Han Bekke, president of the International Apparel Federation (IAF), thinks Pakistan’s apparel manufacturers must invest in product development, fashion education and creativity to build their own brands to boost exports and compete with other countries in global markets.
“Whether you want to remain a source of low-cost (textile) products (for the rest of the world) or add value (to your exports), the choice is yours,” Mr Bekke, who was in Sialkot last week to inaugurate the IAF’s first regional office anywhere in the world, told Dawn in an interview.
“So you have got to be very competitive and you have to be unique… nobody is waiting for you. Go to Brussels, London, Paris… go to any fashion fair in the world, there are so many companies; there is so much on offer in the world.
“You got to be unique — unique and competitive. Your companies need to decide in which direction they want to go and what business strategies they want to implement.”
“Look at Hong Kong. It was for several years a low-cost hub (of apparel for the world). Hong Kong invested in fashion and they have strong brands now.
“Take the example of Turkey, a low-wage country for Europe until not very long ago. They changed the whole system in the country and invested heavily in creativity, and product and design development. Now they have so many strong (global) brands,” the IAF president argued.
“I don’t know the answer. Ask companies. Probably they ignored what happened globally,” Mr Bekke responded when asked if he could explain the factors that might have hampered Pakistan’s apparel industry and export growth.
But he added: “It’s about cooperation in the supply chain; it’s always about cooperation in the supply chain. For this you have to set up partnerships (in the supply chain) downstream and upstream. That’s the only way out. Otherwise you’ll just be ruled out of the competition.
“What Pakistani textile and apparel manufacturers need to realise is that they are already in the global market where they have to compete with other countries. So the question is whether they want to stay as a source of cheaper products or start making use of their creative powers and skills.”
‘What Pakistani textile and apparel manufacturers need to realise is that they are already in the global market. So the question is whether they want to stay as a source of cheaper products or start making use of their creative powers and skills,’ says Han Bekke
Founded in 1972, the IAF is the only international platform for business contacts in the apparel industry of its over 40 member-nations.
The Pakistan Readymade Garments Manufacturers Association (PRGMEA) has been a member of the federation for the last seven years and its chairman, Ijaz Khokhar, persuaded the IAF board to open their first regional office in Sialkot to officially start a pilot project to expand their presence to other member countries in future.
Currently, the IAF and PRGMEA are discussing creating three ‘desks’ within the IAF’s Pakistan office: a ‘market entry desk’ with information on product legislation, trade rules and market entry strategy; a ‘member benefits desk’, providing access to global discounts on services; and a ‘trade fair desk’, helping companies to enter major trade fairs across the world.
“The establishment of the IAF’s regional office will help us access its technical expertise and knowledge of fashion industry. That’ll help us develop new technical and functional fabrics, products and markets for our value-added textile industry under its umbrella and convert our entire cotton produce into value-added goods (for export markets),” chipped in Mr Khokhar.
Speaking about global developments affecting international apparel trade, Bekke pointed out that globalisation of apparel manufacturing, stimulated by the liberalisation of trade in textiles and clothing in 2005, has intensified competition in the textile-apparel pipeline.
“In certain parts of the apparel world it puts heavy pressure on existing market structures. At the same time new market opportunities are ahead of us. Creativity, design, new materials, research, information technology, cooperation in the demand chain are just a few key words to underline the possibilities companies have to be competitive and to gain market share.”
According to him, since 2009 the global apparel market has been experiencing a slowdown in growth to some two to three per cent a year.
“The year 2016 was a tough one according to the first global fashion survey by McKinsey and website Business of Fashion. The year was summarised in three words: uncertain, changing and challenging, which is not a good business environment for entrepreneurs.”
But he was worried about geopolitical tensions, polarisation and populism in a growing number of countries. “This could easily lead to protectionism and import duties and hence not only affect world clothing exports but also the position of many companies and workers worldwide.
“This might have a negative influence on international trade in apparel and textiles. Brands and retailers might start to change their sourcing in anticipation of higher import duties that may never come. In this way uncertainty will equal waste of resources.”
He was of the view that the emerging situation could lead to a race to the bottom where “one could question whether this is profitable at the end and whether it will improve the living and working conditions of workers in low wage countries. Or it could shift focus from price to focus on quality, more value for money, sustainability and speed to market.”
Meanwhile, Bekke said, consumer behaviour continues to change, stimulated by new technologies. “Consumers have become more demanding, more discerning and less predictable. This is challenging for companies in our sector who have to reconsider their business models.
“Speed to market is the key. Innovation is needed next to a sustainability approach. But there are also positive signs. The world economy will grow this year with approximately 3.5pc.
“Pakistan was, is and will be a major exporter of garments. In 2016 it was in the top 10 of the largest garment exporters in the world and in the top 10 largest suppliers of garments to the EU market. This is a good position and considering the country’s population, there is even potential to grow.”
Published in Dawn, The Business and Finance Weekly, October 3rd, 2017