UOB bank
December 2019
Three key trends that are shaping today's textile, apparel and footwear industry
Trend 1: The need for a transparent and sustainable supply chain is driving supplier consolidation
Major brands in the world continue to shift towards an ethical business model that ties in with demand from modern day customers who not only want to know about who cuts, sews and assembles their garments but also whether these processes contribute to a more sustainable world. The desire for a transparent and sustainable supply chain has driven brand owners to streamline the number of suppliers they work with.
Trend 2: Brands adopting a diverse geographical sourcing base
Despite having a more streamlined list of suppliers, the sourcing base for brands is likely to remain geographically diverse. Of late, uncertainties in the area of trade policy have particularly highlighted the need for brands to have a diversified sourcing base. As a result of the US-China trade tension, countries such as Vietnam, Indonesia and Cambodia are deemed to be potential sourcing replacement countries post-implementation of tariffs on China by the United States (US).
Trend 3: Major brands are driving sustainable changes through individual and coalition efforts
In a market where consumers are more aware about brands’ sustainability efforts to improve their product offering, brands have been working tirelessly to sharpen their identity and win public trust. With sustainable sourcing as a key item in their long term agenda, a proactive approach has been undertaken by the brands to ensure that all their suppliers comply with regulations on both environmental protection and worker safety.
UOB is able to offer bespoke solutions to assist in improvement of supply chain transparency or diversification of sourcing base to companies operating in the textile, apparel and footwear value chain. For more information, contact us here.
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