EMERGING OPPORTUNITIES IN FASHION INDUSTRY

Dr. M.MADHAVANASST. PROF. OF ECONOMICS

ARIGNAR ANNA GOVT. ARTS COLLEGENAMAKKAL, TAMIL NADU

THE FASHION Consumer acceptance of a

particular style at a particular period of time

DemographicsPsychographics

Fashion SociologicalPsychological

FUTURE OF FASHION & TEXTILE INDUSTRY DEPENDS ON

TECHNOLOGICAL UP GRADATION ROLE OF GOVERNMENT EXPLORING NEW MARKETS & PRODUCT

INNOVATION / DEVELOPMENTS

TEXTILES

WOVEN KNITS NON WOVEN (felt) (bond)

THE STEPS TOWARDS FREEING INTERNATIONAL TRADE SO FAR

ATC (Agreement on textiles and clothing – since 1995)

WTO (Member signatories removed quotas from Jan 1, 2005)

Step Period % to be brought under GATT

I 1.1. 1995 to 31.12.1997 16%

II 1.1.1998 to 31.12.2001 17%

III 1.1.2002 to 31.12.2004 18%

IV 1.1.2005 49%

Who can win?

The person who can produce quality products at competitive price

How to achieve? Productivity improvement Technological up gradation Stringent control over quality Frequent training Sourcing new markets and introducing

new strategies in marketing Own design & Brand development

The Indian scenario

“OUR COUNTRY IS CONSISTENTLY LOSING EVERY OPPORTUNITY TO MEET

THE INTERNATIONAL FRATERNITY, TO IMBIBE GLOBAL WORK PRACTICES,

TO ACQUIRE GLOBAL VISION, FORM STRATEGIC ALLIANCE AND JOINT UNITS,

TO REACH OUT NEW CUSTOMERS, OR MARKETS, KEEPING ALOOF IN

INTERNATIONAL SEMINARS, CONVENTIONS, INDUSTRY FORUM.

IN CASE OF GARMENT INDUSTRY WE REPRODUCE THE DESIGNS GIVEN BY THE

BUYERS & NOT DEVELOPING OUR OWN STYLES AND DESIGNS.

OPINION OF TRADE EXPERTS ABOUT INDIAN TRADE

PARAMETER / SECTOR INDIA GLOBAL COTTON CONTAMINATION 30 – 50% 15 – 18%

COTTON PRODUCTIVITY 300 KG / HA 580 KG / HA

SPINNING CAPACITY 36% 90%ITALY 50% USA

SHUTTLE LESS LOOM 9550 85,800 CHINA 29,000 KOREA

EXPENDITURE ON R & D 0.2% 1.5 TO 2%

PROCESSING TECHNOLOGY MANUAL AND SEMI AUTOMATIC ADVANSED MECHANISED

TESTING OF MATERIALS CLIENT ORIENTED INTEGRAL PART OF THE SYSTEM

MANUAL VS. POWER MACHINES 31% : 69% 0.1% : 99.9%

ISO 9000 462 3,673INFRASTRUCTURE 20 52

WORKERS TRAINING AD – HOC SYSTEMATIC AND INDUSTRY COMMITTED

GLOBAL COMPARISON

Average cost per operator hour (in cents)

India 0.58

Pakistan 0.37

China 0.69

LABOUR COST COMPARISON

(COMPLED BY: WEMER, USA)

Man-made Textiles 7.67% 7.67%Silk Textiles 2.09% 2.09%Woollen Textiles 2.5% 2.50%Coir 0.49% 0.49%Jute 1.22% 1.22%Handicrafts 13.3% 13.30%Cotton Textiles 32.4% 32.40%Readymade Garments 40.2% 40.20%

INDIA'S Textile Exports

Coir 0.49%

Jute 1.22%

Man-made Textiles 7.67%

Silk Textiles 2.09%

Woollen Textiles 2.5%

Handicrafts 13.3%Cotton Textiles 32.4%

Readymade Garments 40.2%

CHINA VS. INDIA TEXTILES РPRESENT STATUSΠVERY HIGH DISCIPLINE

ΠLOW POWER COST

ΠLOW INTEREST COST

ΠHIGH MODERNIZATION

ΠSIMPLE REGULATIONS

ΠHIGHLY DEVELOPED INFRA-STRUCTURE

ΠEXIT POLICY

ΠSTRONG RE-TRAINING

ΠECONOMY OF SCALE UNIT

ΠHIGH QUALITY PRODUCT

ΠTARGET 40% OF WORLD SHARE

VERY AVERAGE DISCIPLINE

HIGHER BY 54%

14.5% TO 18% AS AGAINST 6%

SLOW RESPONSE

COMPLEX AND COMPLICATED

POOR INFRA-STRUCTURE

UNCERTAIN POLICIES

TOTAL ABSENCE OF TRAINING

SLOW RESPONSE

CASUAL WEARS

PROVIDING 15% BUT NOT REACHING EVEN 2%

Undeveloped infrastructure

Low productivity / high absenteeism

Uncooperative labour

Environmental issues

Highly regulated sector

UNCERTAIN FUTURE

PRODUCTIVITY - YIELD

COTTON

Factor Unit China India Difference

Area (‘000) hectare 4,600 8806 + 4206

Production (‘000) tons 4,600 2805 _ 1795

Yield / hectare tons 1,000 318 _ 682

COUNTRY % of share in world trade apparel

World 198940

USA 66392 33.4

EU 85909 43.2

SOURCE WTO STATISTICS

APPAREL IMPORTS (MILLION US $)

CANADA5%

N.QC16%

EU39%

USA40%

CANADA

N.QC

EU

USA

INDIA’S Share of Market Segments

Marketwise Analysis

Exports to USA have gone down substantially by (-) 12.92% in value, and by (-) 6.01% in quantity terms. Canada has also registered a substantial loss of (-) 15.10% in terms of value and (-) 16.93% in terms of quantity. EU has seen an decrease of (-) 4.87% in terms of value and a increase of 1.55% in terms of quantity. Non-Quota countries have registered a decline of (-) 52.45% in quantity terms and of (-) 57.07% in value terms.

VOM CHINA INDIA

EXPORTS $ bn 194.8 34.5

IMPORTS $ bn 165.8 44.46

BOP $ bn + 29.0 -9.96Source – clothesline Jy / 01

SWOT

ANALYSIS

STRENGTH

FIBRE

LABOUR COST

HUMAN RESOURCE

WEAKNESS

QUALITY

DELIVERY SCHEDULEABSENCE OF QUALITY PROFESSIONALISM

LIBERALISATION

EXHIBITIONS

POLITICAL -

UNDERSTANDINGS

POPULATION

PHASING OUT QUOTA

REGULAR BUYERS

NEIBOURING COUNTRIES

PHASING OUT OF QUOTA

INTERNATIONAL PRICING

SLOW RESPONSE

LACK OF TRAINING CENTRE

INCREASING COST

UNSTABLE POLITICAL

ENVIRONMENT

OPPORTUNITY THREAT

SWOT ANALYSIS

EXPORTERS PRESENT SITUATION

Attitude To change

Quota Quality, Delivery,lead time

Subsidies World class Manufacturing

Price Customer focus, quality, Agility

Transparency Sourcing

Sourcing Trust, partnership

Delayed delivery speed, service

Quality Strategy

POSITIVE SIDE OF INDUSTRY HAVING GREAT HOPE WITH EXISTING BUYERS

& STILL MAINTAIN THE GOOD RELATIONS STARTED TO REALISE THE IMPORTANCE OF

TECHNICAL UP GRADATION STARTED TO REALISE THE IMPORTANCE OF

TRAINED MAN POWER VERY GOOD QUALITY, ENVIRONMENT &

SOCIAL ACCOUNTABILITY AWARENESS(ISO –9000,14000, SA-8000)

THE ROLE OF GOVERNMENT THE NATIONAL TEXTILE POLICY

Aim to develop a strong and vibrant industry that can produce cloth of good quality at acceptable prices to meet the growing needs of the people.

Employment generation Compete with confidence for an

increasing share of the global market.

THE MAIN OBJECTIVES OF NATIONAL TEXTILE POLICY To equip the industry to withstand pressures of import penetration and maintain a dominant presence in the domestic market.

Liberalize controls and regulations so that the different segments of the industry are enabled to perform in a greater competitive environment.

Enable the industry to build world class state – of – the – art manufacturing capabilities in conformity with environmental standards.

The National Textile Policy2000

The endeavor will be To achieve the target of textile and apparel

exports from the present level of 11 billion dollar to $50 billion by 2010 of which the share of garment will be $25 billion.

To assist the private sector to set up specialized financial arrangements to fund the diverse needs of the textiles.

To set up a venture capital fund for tapping knowledge based entrepreneurs of the industry, facilitate the growth and strengthen HRD institutions like NIFT, NIFT-TEA, NID, etc., on innovation lines.

The Highlights of the PolicyGarments The highly export oriented sector has been taken

off the SSI(small scale industries) reservation list, enabling corporates to invest large amounts in garment manufacturing.

The deservation also enables free flow of FDI (Foreign Direct Investment) to the extent of 100%.

This will prepare Indian garment exporters to face the fierce international competition that is likely to ensure once the export quota regime is dismantled.

Employment generation In the light of 2004 regime the exporters are

showing much interest with trained Fashion designers, Merchandisers, Production managers etc,

In the case of fashion designing, so far the industry people are using the design supplied by the buyers.

Now the awareness of fashion designing is taken place due to the brand promotion activities.

The new domestic brands are showing keen interest in developing new designs.

Each and every day the new entrepreneurs are entering in to the field.

Since the growth export sector is positive, the growth of the industries which are concentrate the production of accessories are also increasing.

Careers in Fashion Industry

Whole sale Trade Retail Designing Opportunities in Fabrics and fashion Opportunities in Fashion Illustration Opportunities in Fashion Writing Opportunities in Modeling Merchandiser Quality controller Production Manager, Supervisor Fabric Coordinator Sampling Incharge

THANK YOUmanimadhavan@gmail.comPrepared during 2004-2005