The development history of clothing and textile industry
The apparel and textile industry can be divided into two main parts: producing textiles and fabrics from raw materials, and transforming those fabrics into clothing and other accessories. The textile part of the industry involves taking raw materials, transforming the materials into yarn, and then dyeing and finishing the fabrics made from the yarn.
Today, many textile companies in the industry are vertically integrated, much like the process described earlier. Textile fabrics can include cloth, but also materials such as rugs, towels, upholstery, and even industrial products such as fire hoses. The apparel industry cuts fabrics and other materials and then sews them together to create clothing or accessories, including footwear, coats, pants, and tops. The industry also includes less common knitting mills.
The textile and clothing industry has a long history; bone needles date back to 30,000 BC. At that time, most clothing was made from prepared animal skins, and civilizations wove together various animal and plant fibers to create unique clothes.
Prior to the Industrial Revolution, the industry was relatively slow to develop and lacked advancement. At the time, technologies including the cotton gin and foot-operated sewing machine significantly changed the production of textiles and clothing. The textile industry was one of the first industries to be mechanized due to the high labor required to make a piece of cloth.
Since then, there have been many technological advances in the textile industry, which relies heavily on technology and mostly adopts automation. The clothing industry still relies mainly on manpower (people operating sewing machines, etc.). This is the main reason why the industry is assigned to markets where labor is cheaper.
The transformation of China’s clothing industry
According to the United Nations Comtrade database, the global textile and clothing export market was worth $772 billion in 2013.
In 2016, the largest clothing exporters were China ($161 billion), Bangladesh ($28 billion), Vietnam ($25 billion), India ($18 billion), Hong Kong ($16 billion), Turkey ($15 billion), and Indonesia ($7 billion).
For more than a decade, China has been the world’s largest clothing manufacturer, accounting for more than 50% of global clothing production. In 2021, the country’s clothing market generated an impressive $303 billion in revenue. Guangdong Province is the center of clothing production, with a large network of more than 28,000 exporting companies. In the first quarter of 2022 alone, the province’s clothing manufacturing industry contributed $6.3 billion in exports.
However, since 2015, China’s clothing industry has shown a clear trend of sustainable development, de-emphasizing scale expansion and focusing more on technology-driven methods to improve productivity. This shift is mainly due to rising labor costs, forcing companies to switch from labor-intensive practices to more efficient and automated methods.
Challenges facing apparel retailers
Retail in the clothing industry involves selling clothing to consumers through physical stores and online stores. Clothing retailers range from small independent boutiques to large chains and department stores. Retail is an important part of the apparel industry as it connects manufacturers and consumers, drives demand for clothing, and makes a significant contribution to the economy.
The apparel retail industry has undergone significant changes in recent years due to the rise of e-commerce. Online retailers such as Amazon, ASOS, and Zara have disrupted the traditional brick-and-mortar retail model, forcing established retailers to adapt to new consumer behaviors. Many traditional retailers have invested in their online platforms to provide a seamless shopping experience across multiple channels.
Retailers typically use a range of strategies to attract and retain customers. These strategies include offering discounts and promotions, providing excellent customer service, and building a strong brand image. In recent years, there has been a growing focus on sustainability and ethical fashion, and retailers are adapting their strategies to cater to these trends. Many retailers now offer sustainable clothing lines and use environmentally friendly production processes to attract consumers who prioritize sustainability.
The apparel retail industry is highly competitive, and retailers are constantly innovating to stay ahead. Fast fashion retailers such as H&M, Zara, and Forever 21 have gained popularity by offering fashionable clothing at affordable prices. However, in recent years, the impact of fast fashion on the environment and society has come under the spotlight, leading to a rise in the popularity of sustainable and ethical fashion.
Fast fashion is a major source of retail sales in the apparel industry. Retailers typically do not produce their own goods, so they purchase them from wholesalers and manufacturers. This allows them to lower their prices and make goods more affordable for consumers. This process is called a supply chain, which is how companies and suppliers distribute products to consumers. Fast fashion companies can quickly manufacture and distribute their designs. These quickly made designs often lead to extra waste, low-paid workers, and overconsumption. Fast fashion companies include Zara, Forever21, Old Navy, and Gap.
Overall, retail plays a vital role in the apparel industry, connecting manufacturers with consumers and driving demand for clothing. The industry is constantly evolving and adapting to changes in consumer behavior and social trends.
Competition among clothing manufacturers
Export processing zones (EPZs) are designated areas where manufacturers can import materials, process and assemble goods, and then re-export them duty-free. Many manufacturers see EPZs as catalysts for economic growth with minimal regulation and therefore move production to these zones to maximize profits. According to UN Women (formerly UNIFEM), women make up the majority of the EPZ workforce, 90% in Nicaragua, 80% in Bangladesh, and 75% in Honduras, the Philippines, and Sri Lanka.
There are several types of manufacturers: integrated manufacturers, licensed manufacturers, and contract manufacturers. Levi Strauss is a well-known integrated manufacturer in the industry that designs and produces its products. Licensed manufacturers such as Warnaco operate their manufacturing plants and sell clothing under brand license. Contract manufacturers may have connections and relationships with designers or use brokers to obtain new business. Large textile companies include International Textile Group and Unifi. Affordable fashion has created a boom in the clothing and textile industry, led by Sweden’s H&M (Hennes and Mauritz), Spain’s Zara, and the world’s largest retailer Walmart.
Apparel manufacturing often occurs in countries with low labor costs, but fashion companies need to do more to succeed. A company’s production efficiency is the most important profitability factor for apparel and textiles. Companies must have enough product differentiation and global brands to command higher prices.
The general trend for companies in the industry is to modernize quickly to keep their production efficiency ahead of increasingly global competition. They must also modify existing products to meet customer needs, such as making clothing with recycled materials, incorporating other materials into products (such as electronics), or creating faster and more efficient supply chains to get goods to consumers more quickly.
Consumer tastes almost entirely determine demand. The recession forced many consumers and businesses to cut budgets and look for cheaper products. For manufacturers, this meant that they had to almost immediately shift to producing more affordable products that consumers were willing to buy; there were some exceptions for high-end clothing. There was also a trend to merge with other companies in order to better cope with competition. However, despite the fierce competition, many companies have succeeded by finding and dominating niche markets. This means that designers and department stores need to re-create marketing and sales strategies to get to where consumers are spending their money.
The cutback in spending due to the economic crisis has created a class of consumers who want to save money and shop around for cheaper products. This does not bode well for the apparel industry and gives them a bad future outlook as they rely on consumer demand.
High-end apparel companies, such as Coach and Jos. A. Bank, have started producing low-cost products or offering them at deep discounts. This will undoubtedly affect their profits. Even lower-priced apparel manufacturers will be affected as they too will have to reduce product prices or run promotions to attract new consumers and retain old consumers who may be willing to keep their old garments for a long time.
