China is currently maintaining its pre-eminent position in garment exports and is likely to retain the same in the foreseeable future. However, this may not continue for all times for the reason that the rising costs have started blunting its edge over its competitors. New research highlights Belarus, Ukraine, Moldova, Romania, Madagascar, Tunisia, and Morocco as attractive sourcing alternatives.

This may be the final year the Chinese apparel sourcing sector gains market share, according to Anne-Laure Linget, international development manager at the French Knitting and Lingerie Federation. However, while its rapid growth phase may now be over, the gap between China and the rest of the world remains massive, with some 43.8% of products sourced for the European Union coming from China in 2011. By contrast, its nearest competitor supplying the EU is Turkey, which accounted for just 12.2% of the market last year. Research by the French Knitting and Lingerie Federation, which was commissioned by the Fast Fashion London sourcing fair, found that after 20 years of relative stability - excluding last year's cotton price spikes - production costs are set to continue to rise, up 2-5% a year, particularly in Asia.

Linget, a co-author of the 'Worldwide Sourcing Study,' says these issues are set to continue, making China an increasingly difficult sourcing hub. Added to this, "People prefer to work for Apple," Linget explains, describing the higher wages and better working conditions offered by companies producing components for the electronics giant.

New Emerging Alternatives

However, wage increases have not hit every market, and there are now many attractive alternatives to China, which offer lower wages and are closer to brands' markets allowing them to save on shipping and work on a fast fashion basis. According to Linget, Belarus, Ukraine, Moldova, Romania, Madagascar, Tunisia, and Morocco are all markets that should be considered as sourcing locations. This is what the French Knitting and Lingerie Federation has to say:

Let us, first of all take up the countries that formerly made up Soviet Union. In case of Belarus, in 2011, the average monthly salary for textile workers was approximately EUR190 for sewing production and EUR220 for textile production. The country is a good sourcing option for suits, jackets, coats, shirts, light clothes and baby knitwear. Linget describes it as one of the key textile countries among ex-soviet states, with well-equipped factories and a low cost and skilled labour force. On the flip side, work is mainly done on a CMT basis due to the lack of quality raw materials, there is a lack of flexibility in some mills, and the country is subject to custom duties of 20% into the EU, and is struggling with price increases in mass market clothing production.


Another country, Ukrain offers average monthly salaries in the textile industry of about EUR150 a month. It is considered a good sourcing option for women's ready-to-wear, high-end outerwear, men's and women's suits, shirts, evening gowns and wedding dresses. Linget says the country has a strong sewing tradition, with well-equipped factories, and a number of small workshops. Negatives include the limited specialisation of the country's factories, with no jeans or high quality corsetry production available in the country.


Average salaries in Romania are EUR 280 a month in clothing production and EUR 360 in the textile industry. It is a good sourcing option for women's ready-to-wear, high-end outerwear, men's and women's suits, shirts, knitted clothing and lingerie. Reasons to source from Romania include a lack of customs duties and barriers, well-equipped factories, good French and English skills, combined with a low cost and quality labour force. Issues faced in the country include rising salaries in the textile industry and increasing prices.


In Moldova, the average monthly salary in the textile and apparel industry is EUR 170 per month. The country specialises in producing fabrics, knitted clothing, footwear and leather goods. It features qualified and skilled workers, a high level of technical capacity, a good reputation and free trade agreements with Romania. There is also a short delivery time to EU and CIS countries. On the negative side, the lack of raw materials means they must be supplied by the client, and workers' wages are rising in areas that border the EU.


While the minimum monthly salary in Madagascar is around EUR33 per month, the addition of overtime, incentives and some companies' social policies mean the average income for qualified workers is from EUR 43-53 per month. The country is a good sourcing option for children's wear, sportswear, lingerie, work clothes, sweaters and knitwear and jackets. It is not subject to Customs duties for the EU; there are no language barriers in French and English, and companies respect environmental and social standards, says Linget. However Madagascar faces a lack of flexibility and reactivity due to its geographical location, a lack of raw materials, and compulsory social benefits provided by companies increase costs.

Tunisia has annual minimum wages of EUR 2,350 (US$2,959). The country is the fifth biggest textile and clothing supplier to the EU, with strengths in jeans, sportswear, formal trousers, lingerie and bathing suits. It is able to offer a short delivery time of two-to-four weeks and offers flexibility and reactivity in restocking and replenishing. However, political instability has made many foreign investors leave the country. There is also a shortage of fabrics, energy and transport, while employers are obliged to offer social security and provide employees with transport.


Morocco's annual minimum wage is EUR 2,142 (US$2,696). The country's strengths are in women's wear, jeans, T-shirts, dresses, sweaters and lingerie. Its proximity to European markets offers it competitive advantages in transportation costs, pricing and services. However, there is a shortage of adequately trained and skilled labour, while sub-contracting and co-contracting is not yet well developed.


Another set of countries comprising Syria, Uzbekistan and Tajikistan may become increasingly important apparel sourcing countries in coming years once ongoing issues around political and human rights have been resolved. Anne-Laure Linget, international development manager at the French Knitting and Lingerie Federation, said the countries had the potential to become stronger near-sourcing locations for retailers and brands.


Despite its political instability, Syria is still exporting clothing. Between January and September 2011, the country saw a 61% increase in exports to the US against the same period of the previous year, albeit from a small base. According to the study, Syria was the 16th largest clothing exporter to the US between January and September 2011, with exports valued at EUR6.7m. "Arab countries will be good in two to three years when they become stable," Linget says.


Cotton producing countries like Tajikistan and Uzbekistan, despite issues around child and forced labour, could also become increasingly important for retailers, brands and importers seeking stable prices and availability. "Russian companies are already looking at Uzbekistan," she adds.


Highlighting the issues faced by manufacturers when India introduced another ban on cotton exports earlier this year, Linget says: "All cotton-producing bases will become strong sourcing countries; they will be able to continue delivering products through periods of flood or drought." However, countries like Bangladesh and Vietnam, which don't produce their own cotton, wouldn't be "able to deliver on time and on price," she says.


This article was originally published in the Stitch Times, July, 2012.