Fashion companies in the United States are diversifying their sourcing base beyond China, Vietnam, and Bangladesh to mitigate the rising geopolitical risks, but the companies are not necessarily leaving Asia, according to a global study.
The 鈥�2024 fashion industry benchmarking study鈥� report says that while Asia remains the dominant apparel sourcing base, the leading suppliers within Asia are gradually shifting.
The study shows that that seven of the top ten most utilised apparel sourcing destinations among respondents in 2024 are Asia-based, but the order of these top Asian suppliers has changed.
The findings of the survey鈥檚 eleventh edition, jointly conducted by the United States Fashion Industry Association and the University of Delaware, were released on Monday.
The study was conducted in the current year from April to June,听 and included executives from 30 leading fashion brands, retailers, importers and wholesalers, including some of the largest brands and retailers in the US.
It showed that while China (100 per cent utilisation rate) and Vietnam (89 per cent utilisation rate) were still leading, for the first time since the US Fashion Industry Association conducted the survey more respondents reported sourcing from India (89 per cent utilisation rate, ranked 2nd in 2024 against 4th in 2023) than from Bangladesh (86 per cent utilisation rate, ranked 4th in 2024 against 3rd in 2023).
Additionally, a higher percentage of respondents sourced from Cambodia (75 per cent utilisation rate), Indonesia (75 per cent utilisation rate), and Pakistan (61 per cent utilisation rate) this year, the report said.
The study revealed that about 48 per cent of respondents expressed an interest in expanding apparel sourcing from Bangladesh over the next two years, down from 52 per cent in 2023 and 58 per cent in 2022.
The high social compliance risks involved in sourcing from Bangladesh remained a key concern for respondents.
鈥楩or example, the high-profile labour protests over the minimum wage increase in late 2023 brought Bangladesh鈥檚 social responsibility record in the garment sector back into the news headlines,鈥� the report read.
Although as an apparel-sourcing base, Bangladesh was well-known for its price competitiveness, its export potential had been constrained by its limited product diversification beyond basic cotton items and knitwear, the study observed.
The report said that regarding Asia-based suppliers, India emerged as the most popular sourcing destination in 2024, with nearly 60 per cent of respondents planning to expand sourcing from the country through 2026.
Reflecting its growth potential as a leading sourcing destination for the US fashion companies, India was the world鈥檚 third-largest textile exporter and the sixth largest for apparel in 2022 measured in value.
Other studies show that by leveraging its more advanced local textile manufacturing capability, India鈥檚 apparel exports to the United States relied much less on imported components than economically less developed countries such as Bangladesh, Cambodia and Vietnam.
Additionally, as India is elevated as a strategic partner with the United States, sourcing from there is perceived as involving relatively lower geopolitical risks, the report mentioned.
The report also showed that Bangladesh still remained as the topmost competitive country in terms of product prices with score 4 among apparel manufacturing countries in the world.
It showed that the average rating for Vietnam on price-competitiveness is 3.5.
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