As the global supply chain crisis continues, Japan is determined to move some clothing production lines back to its home country. Since the clothing industry was moved overseas more than 50 years ago (1970s), Japan’s clothing industry has relied heavily on overseas production. However, the prerequisite for being able to safely place production lines overseas is that logistics and factory production can operate normally. However, the global supply chain crisis has lasted for more than a year and is still unresolved. Many Japanese companies are already as anxious as ants on a hot pot.
A report by Japanese media on December 15 pointed out that Japanese clothing companies such as WORLD and TSI Holdings plan to transfer part of their production in China and Vietnam back to the country. Among them, WORLD plans to achieve localized production of most goods within 3-5 years, and at least increase the proportion of local production to more than 30% (currently 20%).
Another giant, TSI Holdings, hopes to increase the production capacity of its garment factories in Yamagata and Miyazaki Prefectures, Japan, and hopes to increase the proportion of localization to 30%-50% (currently 10%). However, although the above-mentioned Japanese companies are all vying to make “lofty ambitions”, they all know that moving production back to their hometown means paying higher production costs. TSI Holdings comforts itself that this wave may not be a loss, because returning to China for production can save time and logistics costs.
Previous data showed that in terms of sales, nearly 80% of the Japanese clothing industry relies on overseas production; in terms of sales, 98% of clothing requires overseas supply. Currently, clothing brands such as Nike, Adidas, and Uniqlo allocate production lines according to the consumer market. To put it simply, factories should be located wherever consumer demand is strong.
In July this year, Nike’s factory production in Vietnam encountered a stagnation due to Vietnam’s implementation of strict epidemic prevention and control measures. By October, Vietnam lifted its blockade restrictions and news emerged of millions of workers fleeing factories. No one is working in factories, and suppliers to Nike and Adidas have had to suspend operations in Vietnam. Some institutional analysts said that Vietnam’s epidemic blockade measures may lead to a reduction of 180 million pairs of Nike shoes this year.
They are all clothing brands that rely on overseas suppliers. Japanese clothing manufacturers may be afraid of following in the footsteps of Nike. However, will moving the production line back to the local area ensure that everything is foolproof?
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