A pandemic might have brought many day-to-day schedules and even the biggest of global industries to an abrupt, possibly slightly receding halt, but ushering many individuals inside the protection of the four walls of their houses has resulted in a surge of consumption of activewear and performancewear offerings. People are ready to sweat it out either to get back to shape after gaining the stay-at-home calories or simply, and more commonly, just to kill time.
Complementing this is the US $ 4.2 trillion global wellness industry which is now rapidly transforming to go digital suiting to the current times, making this lifestyle shift a lot more than a simple fad. The surge has, thus, led to a slightly less turbulent graph of this market category as compared to other counterpart categories in the fashion and accessories industry.
As per studies done in January 2020 by Allied Market Research, the global activewear industry was expected to reach nearly US $ 547 billion by 2024 in the pre-pandemic era, clearly oversaturated with fast fashion brands and traditional sportswear retailers competing for the last shred of profit. China, Vietnam, and Bangladesh have been at the fore when it comes to sourcing hubs for this category. However, COVID-19 brought with itself several cancellations, greatly affecting all major and minor manufacturers in the segment.
One New York-based importer that is now shifting the sourcing trend to benefit these Southeast Asian countries and help them stay afloat and alive in the times of corona is Studio Ray, and at the helm of sourcing for one of its brands ZeroXposur is an Indian buying and sourcing executive. Hailing from Faridabad in Delhi-NCR, Neha Jain started her career trajectory with graduation from Wigan & Leigh College (India) in Fashion/Apparel Design, later interning with the Banana Republic in New Delhi. She then worked as an Assistant Merchandiser with India’s no.1 exporter, Shahi Export House. Later, she joined one of the giants of consumer goods sourcing, Li & Fung, India. It was here, amidst the interaction with both buyers and vendors that she realised her penchant for buying operations, making her take the next step of furthering her educational expertise with a degree in Fashion Merchandising Management from the Fashion Institute of Technology in New York City. She is thrilled to start her Executive MBA journey from the Kellogg School of Management, Northwestern University, in few months.
Neha has worked with different retail channels throughout her journey, starting from high-end luxury retailers, private label specialty retailers, discount and off-price retailers, big-box retailers to e-commerce retailers. Few retailers include Theory, Bloomingdales, Walmart, Target, Sam’s Club, TJMAX, Nordstrom, H&M, Abercrombie & Fitch, Kohl’s, Burlington, Amazon.com, Backcountry.com, etc.
Today, Neha is the Sr. Sourcing & Production Manager for ZeroXposur at New York-based Studio Ray LLC, founded in 1998, a B2B importer, that markets performance apparel, activewear, swimwear, outerwear, and accessories to big box and off-price retailers in the USA.
In a candid conversation with Apparel Resources, Neha discusses her strategic sourcing plans and how she has moulded the sourcing practices and trends in the US apparel industry, along with discoveries of offbeat sourcing hubs and the change in Indian manufacturers’ practices, who are witnessing the current certainties and unprecedented times in the global world.
Tell us about the sourcing practices you employ currently and the major developments you have seen in these buying practices.
Neha: Well, there are many factors to be considered when employing a sourcing practice, and it differs from business to business. I’ve been working with budget customers for quite a long time now where even a penny matters. My mantra is to challenge myself every day by bringing a perfect balance between constantly sourcing from a diverse base and consolidating the sourcing base at the same time – a balance between the risk, cost, and flexibility as I call it.
As the crisis and tensions rise globally, and the need for speed and efficient supply chain continues to weigh on the apparel business, I feel a need to develop a contingency plan. In addition to crafting a highly flexible and demand-driven sourcing strategy, I believe it is extremely important to bring process efficiency in the development and sourcing process, as the margins are under pressure, and the search for cheaper sources is running out of the stream.
On the other hand, the increased trade tension between the USA and other larger economies disrupts the traditional norms of sourcing. It is not just about moving from one low-cost manufacturing country to the other, but it has a lot more to do with the digitisation of the sourcing process, consolidation of the supply base, and bringing end-to-end process efficiencies. My goal every day is to employ a practice in working where I can continuously improve the speed, flexibility, and bring cost and process efficiency in my supply chain to create value for the end consumer, my customer, and the suppliers. This remains one of the biggest challenges in my current position to build a greater collaboration globally and to have a win-win strategy for each party involved in the supply chain.
What are your views about the Trade Wars happening right now, and how do you think this will turn out for other manufacturing hubs?
Neha: Talking about the US-China trade war, I look at it as a new barrier and as a new opportunity at the same time. The barrier is trade disruptions, could be in any form – a trade war, a virus, or any other unforeseen circumstance, where we are not certain how the global value chain and economies will shape up, especially after COVID-19. The opportunity is to explore many other sourcing countries which are working on building infrastructure, investing in training, and conducting R&D that will provide customers with increased speed and flexibility.
For instance, based on my extensive research during COVID-19 into the Indian sub-continent and African sub-continent, I discovered that many suppliers are now producing synthetic and performance fabrics vertically, so we can have a seamless operation from development to production at one stop, thus reducing lead times and improved costs. The majority of them are Chinese and Indian-owned groups who master in conducting such R&D on bringing a smooth supply chain experience for their customers. The management and the key point of contact remain highly skilled personnel, while they are gradually training the workers to produce not only basics or key items but more technically advanced and high-scale fashion clothing.
In my opinion, every apparel manufacturing country should consider this as an opportunity and think of transformation towards a demand-driven supply chain model. This includes innovation (product-based and process-based), high flexibility, shorter lead times, improved costs, and most importantly, bringing 100 per cent transparency in the entire supply chain process.
Let’s talk about major manufacturing hubs you source from, and the distribution of business across these hubs.
Neha: I’m lucky that I got an opportunity and exposure to travel and explore different manufacturing setups in different countries very early in my career. We all know that China is one of the most efficient countries for garment sourcing and manufacturing. They can pretty much do anything and have capacities. However, to be able to get competitive prices from China remains a major concern. I would say that Bangladesh leads everyone else currently.
Over a period of 8 years, I have seen a tremendous increase in efficiency from Bangladesh. They are capable of manufacturing technically advanced clothing, handling difficult fabrics, meeting price points as the wages remain quite low, meeting tight timelines (especially if it’s a vertical fabric production), and meeting the compliance requirements. I have also seen tremendous improvement in Vietnam, especially in the last 1 year, to try and come as low in their pricing, as they have skilled labour and capacities.
India, on the other hand, has made some huge technological advancement which I strongly believe is the next required step in the global sourcing value chain. Many Indian factories are using 3D forms to do fittings which not only increase efficiency, but also reduce lead times. However, India remains an expensive source for many USA retailers who are dominantly selling performance apparel.
It is interesting to see that Ethiopia and Tanzania are coming up as other competitive sources for sportswear and swimwear. As I said before, a lot of Chinese and Indian-owned companies are investing in these countries to create an infrastructure that’s well suited for American markets including compliance requirements.
Currently, I’m sourcing a major chunk of raw materials out of China and garment manufacturing out of Bangladesh. This includes sportswear, swimwear, and transitional outerwear categories. We still source the majority of the outerwear category from China, as China leads the technical expertise in that arena. Other sourcing countries in my current role include China and India. I’m keen on exploring opportunities in Vietnam and African countries such as Kenya and Madagascar – benefiting on price and the product value across the supply chain.
What have been major changes post-pandemic when it comes to KPIs for vendor management and selection? Did COVID-19 cause any changes in your sourcing practices?
Neha: I believe in building strategic business partnerships with my suppliers, where the supplier understands the customer and more importantly the changes in the economies worldwide. Unfortunately, the pandemic has affected the world severely, and as a result, we expect to see a drastic change in consumers’ shopping behaviour. The ultimate consumer will now shop carefully and selectively, as more than 30 million people have lost their jobs in the United States.
The prices are bound to go down for different assortments. The vendor will need to make their pricing competitive, as the fashion cycle will now be all about fast fashion, but only based on demand, with more horizontal category diversity and fewer quantities. People will buy less, buy cheap, and would still want newness in the product. If my supplier and I think alike, and collaborate keeping these requirements in mind, we can grow together. Few other things that I will look for when it comes to vendor selection are adaptation to change, flexibility, collaboration, use of technology, and 100 per cent transparent communication.