Textile exports to the US have many changes

In 2016, the textile and garment export market to the US will have many changes. This comes from the change in American consumer tastes, which is no longer the habit of buying in stock or buying long in advance, they only buy goods when the season is near. This new consumer trend requires Vietnamese enterprises to shorten the time of receiving contracts and delivering goods if they want to retain American customers.

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According to statistics from the Vietnam Textile and Apparel Association (Vitas), textile and garment export turnover in 2015 was approximately 27 billion USD. Of which, the export turnover of the garment industry accounted for 85% of the revenue structure. However, 30% of foreign-invested enterprises accounted for 70% of revenue, while 70% of Vietnamese enterprises accounted for only 30% (around 8 billion USD). Of which, 85% of Vietnamese enterprises still implemented the processing method, so the actual turnover was only around 2 billion USD; because the processing price only accounted for about 25% of the product cost. In other words, more than 6 billion USD fell into the pockets of foreign companies delivering processed goods. On the other hand, based on current input costs, processing enterprises earned an average profit of 2%/revenue. Therefore, the budget contribution was only around 200 billion VND. This shows that, although the garment industry's turnover in 2015 was high, the actual profits obtained were very low.

This actual revenue will be at risk of decreasing in the coming time when the trend of changing short-term consumer tastes is dominating the textile and garment export market. Mr. Chris Griffin, President of Sourcing at Magic (a US fair organizer and market research unit), emphasized that unlike in the past, American consumers often had the habit of buying goods in advance to wait for the season, but now they have changed by buying near the season to match the fashion and the weather better. Accordingly, distributors will also shorten the order placement time from 120 days to 30 - 60 days. Large orders will decrease, on the contrary, orders with small quantities but diverse designs will increase. If only relying on the current simple processing production form, if Vietnamese enterprises do not convert in time, I am afraid that it will be difficult to meet the requirements of these new types of orders. Not to mention, Vietnamese enterprises must also change to adapt to standards related to environmental responsibility and labor safety that are being tightened by the US government to increase technical barriers and limit imported products from other countries.

On the Government side, direct relevant agencies to compile statistics and analyze the structure of export products, thereby synthesizing and forecasting the demand for raw materials by type to serve as a basis for planning the structure of supporting product production. This is the basis for planning technology investment, product strategy, and optimal exploitation of equipment and technology capacity. In other words, investment in supporting industries will "sell what the garment industry needs, not what they have" on the basis of connecting supply and demand - an important basis for Vietnamese products to have competitive prices.

It is necessary to implement synchronous policies such as credit support to purchase raw materials produced in Vietnam; support investment in systems that comply with social responsibility; stimulate investment in specialized equipment; support training of business and technical human resources; promote and develop direct customers; have policies to encourage experienced enterprises to participate in conversion support services, such as sample development; invest in training a team of professional design human resources... Converting business methods not only increases surplus value but also acts as a driving force for the development of supporting industries.

According to SGGP online