According to a global survey, fashion companies in the United States are expanding their sourcing base beyond China, Vietnam, and Bangladesh to offset the increasing geopolitical risks. However, the corporations are not necessarily withdrawing from Asia.
According to the report titled 2024 Fashion Industry Benchmarking Study, although Asia continues to be the primary region for clothing sourcing, the top suppliers in the region are progressively changing.
The report stated that seven out of the ten most popular locations for respondents to source clothing in 2024 are in Asia, albeit the ranking of these leading Asian suppliers has shifted.
The eleventh edition of the poll, which was co-conducted by the University of Delaware and the United States Fashion Industry Association, revealed its results on Monday.
The study was conducted in the current year from April to June, and included executives from 30 leading fashion brands, retailers, importers and wholesalers, including some of the largest brands and retailers in the US.
It revealed that although China (100 per cent utilisation rate) and Vietnam (89 per cent utilisation rate) continued to lead, more respondents reported sourcing from India (89 per cent utilisation rate; ranked 2nd in 2024 against 4th in 2023) than from Bangladesh (86 per cent utilisation rate; ranked 4th in 2024 against 3rd in 2023) for the first time since the US Fashion Industry Association conducted the survey.
The survey also stated that this year, a larger proportion of responders were recruited from Pakistan (61 per cent utilisation rate), Indonesia (75 percent utilisation rate), and Cambodia (75 per cent utilisation rate).
Approximately 48 per cent of respondents to the survey said they would be interested in increasing the amount of clothing that is sourced from Bangladesh during the next two years, compared to 52 per cent in 2023 and 58 per cent in 2022.
‘For example, the high-profile labour protests over the minimum wage increase in late 2023 brought Bangladesh’s social responsibility record in the garment sector back into the news headlines,’ the report read.
Bangladesh was well-known for being a cost-competitive base for the clothing industry, but the report noted that its poor product diversity beyond basic cotton goods and knitwear had hampered its export potential.
India emerged as the most popular sourcing destination for Asia-based suppliers in 2024, according to the survey, and nearly 60 per cent of respondents planned to increase their sourcing from the nation through 2026.
In 2022, India ranked third globally in textile exports and sixth globally in apparel exports, indicating its potential to expand as a top sourcing destination for US fashion companies.
According to other research, India’s garment exports to the United States rely significantly less on imported components than those of economically less developed nations like Bangladesh,
Cambodia and Vietnam because of their highly established local textile manufacturing capability.
Additionally, the survey noted that sourcing from India is thought to involve comparatively lesser geopolitical risks due to its heightened status as a strategic partner with the United States.
The study also revealed that, among nations that produce clothing worldwide, Bangladesh continues to be the most competitive nation in terms of product costs, earning a score of 4.
It revealed that Vietnam has an average price-competitiveness grade of 3.5.
