It has been a very challenging year for the industry but overall the picture has been positive for the apparel segment while the textile segment has not been so upbeat… A report by credit rating agency ICRA in August 2015, based on movement in exports, had predicted that India’s apparel exports for 2015 are likely to increase to US $ 18 billion and to US $ 20 billion in 2016 as against US $ 16.5 billion in 2014. Talking to various buyers working in different markets and with different products on sourcing trends in 2015 and their expectations in 2016, many interesting insights were unveiled…, some of them are presented.
Delta Sourcing
Growth in sourcing from India in 2015
Itochu India Pvt. Ltd.: Around 20% increase in enquiries. Actual materialisation is much less. Reason is meeting quality standards and delivery schedules.
Francis Wacziarg Pvt. Ltd.: The growth was very marginal, though we would have done much better. The major reason for not very impressive growth is the slow recovery of economy in Europe, being our biggest trading partner.
Sears Sourcing India Pvt. Ltd.: We saw more than 70% growth from this region this year.
Taurustex: What I have experienced is very slow demand in overall textiles. Yarn demand was stagnant till August and picked up only 2-3 months ago due to some garment orders in domestic market. Slow demand is due to overall sluggish global demand.
Falabella: India office grew at a pace of 30% in the year 2015; this has been our growth path since the inception of the office in 2011.
Delta Sourcing: The business was stable for India, with marginal growth and we too saw the same trend.
Biggest challenges faced in 2015
Itochu India Pvt. Ltd.: To match quality standards prescribed and ensure timely deliveries.
Francis Wacziarg Pvt. Ltd.: Over the years, the challenges more or less remained the same as the requirements and demands of the buyers are increasing, especially with respect to finishes, pricing, value additions, etc. Another area where we faced some difficulties is in meeting the increasing demand on REACh compliance.
Sears Sourcing India Pvt. Ltd.: Were more internal.
Taurustex: The year 2015 was our fourth year as a start-up and we discovered that the road ahead was more challenging in terms of maintaining customer and supplier base. Poor demand in textiles was our biggest challenge to look for new areas of revenue generation, where we diversified into corporate uniformwear and sweaters division, sportswear and performance garments like tracksuits, swimwear, etc. In addition to our core yarn, fabric and fashion apparel sourcing business.
Falabella: The biggest challenge was the slow economic growth and political instability in South America which reduced the buying power of our customer base. Nonetheless we have been able to grow year after year due to our strong product and sourcing base, out of both India and Bangladesh.
Delta Sourcing: Getting the right product with a WOW factor to excite the buyers.
Hottest products shipped last year
Itochu India Pvt. Ltd.: Scarves, fabrics for womenswear and home textiles.
Francis Wacziarg Pvt. Ltd.: CPD tee, shrug & Bolero with Lace, and sublimation printed tops.
Taurustex: Sublimation tracksuits/lycra leggings and cotton yarns.
Falabella: Indian product saw a boom in South America. Falabella: organized a special ‘India’ event in all our flagship and key stores across Latin America which showcased Indian handcrafted product. We saw a substantial amount of growth in our turnover in 2015 as the Indian handwriting made a strong comeback not just in Falabella: but in all the other fashion retailers based out of South America as well.
Delta Sourcing: Scarves, yarn dyed blouses.
Mood for 2016
Itochu India Pvt. Ltd.: Very optimistic and from previous experience, I think that we will succeed to overcome challenges.
Francis Wacziarg Pvt. Ltd.: Upbeat and positive.
Sears Sourcing India Pvt. Ltd.: Upbeat!
Taurustex: Continuing with the core commodities products like yarn exports and domestic sales, adding value-added products and strengthening the sportswear and performancewear sector in garments.
Falabella: The mood is upbeat yet a lot of work needs to be done in terms of timelines, product and price. India loses advantage over China due to a longer sailing period. Indian exporters need to come out of the frame of mind of working only on 90 days and similar timelines. We need to get more competitive in terms of pricing as well.
Delta Sourcing: Optimistic but cautious.
Positives & challenges foreseen
Itochu India Pvt. Ltd.: Positives are the experience we gained and challenges foreseen are of labour shortages and skilled labours availability at manufacturer’s level.
Francis Wacziarg Pvt. Ltd.: Today Indian economy is in a better position to absorb the external currency turbulences. Currency is almost stable and is not expected to move in wide range in the near future. Steps taken by the Government like increased drawback rate, interest subvention & interest rates based on the marginal cost of funds coupled with enough cotton stock and low oil price, all are contributing to positive mood in the industry. Attracting the buyers to buy from us and maintaining the rate of growth, is as usual, the challenge, as more and more avenues are opening for the buyers to source.
Sears Sourcing India Pvt. Ltd.: Dollar being strong is a positive sign; we will be watching Government regulations on cotton export which impacts prices.
Taurustex: We see all positives in textiles where companies would now be upgrading themselves to compete in terms of higher skills and work harder to maintain current businesses. Complacency would reduce and concept of ‘selling by what is being produced will sell’, will gradually diminish from market place. This will enhance quality of product and services to end consumerism. We see challenges to find and retain talent.
Falabella: Well China is getting expensive and we do have some anti-dumping laws which will help us in gaining some business volumes. The challenge is of course to offer better product than Bangladesh and China and offer competitive prices as well. I do see all basics moving out of India eventually unless we gear up to offer competitive prices. Bangladesh can now produce fashion basics and can do smaller quantities as well; this is a huge challenge as the Indian exporter still requires a MOQ in spite of having higher prices than other manufacturing regions.
Delta Sourcing: We are hopeful that global markets will stabilise. Challenges are many, but price competitiveness and better efficiencies in delivery are the biggest.
New goals in 2016
Itochu India Pvt. Ltd.: We are mainly focusing on exports to prime retailers as well as Indian domestic brands.
Francis Wacziarg Pvt. Ltd.: The new goal we set for ourself is to increase the average FOB value. Consequently, product diversification and value additions are the challenges in front of us.
Taurustex: To maintain existing customers and continue to grow new partners for better value to the customers.
Falabella: We do hope to increase our sourcing from Bangladesh; this extra business however will be moving out of China so our Indian sourcing base at the moment is secure.
Delta Sourcing: Exploring new business opportunities.
Message to the industry in the New Year
Itochu India Pvt. Ltd.: It’s necessary to keep ‘Quality at Highest Consideration’, followed up with ‘Meetings Committed and Delivery Schedules’
Francis Wacziarg Pvt. Ltd.: My suggestion to the industry is very basic: ‘Invest in training and skill development’. If we want to use our full potential, we need the skilled labour force. Though the Government has started many programmes for the skill development, it is the duty of the industry to utilize this opportunity and make use of this facility fully for their own and for the country’s interest.
Taurustex: Respect and reward hard working, truthful and honest professionals/ people and develop this culture to promote such individuals for a healthier working environment.
Delta Sourcing: The industry needs to work on pricing through better productivity to give buyers a better chance in the global market.
