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Top 5 Challenges for Lankan fashion SMEs to keep it ‘Made in Sri Lanka’

Sri Lanka is probably one of the most interesting places in South Asia for fashion brands to work in. As the home to a massive apparel manufacturing industry, over the years Sri Lanka has evolved to become a maker that can genuinely boast turnkey solutions with an impressive commitment to socially and environmentally sustainable practices. While this does seem like an ideal setup that would encourage more local SMEs to offer wearables that have been expertly manufactured within homeshores, with competitive prices, this is not the case.

A vast majority of Sri Lankan small and medium fashion brands appear to stay within limited production circles and niche segments, without drawing the full spectrum of the apparent benefits of having a world-class manufacturing industry at home. Why? What are the challenges for them in keeping it ‘made in Sri Lanka’? Why is Sri Lanka yet to become a hotbed for homegrown labels? We found out from some of Sri Lanka’s most-popular small and medium fashion brands and the people who make them…

Volume, Volume, Volume!

Sri Lanka’s apparel manufacturing industry is a highly volume-driven one. While the industry had become expert manufacturers for bulk productions, their setups and infrastructures are not geared towards handling small- or medium-sized orders without bringing in significant losses and wastage. This is the first and foremost reason for local SMEs to find it challenging to have their collections manufactured in Sri Lanka, using the fantastic production and finishing facilities available in the island.

The Point About Price

According to Harshi Alexander, COO of the popular fashion retail brand Fashionmarket.lk, finding manufacturers who work with small and medium volumes is not the main challenge, because they do exist.

The price of low-volume manufacturing is so high compared to what we get in return at the end of the day. It is just not great in terms of getting our products priced right for the consumer which keeps us limited to doing niche, designer pieces that are quite special, so we can match the product and price. So this means, making our own basics, say a plain white t-shirt, and selling it for the right price is impossible. This is why most local brands do high-end pieces and supplement basics with imports or stay off that completely,” she mentions.

The True Price of Small Orders

With the obvious need for manufacturing entities that can take up small and medium orders for local fashion brands, several companies that specialise in it have popped up over the past decade. One of them is Libanky, by designer and manufacturer Senari Dewapura. According to Senari, managing small and medium orders with high quality is still a pricey endeavour despite the numbers being less. “Quality is a time-consuming thing. If you want a product in a certain quality, you have to be prepared to give it that time. And the moment you put that time into it, the price does climb up…this is why it’s not practical to pull down the price drastically despite the volume being smaller. It’s a tough one,” Senari tells Apparel Resources.

The Fabric Dilemma

As Sri Lanka doesn’t produce its own woven fabrics, sourcing this staple has become a major challenge for local brands. The solutions are to work with a surplus in the market or import. Imports have been proven to bring in hefty taxes unless the orders are large enough to strike a deal that would outweigh them. Speaking about the option of working with market surplus fabric, Shayani Alwis behind the popular brand Shay Int. says that it leaves you with limited choices and palettes and having to create your collections around what’s available in the market, instead of presenting the brand’s vision into the market. But, she had managed to work around this by simply approaching the challenge from a different angle. “We worked on strengthening our designers’ ability to work with multiple prints, and now we have a good sense of choosing and pairing with a huge array of prints, and the ability to get a very eclectic mix of colours right,” Shayani explains us.

Some brands opt to work with locally made artisanal fabrics and handlooms, keeping their product niche and focussed.

A Lot to do with the Stock-lot

The ‘stock-lot’ market is comprised of export order rejects with minor defects. While it has its pluses of preventing rejects going into landfill and waste, plus, giving the domestic market access to high-quality fashion products at affordable prices, stock-lots are also a major competitor for local brands. Harshi of Fashionmarket.lk says that the stock-lot market featuring export quality clothing that has been made to superb standards for incredibly low prices makes it near-impossible for local brands to compete with them at price point. “Even I buy them. I mean, who wouldn’t want to buy a perfectly fine H&M work blouse for less than a thousand rupees? We can’t compete with that price,” avers Harshi.

Even with these challenges, Sri Lanka’s homegrown brands are evolving forward, while the number of labels is also on the rise. It will be interesting to analyse how these brands continue to compete on price and quality points with the stock-lots and global competitors as the domestic fashion consumers become more and more demanding.