As we hit the third quarter of the year, official
figures from the US Office of Apparel and Textiles (OTEXA) reveal US imports of
apparel have fallen 25.2% in the year to September, with all 10 major apparel
suppliers to the US experiencing a shipment decline over the period.
Over the
nine-month period, the apparel supplier to see the biggest decline was
Cambodia, with shipment volumes falling 32.9% to 759m SME.
Interestingly, with the US
push to diversify apparel sourcing away from China, one might be inclined to
believe the wider Asia and Central American regions might benefit.
But Pakistan saw the
next biggest fall in shipment volumes over a nine-month period at
30.1% to 511m SME.
Bangladesh closely
followed with a shipment volume decline of 29.4% to 1.76bn SME in the nine-month period
while Indonesia saw a shipment volume of 29.3% to 787m SME.
Honduras shipment
volumes declined 26.6%
over the nine months to 524m SME and Vietnam’s fell 26.5% to 2.94bn
SME.
China, the largest
apparel supplier to the US, saw shipment volumes reduce by 23.9% over the period to 6.77bn SME.
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India’s shipment
volume growth was a negative 22.6% to 959m SME.
Nicaragua and Mexico
both saw more modest declines over the nine months at 12.3% to 446m SME and 11.9% to 536m
SME, respectively.
A breakdown of US
apparel import performance in September
Shipments from all sources to
the US came in at 2.37bn SME with China making up the largest amount in
shipment volume terms at 967m SME.
This was followed by:
- Vietnam
at 375m SME
- Bangladesh
at 181m SME
- Cambodia
at 107m SME
- India
at 103m SME
- Indonesia
at 100m SME
- Pakistan
at 61m SME
- Honduras
at 58m SME
- Nicaragua
at 51m SME
- Mexico
at 48m SME
Commenting on the latest set
of data, Dr Sheng Lu, associate professor in the Department of Fashion and
Apparel Studies at the University of Delaware, explains the fall in
September came down to uncertainties in the US and world economy and consumers’
stagnant demand.
“Specifically, US apparel
imports in September 2023 were 11.6% lower in quantity and 23.1% lower in value
from a year ago. After removing the seasonal factor, apparel imports in
September were still 1.4% lower in value and flat in quantity compared to August
2023. Notably, nearly all major international institutions, from the World
Trade Organization (WTO) to the World Bank, have recently revised their
projections, expecting global trade to grow even more slowly in 2023 than
initially anticipated.”
With Bangladesh suffering the
biggest drop in apparel imports, down almost 30% in quantity and value, Lu
suggests this comes down to US fashion companies typically sourcing
large-volume items from Bangladesh, making the country particularly sensitive
to weakened import demand and; the treatment of Bangladesh as a low cost
sourcing destination that serves the needs of the value market.
“Working-class US consumers
were under more severe economic stress and had to cut their clothing expenses
more substantially. Thus, when measured by the number of stock-keeping units
(SKUs), more clothing items were launched in the luxury and premium market
segments of the US retail market in 2023 compared to the previous year, while
fewer were introduced in the value market segment.”
The Bangladesh garment sector has dominated headlines in recent
weeks with workers embroiled in protests over wages.
Market share
changes for the top 10 apparel suppliers to the US
It’s interesting at this point
of the year to observe how market share has shifted for the top 10 suppliers of
apparel to the US.
The most notable development
is the growth being captured in the Central America region. Mexico has seen a
staggering 2% rise in market share during September and on a year-to-date
basis, market share grew 0.4%. Market share for Nicaragua rose 0.3% during the
same period.
The only other regions to
capture market share growth were China, interestingly, at 0.6% and India at
0.2%.
Lu says: “China slightly
recovered its market share in September 2023. Specifically, China contributed
more than 40% of US apparel imports in quantity and 24% in value in September
2023, the best performance for the country so far in 2023.
“Notably, US companies still
import far more different styles of clothing from China than any other Asian
country. For example, in the first nine months of 2023, about 56,000 SKUs of
“Made in China” were newly launched to the US market, five times more than
Vietnam (about 10,000 SKUs) and over ten more times than Bangladesh.
“Firm-level studies also show that fashion companies’ contracted garment
factories in China overall were much smaller than those in Bangladesh and
Vietnam. This suggests China is increasingly treated as an apparel sourcing
base for flexibility and agility, particularly those orders that may include a
greater variety of products in relatively smaller quantities.”
By Just Style