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by A.H.H. Saheed, Marketing Specialist, Textile Training and Services Centre

The world trade in apparels in year 2000 were US $ 199 billion. It is estimated that for year 2001 the world trade should reach US $ 207 billion. Woven apparel reaching US $ 120 billion and knit apparel US $ 87 billion.

The global apparel industries are sensitive to economy and the demand for the products is affected by the changes in the global economy.

The year 2000 was a good year. It recovered from the impact of the Asian crisis and its aftershocks.

But in 2001 conditions have changed with the low growth of the economy of the industrial countries, followed by the terrorist attack in U.S. on September 11 and subsequent war in Afghanistan.

The terrorist attacks of September 11 severely affected what was already a difficult economic situation in U.S. and globally.

Although the effects of the shock were felt immediately by the transportation and tourism industry the ripples have spread rapidly throughout US economy. The consumers' uncertainty of future have moderated their expenditure plans.

This impact in turn made retailers of US and elsewhere to place fewer orders with manufacturers and as a result export prices have dropped.

Lucrative market

The US apparel market is the world's msot lucrative market and msot of the developing countries are aiming this market. The Untied States is by far the leading world market for apparels and its imports for year 2001 totalled US $ 56,462 million. US market share of world apparel imports was 29% in year 2000. US, Japan and Europe collectively take nearly 80% of world apparel imports.

The leading world apparel exporting countries are China and Hong Kong, supplying nearly quarter of all world apparel exports. This is followed by Italy and Mexico.

The US apparel imports for year 2001 were US $ 56,462 million as against US $ 57,231 million during the same period of 2000, down 1.34%.

The imports for December, 2001 were US $ 3,560 million as against US $ 3,917 million during the same period of year 2000 and down by 10.1%. The major suppliers were Mexico-US $ 7,811 million (-7.%), China US $ 4,602 million (2.%), Hong Kong - US $ 4,211 million (-6%) Honduras US $ 2,344 million (+0.9%), Dominican Republic US $ 2,252 million (-7%), Indonesia US $ 2,215 million (8%), Korea US $ 2,191 (-4%), Bangladesh - US $ 2,101 million (1%), Taiwan US $ 1,811 million (-12%), India US $ 1,717 million (-4%), Sri Lanka's recorded an export value of US $ 1,505 million and increased its exports by 2.2%, although many major suppliers to US had a set-back. Sri Lanka's share in the US market was 2.66%.

Purchase patterns

The purchase patterns in the US changed in 2001 even before September 11. The worst affected have been variety chain stores and specialty retailers such as Gap, Kmart.

On the other hand mass merchandisers such as Wal' Mart, Kohl's, Target, have fared relatively better in recent months as consumers in search of value for money have switched away from higher price department and speciality stores.

However, all retailers have responded by inserting greater pressures on apparel manufactures to lower their prices, to be more innovative in their product offer and to provide higher level of service to face intense competition for market share and to maintain consumer interest.

The spending by US consumers has become more conservative. However, the retial sales after a brief surge before the thanks giving period have slowed but improved modestly during the week of Christmas.

Retail sales at discount, chain and department stores rose in the four retial weeks of January, but the pace of sales slipped in the last week with the onset of cold weather keeping consumers away from the department stores. US imports of apparel during January 2002 was US $ 4,461 million as against US $ 4,997 million in January 2001 - down 11%

The market will depend on the depth of the US recession and how long it will take to recover. Some believe will recover as early as 2002 some say it is unlikely before 2003.

However, the recovery will be a slow uphill climb. Recessions unlike wars, end slowly and undramatically.

The attack has also made a shift in sourcing a patterns away from distant locations. This may give a short-term boost to neighbouring countries.

Surge in imports

In the EU, output recovered in 2000, as the weak Euro boosted exports especially to the US, but imports surged as Asian countries made further inroads. In EU, Consumption of clothing shows a moderate growth of around 2-3%. The five countries namely Germany, UK, France, Italy and Spain account for more than 80% of clothing consumption. In many EU Countries demand for formal (traditional) wear is declining in favour of casual and leisure wear which implies higher increasing sales in terms of volume rather than in terms of value.

EU apparel imports is around US $ 85 billion per annum. Germany remained the leading importer followed by UK, France, Italy and Netherlands. leading supplier for EU market is from EU countries supplying around 45% of total requirements.

Asia around 30% and Central Europe Baltic states/CIS around 10%. Imports from outside the EU increased much more strongly than intra-EU trade. Asian low-price suppliers such as China, Bangladesh, India Sri Lanka operate mainly in price sensitive segments.

In pricing a multiplier between 2.0 and 2.6 on the manufacturer's or importer's price is used to calculate an appropriate final-consumer price. This means the exporter's price should be in the ranges of 40%-50% of the final price.

In Japan, imports continue to grow especially from China, which now supply 78% of Japan total imports. Italy continues be the leader in high - fashioned garments in Japanese market.

In the future, it is doubtful that western consumers will look for countries which merely offer the low wage rates.

Increasingly will look for quick response, higher production standards and improved levels of efficiency.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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