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This Year’s USFIA Fashion Industry Benchmarking Study: What Sourcing Executives Think about China

The United States Fashion Industry Association (USFIA) released recently its fourth annual Fashion Industry Benchmarking Study (the Study)  , which was based on a survey of sourcing executives from 34 leading US fashion companies in April-May this year. The Study reveals the executives’ views on the outlook of the US fashion industry, sourcing trends, compliance and the US trade policy agenda, etc. Our last issue of Asia Sourcing Flash summarizes the key findings of the Study, and in this issue we will take an in-depth look at what sourcing executives think about China, which saw its share in the US textile apparel import market continue to shrink, from 38.6% in 2015 to 36.8% in 2016 in value terms.

China’s unshakable position in textile and apparel sourcing

Although US fashion companies continue to seek low-cost alternatives to China, the country’s position as the top sourcing destination remains unchanged. According to the Study, 91% of fashion companies source from China, the most frequently used sourcing base. It is followed by Vietnam (88%), India (76%) and Indonesia (73%). But to our surprise, the percentage was not 100% for the first time since the Study began in 2014, signaling a decline in China’s overall attractiveness in textile and apparel sourcing and a shift in US fashion companies’ sourcing strategies.

Among its Asian competitors, China has remained a dominant supplier in many categories of textile and apparel products in the US (Figure 1). The Study shows that, for example, of the 106 categories of apparel, China was the top supplier for 88 categories.

The Study also reveals that China’s competitiveness is built on its enormous manufacturing capacity and overall supply chain efficiency. As one sourcing executive commented, “(Chinese factories) are the giant and will remain so for the foreseeable future. We will never be completely out of China due to their speed, ease of doing business. The only thing that could change that is a protectionist agenda.” Another respondent put it, “Speed to market is keeping China relevant in fashion apparel…China will remain competitive and continue to invest in technology to differentiate and compete.”

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Content provided by Fung Business Intelligence
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