had a significant turnaround, and moving forward, this division is anticipated to contribute to the bottom line.

The manufacturing sector had a 92% increase in top-line revenue from Rs. 285 crore in the previous fiscal year to Rs. 547 crore this year.

Demand tailwind

In a similar vein, Australian retail sales on February 22 again exceeded expectations. Comparing the first two months of the year, the clothes and department store sectors both saw increases of over 11%.

The Australian Bureau of Statistics (ABS) notes that in March 2022, the total Australian retail turnover increased by 1.6%, setting a new record. 

Companies that are vertically integrated and have access to both the home and international markets also benefit from strong demand. The same is confirmed by Arvind Ltd., which also notes that fabric and apparel volumes were high in both local and international markets. The volume of fabric remained stable.

Growth Trajectory: Expanding Global Apparel Market

The global apparel market sets sights on surpassing $2.6 trillion, with a 5% CAGR for worldwide garment demand. India and China lead the charge, outpacing the global average with projected growth rates of 12% and 10% respectively.

Driving Forces: Factors Shaping Indian Organized Retail

Rising working women population, increasing disposable incomes, accessible credit, price differentiation, quality parity, and strategic use of media drive India's dynamic organized retail landscape.

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16 June 2023, Mumbai

Given its wealth of natural and human resources, Sub-Saharan Africa has tremendous potential to be competitive in the manufacturing of cotton textiles and apparel. 

Despite the industrial possibilities, the area is still having trouble competing on a worldwide scale. 

What all you need to know

The continent called Africa

The possibilities and difficulties faced by Sub-Saharan African nations are discussed in this article. A diversified region, Sub-Saharan Africa has a wealth of natural and human resources, and it has a great deal of potential to produce cotton competitively and achieve equitable prosperity. 

In terms of generating cash and jobs, its textile and garment sector is crucial. 

Conspicuous

Sub-Saharan African nations have caught the attention of textile corporations from around the world recently and have emerged as a promising locations for sourcing textiles and apparel. 

Foreign investments, investor trust in the continent's manufacturing and design capabilities, and the expanding cotton industry are the main drivers of this sector's spectacular growth. 

When compared to exports of $4.11 billion in 2020, the value of textiles and clothing from Sub-Saharan African nations climbed by 25% to $5.14 billion in 2021.

The devil lies in details

Statistics show that the import-to-export ratio for Sub-Saharan African nations is significantly greater. This suggests that, in contrast to other developing nations at a comparable stage of economic development, the region is unable to meet its internal demands. 

A financial imbalance and a lack of economic activity in the area are indicated by the larger import-to-export ratio. Due to the low prices of imports from Asian nations like China, India, and Pakistan, the textile and clothing sectors in the Sub-Saharan African countries are experiencing escalating rivalry in the local market.

With a population of 1.14 billion and a growth rate of 2.7% annually, Sub-Saharan Africa is home to 77% of the world's under-35 population. 

Positive demography

In the next 20 years, Sub-Saharan Africa will experience the greatest rate of growth in the working-age population worldwide. More than 900 million individuals in the region will be of working age by 2035, matching China's population size. 

The textile and clothing industries are among those paying attention to this enormous worker pool.

The cotton business in Africa

One of the most significant cash crops in Sub-Saharan Africa, cotton plays a significant role in generating foreign exchange, reducing poverty, and creating jobs. 

The fifth-largest producer of cotton in the world, Sub-Saharan Africa accounts for 7.12% of worldwide production, with about 75% of the region's output coming from West Africa. 

The output of cotton in Sub-Saharan Africa has increased significantly, and it will produce more than 1.84 million tonnes of cotton in 2021. 

Over 450,000 people are employed in the Sub-Saharan African region's cotton industry, which currently accounts for 15.93% of global exports. 

Cotton continues to be the most popular natural fiber used in the garment industry, where demand for natural fibers is anticipated to increase. 

Datapoint

According to the United States Department of Agriculture (USDA), by 2025, Sub-Saharan Africa's exports of cotton lint are expected to increase by 14%. 

A growing portion of these raw material exports go to China and Southeast Asia before being transformed into finished items and marketed to customers in the US and the EU. 

Sub-Saharan Africa is anticipated to be the third-largest exporter of raw cotton in 2029, according to the OECD agricultural outlook.

Enhancing Economic Ties: Kenya and the US Collaborate in the Clothing Industry

Kenya and the United States have forged a strong economic partnership with a series of new co-investments in the clothing industry, totaling $55 million. 

These strategic agreements, supported by Prosper Africa and the US Agency for International Development (USAID), highlight the unwavering commitment of the US to strengthening economic ties with Kenya.

Collaborative approach

The collaboration between American and Kenyan clothing firms will yield significant benefits, including increased employment opportunities in both countries and streamlined business operations. 

The US government, through the Prosper Africa program, is actively connecting US and African companies to new customers, suppliers, and investment prospects, fostering growth and prosperity.

Enduring impact

One of the key agreements involves MAS Intimates, a clothing company dedicated to enhancing the production of high-quality garments in Kenya. Through this partnership, Kenyan workers will receive education and training, leading to the creation of jobs in the formal sector. 

United Garment Liquidators (UAL), a discount clothing company, plans to bolster garment exports to the US market by establishing a comprehensive facility in Kenya that integrates every phase of the production process, from "Farm to Fashion." 

Mega Sports Apparel aims to expand its production capacity by incorporating new production lines.

Unfolding developments

Furthermore, Kenya's Coast Apparel will enhance its production and export capabilities through the acquisition of machinery, ultimately generating more employment opportunities, particularly for women and young people. 

Best Lifestyle, situated in Athi River, plans to scale up production in Kenya and hire and train additional workers. 

Nexgen Packaging, a US-based packaging company, will construct a facility in Kenya to manufacture tags and labels for clothing and footwear, catering to both domestic and international markets.

To further promote investment, a trade mission to the United States, including a roadshow in New York, has been organized, aiming to attract additional US investments in Kenya. 

This mission signifies the determination of both countries to foster economic growth, strengthen bilateral relations, and unlock new opportunities in the clothing industry.

Snapshot

There are a total of six cotton basins on the African continent, with the West African basin being the most significant. 

The top cotton-producing nations, Burkina Faso, Benin, Mali, and Cote d'Ivoire, have seen their volumes increase over time due to an increase in harvested area, mostly as a result of rising government subsidies. 

The USDA estimates that 4,843 thousand hectares (ha) will be used to cultivate cotton across Sub-Saharan Africa in MY 2022–23. 

The greatest area, 740 thousand hectares, is anticipated to be planted in Mali, an increase of 2.78 percent from 2021–2022; however, Benin and Burkina Faso are anticipated to plant over 650 thousand ha each in MY 2022–2023, an increase of 1.56% and 9.24%, respectively, from the previous year.

In reference to the context

The African Development Bank Group (AfDB) has calculated that along the cotton value chain, which includes cotton production, spinning and twisting into yarn, weaving and knitting into the fabric, followed by dyeing, printing, and design, up to 600% of value can be created. 

Sub-Saharan Africa's textile sector includes a variety of micro, small, and medium-sized enterprises (MSMEs), which can quickly create jobs and support women's empowerment. 

The AGOA (African Growth and Opportunity Act) Since 2000, the US has had an AGOA trade strategy with Sub-Saharan Africa. It is a non-reciprocal US trade preference policy that gives the majority of exports from qualifying African nations duty-free access to the US market. 

AGOA encourages US exports and draws capital to Africa, which aids in accelerating economic growth. The AGOA's authorization was renewed through September 2025 by the Trade Preferences Extension Act of 2015. At the moment, 24 of the 36 Sub-Saharan African nations that qualify for benefits under AGOA do so for textile and clothing.

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