Spreading Apparel Manufacturing to Global Markets

The global economy gives companies in the United States plenty of opportunities to keep prices low. As the world changes, some countries are becoming more important to the apparel industry. While this could help companies lower their prices, the advantages come with some risks.

Countries That Play Important Roles in Apparel

China manufactures more clothes for the United States than any other country. Over the next few years, industry experts expect companies to rely less on China, as they search for opportunities in other countries.

Some countries that could eclipse China as the largest clothing manufacturer include:

  • Vietnam
  • India
  • Bangladesh

These countries already have plenty of production facilities. In fact, Vietnam is currently the second-largest clothing manufacturer for U.S. stores.

As China's economy continues to grow, so will its wages. Manufacturing wages have already risen considerably over the last two decades. Since 2001, wages have increased by about 12 percent each year.

That puts a lot of stress on U.S. companies to find cheaper alternatives. Vietnam, India, and Bangladesh could offer the solution to this problem.

Emerging Countries for Apparel Manufacturing

There are also other emerging markets some retailers may want to consider. These countries have extremely low wage expectations that help keep production costs low.

Madagascar, for instance, has some of the cheapest labor in the world. The average hourly wage is just $.18 an hour. This has already started to attract apparel companies looking for cheap labor.

Other countries with low wages include:

  • Bangladesh — $.23 an hour
  • Pakistan — $.32 an hour
  • Ghana — $.32 an hour

Potential Problems of New Apparel Production

Despite the low cost of manufacturing clothing in these countries, there are some risks that should give retailers pause. Madagascar has a high corruption perception index that can make it hard for U.S. companies to trust manufacturers and government officials. When a country is known for its corruption, it's hard to take any promises seriously.

War and social unrest are also serious concerns. Terrorist groups like ISIS have gained much power in Pakistan. Some companies are concerned their customers will dislike purchasing clothes manufactured there. If it were discovered that a Pakistan factory was funneling money to terrorist groups, it would quickly become a PR nightmare for companies using that factory's services.

War and social unrest can also affect your supply chain. Factories need electricity to operate. It only takes one attack to destroy a city's electrical grid. This is just one of the many concerns associated with taking advantage of cheap labor in unstable countries.

Getting the Production Services You Need

While outsourcing apparel production can lower costs, it can also increase risks to your supply chain and reputation.

The Apparel Logistics Group offers affordable production services without these risks. It has a 158,000 square-foot distribution center located in Dallas, Texas. As an authority in third-party logistics, Apparel Logistics can find solutions that increase efficiency while improving quality.

Complete this consultation request form to learn more about how Apparel Logistics Group can give you the advantages of a global market without putting your business in jeopardy.

Posted: 12/31/2015 10:32:39 AM by Global Administrator | with 0 comments

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