Bangladesh remains the most competitive globally in product prices among apparel manufacturing nations, while price competitiveness of Vietnam fell this year, according to the ‘2023 Fashion Industry Benchmarking Study’ conducted by the United States Fashion Industry Association (USFIA).
The rating of Bangladesh regarding social and labour compliance increased to 2.5 in 2023 from 2 in 2022 due to collaborative efforts of various stakeholders to enhance social responsibility practices in the Bangladeshi garment industry since the Rana Plaza tragedy, it noted.
Highlighting the growing social and labour compliance risks associated with sourcing from China, Vietnam and Cambodia, the report found that the same associated with sourcing from Bangladesh have fallen in the last two years, despite lingering concerns.
Asia’s position as the dominant apparel sourcing base for US fashion companies, however, remains unchanged. Seven out of the top ten most-utilised sourcing destinations this year are Asia-based, led by China (97 per cent), Vietnam (97 per cent), Bangladesh (83 per cent) and India (76 per cent), the report showed.
The survey interviewed 30 executives at leading US fashion companies from April to June last year.
The average price-competitiveness rating for Vietnam fell from 3.8 to 3.5 this year. Compared with last year, respondents rated Vietnam as less price-competitive as an apparel sourcing base due to inflation and wage increases in the country, the report said.
China and Vietnam were rated as the most competitive in sourcing flexibility and agility this year as the lifting of COVID restrictions in these two nations has significantly reduced supply chain disruptions and facilitated smooth movement of goods.
Several supplying nations, including India, Vietnam, Bangladesh, Sri Lanka and members of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), received improved ratings regarding their sourcing flexibility and agility performance.
Several respondents expressed concerns over potential links of products of China and Vietnam to forced labour in the Xinjiang Uyghur Autonomous Region.
“The US fashion companies are deeply concerned about deteriorating US-China bilateral relationship and plan to accelerate ‘reducing China exposure’ to mitigate the risks,” the study report said.
US fashion firms are actively exploring new sourcing capacities and opportunities outside China and they have plan to increase sourcing from Vietnam, Bangladesh and India over the next two years, it said.
Fashion companies generally distribute their sourcing orders evenly among Vietnam, Bangladesh and other countries in Asia, the study added.
News Source : www.fibr2fashion.com