Trends & Development of Global Fashion Business

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(1)Trends & Development of Global Fashion Business Asian Textile Conference June 2007 Prof KW Yeung & Terry Tang Clothing Industry Training Authority Hong Kong. 1.

(2) Highlights . . Trends on Global Sourcing. Impacts on the Fashion Business . Sustainable Development A Global Gl b l Solution S l ti. Copyright © 2007 Clothing Industry Training Authority. 2.

(3) Highlight 1 Trends on Global Sourcing. Copyright © 2007 Clothing Industry Training Authority. 3.

(4) Trends on Global Sourcing Ch Changing i M Mandatory d t R Requirements i t •. The elimination of quotas on trade between WTO members from 1 Jan 2005 was the central issue in the global apparel industry.. •. Options open to the US and EU to fight against large imports: antianti-dumping and safeguard measures under d WTO’s WTO’ accession i treaty.. •. Many buyers will err on the side of caution by placing orders with a variety of supplying countries.. Copyright © 2007 Clothing Industry Training Authority. 4.

(5) Trends on Global Sourcing Changing Mandatory Requirements • Effect 1 June 2007, the EU REACH* Regulation requires importers and manufacturers of chemicals to provide health and safety data for some 30,000 substances currently used in daily products. • The products range from plastics used in computers and mobile phones to substances used in textiles, paints, furniture, toys and cleaning p products. (* REACH is the abbreviation of Registration, Evaluation, Authorization of Chemicals.). Copyright © 2007 Clothing Industry Training Authority. 5.

(6) Trends on Global Sourcing Various Voluntary Standards •. Consumer g goods industries are facing g increasing challenges due to compliance standards raised by major US and EU buyers.. •. The compliance standards may be attributable to ethical or environmental concerns in the lifelife-cycle of raw material extraction, manufacturing, distribution, purchasing consumption / usage, purchasing, usage disposal, disposal and recycling.. Copyright © 2007 Clothing Industry Training Authority. 6.

(7) Trends on Global Sourcing Voluntary Ethical Standards, e.g.. SA 8000 (Social Accountability International). WRAP (Worldwide Responsible Apparel Production). BSCI (Business Social Compliance Initiative). Copyright © 2007 Clothing Industry Training Authority. 7.

(8) Trends on Global Sourcing Voluntary Environmental Standards, e.g.. EU Flower. Ök T / O Öko-Tex Oeko-Tex k T St Standards d d. Green Seal (US). Copyright © 2007 Clothing Industry Training Authority. 8.

(9) Trends on Global Sourcing Higher Stakeholders Influences •. Consumers are increasingly g y aware of ethics and green issues which are emerging as the main concerns behind the purchasing h decisions. d. •. Activist pressure groups and other stakeholders are pushing companies for greater balance between profitability and social responsibility. responsibility. Copyright © 2007 Clothing Industry Training Authority. 9.

(10) Trends on Global Sourcing Brand and Retailer Responses •. Most retailers now accept p ethical issues concerning how products are made, and must have a proper balance between retailers and d demands d from f consumers and d pressure groups.. •. Retailers need to ensure all key raw materials must come from the most sustainable source possible, and are committed to improving the livelihood of people in the supply chain. chain. Copyright © 2007 Clothing Industry Training Authority. 10.

(11) Highlight 2 Impacts on the Fashion Business. Copyright © 2007 Clothing Industry Training Authority. 11.

(12) I Impacts t on th the F Fashion hi B Business i Brands and Suppliers •. In the new q quota-free era,, companies quotap will select only suppliers who can provide real value to customers.. •. Trade deals to a developing country which is able to satisfy its buyers in other ways such as reducing product cost, legal and ethical compliance, shortening lead times, increasing flexibility, flexibility quality, quality and logistics. logistics. Copyright © 2007 Clothing Industry Training Authority. 12.

(13) I Impacts t on th the F Fashion hi B Business i Brands and Suppliers •. The longlong g-term p partnerships p have to be built on openness and trust, with each partner recognizing, agreeing and f focusing i on its i strengths. h. •. Brands tend to bring in the market, product knowledge and technological know how, while suppliers provide local knowledge management and a skilled knowledge, workforce.. Copyright © 2007 Clothing Industry Training Authority. 13.

(14) I Impacts t on th the F Fashion hi B Business i B Brands d and dS Suppliers li •. Suppliers pp must be able to provide p quality q y product and service, including compliance with mandatory and voluntary requirements.. •. Only the factories offering good working and living conditions and support their customers will attract brands that are serious about compliance issues.. Copyright © 2007 Clothing Industry Training Authority. 14.

(15) Impacts on the Fashion Business Ethical / Fair Trading •. More and more brands and retailers have set or will set policies on ethical trading and fair trade.. •. E.g. five 'Mega Retailers‘ (Wal(Wal-Mart, Carrefour, Tesco and Metro, together with Migros) are putting together the Global Social Compliance Programme as one buyers' common code code.. Copyright © 2007 Clothing Industry Training Authority. 15.

(16) Impacts on the Fashion Business Ethical / Fair Trading •. Understanding g the social relation will be the total integration of ethics and environment as part of “Holistic Management Strategy”, ” and d not just a conceived “Business Strategy”.. •. Many brands have taken a lead in the areas of stakeholder engagement and transparency reporting reporting.. Copyright © 2007 Clothing Industry Training Authority. 16.

(17) Impacts on the h Fashion h Business Clothes Miles •. Consumers express concern about the global warming impact of transporting clothes around the world.. •. Transport accounted for 6% of the gy used in p producing g a viscose energy blouse in India for the European market.. Copyright © 2007 Clothing Industry Training Authority. 17.

(18) Impacts on the Fashion Business Clothes Miles •. A surveyy indicated that buying y g and using g the TT-shirt was one kind of big energy consumption: going to the shop, washing the h shirt h and d ironing it used d nearly l ten times as much as transport. (Source: http://www.justhttp://www.just-style.com). Copyright © 2007 Clothing Industry Training Authority. 18.

(19) Impacts on the h Fashion h Business Clothes Miles •. Over the next few years years, retailers tend to become carbon neutral, stop sending waste to landfill,, overhaul its supply pp y chain to limit environmental impact, enhance its ethical trading initiatives and educate customers on healthy h lth and d green living. li i. Copyright © 2007 Clothing Industry Training Authority. 19.

(20) Impacts on the Fashion Business Eco-friendly Manufacturing •. Some brands increase use of organic cotton or by--product of agricultural products. This will by contribute not only to improving the negative impact of conventional cotton farming, but also to supporting the fair trade policies with developing countries. countries. Copyright © 2007 Clothing Industry Training Authority. 20.

(21) Impacts on the Fashion Business E Eco-friendly f i dl M Manufacturing f t i •. E.g., much of Marks & Spencer’s polyester clothing will be made from recycled plastic bottles instead of oil, and every year it will sell over 20 million garments made from fair--trade cotton. fair. Copyright © 2007 Clothing Industry Training Authority. 21.

(22) Impacts on the Fashion Business Eco-friendly Manufacturing •. The laundering of clothing represents 75% of the total energy used during the lifecycle of a garment, and thus low temperature washing and easy care garments will be the key.. •. Reducing washing temperatures from 40ºC to 30ºC may provide a 30% energy saving. (Source: http://www.justhttp://www.just-style.com). Copyright © 2007 Clothing Industry Training Authority. 22.

(23) Highlight 3 Sustainable Susta ab e Development e e op e t – A Global Solution. Copyright © 2007 Clothing Industry Training Authority. 23.

(24) S t i bl Development Sustainable D l t ¾ Corporate C. Governance G –. Companies should establish company policies, values and ethics to align with global business code. code.. ¾ Stakeholder. Engagement –. Companies should be initiative in influencing employees, business partners, suppliers and customers by adopting best practice.. Copyright © 2007 Clothing Industry Training Authority. 24.

(25) S t i bl D Sustainable Development l t ¾ Economic. Development –. Companies should support country economic development by paying fair wages, and improving working and living g conditions. conditions co d t o s.. ¾ Community. Development –. Companies should commit to social development by recognizing employee’s l ’ rights i ht and d sharing h i off international business ethics.. Copyright © 2007 Clothing Industry Training Authority. 25.

(26) Sustainable Development C Can you see the h diff difference. Copyright © 2007 Clothing Industry Training Authority. 26.

(27) Sustainable Development C Can you see th the diff difference. Copyright © 2007 Clothing Industry Training Authority. 27.

(28) Sustainable Development G dP Good Practices ti. Copyright © 2007 Clothing Industry Training Authority. 28.

(29) Sustainable Development G dP Good Practices ti. Copyright © 2007 Clothing Industry Training Authority. 29.

(30) S t i bl D Sustainable Development l t ¾ Environment,. Focus –. Health & Safety. Companies should embed environment, health and safety principles in the production process and exportation of goods. goods. Copyright © 2007 Clothing Industry Training Authority. 30.




(34) S t i bl D Sustainable Development l t ¾ Manpower. Development –. Companies p should develop p onon-g going g training programs to build capacity on: z. streamlined production workflow. z. economic material planning. z. effective communication systems. z. effective ff ti outsourcing t i managementt. Copyright © 2007 Clothing Industry Training Authority. 34.

(35) Sustainable Growth for Higher Competitiveness ¾ More. Exporting Business Opportunity. d to due t hi higher h alignment li t with ith global l b l business norm and more acceptance by i t international ti l markets k t /b buyers.. ¾ Higher. Supply Chain Reliability due to. smaller production disruption and less potential costs incurred by nonnon-compliance.. Copyright © 2007 Clothing Industry Training Authority. 35.

(36) Sustainable Growth for Higher Competitiveness ¾ Higher Highe. P Productivity od cti it & Better Bette Q Quality alit of Work due to greater ability to attract. and retain good staff, higher staff satisfaction and motivation, empowered staff and increased initiative to improve.. Copyright © 2007 Clothing Industry Training Authority. 36.

(37) E d off P End Presentation i Thank you！ you！. Copyright © 2007 Clothing Industry Training Authority. 37.

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