The main challenges that the businesses in the clothing manufacturing industry face

Top 5 Challenges in the fashion and apparel industry

The global clothing manufacturing industry has been on a steady growth for long now, being indicative of the continuous rise in demand for clothing and shoes all over the world. The total value of the apparel market is projected to reach $1.5 trillion by the end of this year. All categories of products in the apparel industry, such as menswear, womenswear, chilrenswear and sportswear, have grown in demand and market size in the last few years. The global apparel industry is expected to grow at a CAGR of 5.5% in the next five years. Factors starting from upsurge of pop-culture to globalization, are all contributing towards growth of demand in apparel products. Millennials are inclining towards luxury apparels and accessories, which is big news for the industry and as you read this article, millennials are about to become the largest living generation in the whole world.

Bangladesh is a big player in the landscape of the clothing manufacturing industry only being second to China. It is the highest revenue earning export-based sector for the country, and the source of livelihood for 4 million workers. In FY 2018-19, Bangladesh earned a total of $30 billion from exporting RMG, which is 84% of the country’s total export earnings.

However, the scenario is not as dreamy as it sounded so far and perhaps, we need to have a reality check at this point. The fashion industry is growing, but is it growing at its true potential? That’s a question you might want to ask yourself. Of course, there are challenges that the whole industry is facing and holding it back from maybe an even higher growth rate. The industry is doing well, but in the process, they have to overcome many challenges. Today we talk about those challenges that the fashion and apparel industry have to overcome to thrive.

So here are the top five challenges we see in the fashion and apparel industry:


1) Shift in Consumer Taste and Sentiment

One of the major challenges that the industry has to deal with is ever-changing customer sentiment. Apparel purchasing patterns and preferences of customers are greatly influenced by trends on social media, pop-culture, influencer culture and so on. The players in this industry have to vehemently keep a keen eye on the factors that influence customer taste and sentiment. Fashion has to be dynamic and current, keeping up with the tastes of the consumers.

Moreover, there are other sentiments that have to be taken care of. There are different priorities and preferences that vary among demographic groups. The brands have to work in accordance to the preferences of the targeted segments for their product. From different consumer surveys, the importance of different factors that drive the purchase behaviors are found different for different demographic groups. This is one challenge that is to be overcome in order to hit the accelerator.

Source: Mintel Analytics- Consumer Expectations of Companies

2) Difficulty in Procurement

The increasingly high cost in procuring raw materials for production is one of the major challenges that the fashion industry faces. The cost of sourcing has been on the rise for long now in this industry, gradually squeezing the margin for manufacturers and making their lives difficult. The rate at which the cost is increasing, it will soon cover up larger margins of revenue and leave nothing for the manufacturers.

However, the advent of technology is showing real promise for the procurement department. The problem can be minimized by enabling the recycle of fabrics, which can be an alternative for the current mode of sourcing. The use of technology and enabling automation can be a real game changer for the fashion industry.

3) Ensuring Sustainability

One very important issue to be dealt by the industry in the 21st century is the importance of sustainability. The fashion industry is leaving footprints on the environment that questions sustainability. The industry is the second largest polluter of the environment, only second to the oil industry. 20% of the world’s industrial water pollution is caused by textile treatments and dyeing. The extravagant use of water in the manufacturing process of fabrics is another concern. Every year 1.5 trillion litres of water is used by the fashion industry. On top of these, chemical pollution and waste accumulation are sustainability issues that are caused by the industry.

These issues are very critical given the current scenario of the world. In this situation, the manufacturers need to shift towards recycling more. Only 15% of the fabrics are recycled as of now, which is to be pushed up by manifold. Sustainability is also one of the factors that drive the consumer sentiments, especially of the millennial customers. So, from that point of view as well, ensuring sustainability is a challenge that cannot be bypassed.

4) Infrastructural Shortcomings

For ensuring profitable operations, all fashion houses need to keep their logistics on their toes. The infrastructural shortcomings are some major problems that are holding the progress back. Especially in the case of developing nations like Bangladesh, poor infrastructure is a big problem. The difficulties in transporting raw materials and finished goods, and the increasing costs of logistics is making things difficult for the fashion brands and manufacturers. Bangladeshi manufacturers face problems due to the absence of a deep sea-port in the country. The nearest deep sea-port available for use is in Singapore, which is 1866 nautical miles away from the port of Chittagong. Regardless of the size of the businesses, the infrastructural shortcomings are challenges to be overcome to sustain in the industry profitably.

5) Labor Management:

Labor is the last challenge of our five that the fashion industry faces. Considering the manufacturing overhead, the cost of labor is a huge problem for the industry. As a result, the manufacturing hub of the industry is massively shifted eastward due to the abundance of cheap labor in countries like Bangladesh and China. However, even in these countries, the working conditions, pay, and worker sentiment are issues to be managed by the industry. Poor labor management can create massive negative emotions about a brand, which can take a serious toll on goodwill and profitability.

Although there are many more challenges that the fashion and apparel industry have to overcome, these five are deemed to be of the most critical ones. If you are doing business in the industry, you definitely want to take care of these issues before they become a tumor on your business’s profitability.