Textiles and garment industry is the key to the growth of any developing country. It provides employment opportunities to its citizens and brings revenue to the country through the medium of exports. Developed countries prefer to import textiles and ready-made garments rather than producing them in-house since it proves to be cheaper to them. Textiles and ready-made garments are different from bespoke or designer collections; they are not tailor-made and often prove to be inexpensive in comparison to the latter. They can be produced in bulk for large-scale consumption. The ready-made garment industry, in particular, proves to be profit-bearing for an economy.
Industries for manufacturing ready-made garments came up in the 1950s in Europe and the United States. It spread to other parts of the world gradually, and Asia has become the center of the world in this regard at present. Since the developed countries were poor in terms of natural resources, they could not progress to a considerable extent in these areas. But the knowledge concerning this spread through many developing Asian and African countries, and they were able to secure income out of the same. Tunisia has developed a strong hold over the swimwear and lingerie sector in the ready-made garments industry, while Morocco leads the other African countries in women's wear ready-made garments. Exports of these products earn the economies revenue.
This industry has contributed immensely to many growing Asian economies. This sector in Bangladesh remained successful in exporting products worth $19.3 billion during the period from July 2012 to May 2013. It was a growth of around 12 percent as compared to the respective period last year. Similarly, Pakistan, one of the neighboring countries of Bangladesh, also has an impressive ready-made garments industry. The country exported ready-made garments worth $1.2 billion during the period July 2012 to March 2013 as compared to $1 billion in the period July 2011 to March 2012. This sector has led to revenue generation through the medium of exports for many other Asian countries as well.
Ready-made garments contribute immensely to other developing economies as well. Almost 35 percent of the total exports in Brazil constitute ready-made garments. The country's production has increased by 5.33 percent on a year-on-year basis, and a considerable part of it is exported. Swimwear is exported in large numbers from Brazil. African countries export ready-made garments in large numbers to the USA under the African Growth and Opportunities Act (AGOA). Around 99 percent of exports from Lesotho were of apparel and textiles, and 98 percent out of it fell in the 'AGOA' category. Ready-made garments constituted a large chunk of it, as the country has limited means for textile production. Such exports are beneficial for the overall economy.
Developed countries prove to be the export market for these countries the majority of the time. USA, Europe, Australia, and Japan import ready-made garments from these countries, since it proves cheaper to them as compared to manufacturing them in-house. Ready-made garments worth around $27 billion are imported by Japan every.
year on an average. Europe is a major importer of ready-made garments with majority of it being imported from Asia. Nepal exported around 46 percent of its ready-made garments to Europe in the last two years, and France is its biggest market, followed by UK and Germany. USA imports ready-made garments immensely from African countries, and also offers subsidies to exporters.
It has been noticed that ready-made garments industry, overall, is a full-fledged industry. But exact statistics are hard to be obtained, because a large part of this industry is unorganized, especially in the developing countries. This industry is growing at a rate of around 20 percent year-on-year in India. But its exact size is hard to determine, because of the huge unorganized sector. This sector offers competition to the organized sector with regards to price and quality. Majority of the dealings are unrecorded, and majority of the production is done through power looms. Unorganized sector apparel retailing prevails in almost all parts of Asia, Africa, and South America. It is prevalent in North America and Europe as well, but in a limited number.
There is a huge difference between the prices of ready-made garments imported from other countries, and the prices of ready-made garments manufactured with raw materials produced in the country. It leaves immense room for bargaining in the sector, especially in the unorganized sector. Ready-made garments sold in thrift shops and with street side vendors can be availed for almost half the Maximum Retail Price (MRP). It is easy to find consumers haggling for lower prices in apparels and ready-made garments on the streets of commercial areas of developing countries. For example, one can easily find bargainers in a western style shop for ready-made garments in Israel. This might not be allowed in shopping malls or supermarkets though.
Apart from haphazard price distribution, there are certain other factors which can be called the cons of the ready-made garment industry. Labor unrest, especially in developing countries, is a major barrier to the growth of this industry. Strikes and protests for wage increments are usual in this industry. This affects the overall productivity of the industry, ultimately leading to wastage of time and resources. It is the most prevalent in Bangladesh and other South Asian countries. But despite the loss incurred in such ways, this industry has been able to sufficiently meet up to the requirements of the global market.
Readymade garment industry can be divided into five segments menswear, women's wear, kid's wear, unisex, and uniform. Women's wear has always remained the most profit reaping market, but menswear and kid's wear markets are also picking up pace in recent times. In some countries, the menswear segment in ready-made garments outweighs women's wear. For example, menswear segment in India constitutes of around 41.4 percent of the total industry, while women's wear constitutes of around 34.4 percent only. Kid's wear constitutes of around 24.2 percent of the total industry in the country. The menswear segment is expected to get a further boost, and to become around US$ 28, 650 million by 2020.
This industry has helped in generating job opportunities in many developing countries. Around 7 million people are employed by this industry in India, and with an investment of around Rs. 1, 00,000 around 7 jobs are created on an average in the
country. Around 4 million people are employed in the ready-made garment industry of Bangladesh as till 2013. Women workers are employed in large-scale in this industry. It has created employment opportunities in many developing nations of Africa, as well.
The global ready-made garment industry is vast, and beneficial for the economies in many ways, especially in its initial stages. It has varied features, and pros and cons. But its cons are neatly cut by its outweighing pros. It has helped in earning foreign exchange and in generating employment opportunities in the developing nations. It helps in pushing the economy forward, and is the road to development. It happens, many times, that the focus of developing countries shifts from ready-made garments to more profit bearing industries in the long run. They become importers of ready-made garments after a span of time. But it cannot be denied that ready-made garments have a huge contribution to make in the development of any country.
References:
1. Un.org
2. Tribune.com.pk
3. Wikipedia.org
4. Agoa.info
5. Bangladesheconomy.wordpress.com
6. Nepalnews.com
7. Dnb.co.in
8. Industrialcompliance.wikispaces.com
9. Angermann.de
10. Kshitij.com
11. Lemag.ma
12. Dnb.co.in
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