In July 2022, the American Fashion Industry Association released its annual industry benchmark report. This is the ninth consecutive year that the association has released a report. Based on the survey results of member companies, the report analyzes the main opportunities and challenges faced by the U.S. textile and apparel industry and companies and the purchasing trends of U.S. textile companies. This article focuses on excerpting and summarizing the portion of the report on the purchasing trends of U.S. textile and apparel companies.
1. Purchasing situation of U.S. textile and apparel companies in 2022
(1) The purchasing diversification trend of U.S. textile and apparel companies has become more obvious, but Asia is still the main source of purchasing.
In order to adapt to the changing business environment and deal with issues such as shipping delays, supply chain interruptions, and over-concentration of procurement sources, more and more U.S. textile and apparel companies are paying attention to the issue of procurement diversification. The survey shows that the purchasing locations of U.S. textile and apparel companies in 2022 include 48 countries and regions around the world, up from 43 in 2021. More than half of the companies surveyed will be more diversified in 2022 than in 2021, with 53.1% of the companies purchasing from more than 10 countries and regions, higher than 36.6% in 2021 and 42.1% in 2020. This trend continues This is even more pronounced in companies with fewer than 1,000 employees.
While purchasing is diversified, Asian countries still occupy a major position. Among the 10 most important purchasing countries for U.S. textile and apparel companies, Asia accounts for 8, among which China, Vietnam, Bangladesh and India rank among the top four, with 91 buyers each. %, 88%, 84% and 72% of the surveyed companies purchase from the above-mentioned countries. The only two non-Asian countries in the top ten are Mexico and the United States.
(2) “China + Vietnam + Others” is still the mainstream model of US textile and apparel procurement, but its connotation has changed.
On the one hand, China is still the main source of procurement for U.S. textile and apparel companies, but U.S. companies are less dependent on China. One-third of the companies surveyed said that their purchases from China in 2022 will not exceed their total purchases. 10%, 50% of the surveyed companies said that their procurement from Vietnam exceeds that from China. At the same time, the share of “China + Vietnam” has also dropped from 40-60% a few years ago to 20-40%. On the other hand, members of the Central American Free Trade Agreement (CAFTA-DR) have become an increasingly important source of procurement. In 2022, about 20% of the companies surveyed said that their procurement proportion from the above-mentioned countries will exceed 10%. In 2021, only 7% of the companies surveyed reached this ratio.
(3) Compared with ready-made clothing, the procurement sources of textile raw materials are relatively concentrated.
Asia, especially China, still occupies a dominant position in the procurement of US textile raw materials, especially fibers and clothing attachments (such as buttons, zippers, accessories and labels, etc.). About one-third of the companies surveyed said they source all their fiber from Asia. 93.8% of the surveyed companies purchase fiber in China, 87.5% of the surveyed companies purchase clothing attachments in China, and 78.1% of the surveyed companies purchase yarn in China.
(4) The advantages and disadvantages of the main procurement sources have changed to a certain extent, and Southeast Asia has an obvious price advantage.
According to a survey of interviewed companies, in the eyes of American companies, the advantages and disadvantages of various purchasing locations will change in 2022. Affected by shipping delays and supply chain disruptions, the United States and Mexico have become more advantageous in terms of market response speed due to their geographical advantages. The price advantages of Southeast and South Asian countries such as Vietnam, Bangladesh, and Cambodia, as well as members of the African Growth and Opportunity Act (AGOA), are even more obvious. Respondent companies believe that China’s advantage in procurement flexibility has declined due to the impact of epidemic prevention policies. Bangladesh’s social responsibility risks have declined and its competitiveness has increased.
2. Purchasing trends of U.S. textile and apparel companies in the next two years
(1) The trend of procurement diversification will continue, and India, Bangladesh and Central American countries may receive more orders.
Nearly 40% of the companies surveyed plan to adopt a diversification strategy in the next two years to purchase from more countries and regions or cooperate with more suppliers, up from 17% in 2021. 28% of the companies surveyed said they would not expand the scope of purchasing countries, but would cooperate with more buyers from these countries, down from 43% in 2021. The survey shows that India, Central American Free Trade Agreement member states and Bangladesh have become the countries that US apparel companies are most interested in promoting sourcing diversification strategies. 64%, 61% and 58% of the surveyed companies respectively said they would do so in the next two years. Purchase volume from the above three regions will be increased.
(2) U.S. companies will reduce their dependence on China, but it will be difficult to decouple from China.
Most U.S. companies plan to reduce their dependence on China, but admit that they cannot completely “decouple” from China. 80% of the companies surveyed plan to continue to reduce purchases from China in the next two years to avoid compliance risks brought by the “Xinjiang-related Act”, and 23%The interviewed companies plan to reduce purchases from Vietnam and Sri Lanka. At the same time, the interviewed companies stated that they cannot “decouple” from China in the short to medium term, and some clothing companies regard China as a potential sales market and plan to adopt a business strategy of “localized production + sales in China”.
Note: The views expressed in this article do not represent the views of this platform.
</p
