Quitting China might be easier said than done, tariffs or no tariffs and Uyghur Forced Labor Prevention Act or no Uyghur Forced Labor Prevention Act.
Despite all chatter to the contrary, fashion companies are still dragging their feet when it comes to diversifying their supplier base, Sheng Lu, professor of fashion and apparel studies at the University of Delaware, said at the United States Fashion Industry Association’s Apparel Importers Trade & Transportation Conference in New York City last week.
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The proof is in the numbers, he said. In a tally of the top 10 suppliers of clothing products to the United States from January to October, China accounted for almost 61 percent of imports with nearly 62,000 SKUs. Its next-closest rivals—India and Vietnam—barely registered as challengers with only 15,000 SKUs apiece. Cambodia was a distant fourth with 3,500 SKUs and Bangladesh an even further fifth with less than 3,000.
The problem is that finding a sourcing locale that can offer the same breadth of products as China remains a lift so heavy that it’s proven nearly impossible to budge, Lu said. Buying from China isn’t so much about price anymore but capabilities. While the types of apparel made by what he dubbed the “Asia 5”—meaning Bangladesh, Cambodia, India, Indonesia and Vietnam—have ticked up over the past year, there are still holes in what they can offer. The Asia 5 can only fulfill 71 percent of the tops and 47 percent of the dresses that China supplies, for instance.
The balance of offerings has also shifted, albeit not only for China but Asia as a whole. In 2018, products from Asia predominantly served the value market. Today, nearly half of Chinese apparel imports to the United States are earmarked for the mass segment, 15 percent for premium and over 34 percent for luxury. “I think you see that it will take time for companies to find China’s alternative,” Lu said.
While India might eventually come close to approaching China’s potential with its more or less self-sufficient and vertical supply chain and similar breakdown of exports by market, the Western hemisphere provides little respite. El Salvador and Guatemala, Lu said, are mostly in the business of making tops—T-shirts, most of all. On the other hand, only 5 percent of China’s American imports between January to October were tees, even though tops themselves made up nearly 39 percent of its SKUs.