SEARCH

Garment exporters: Know your customer

print   ·  

Sudhanshu Ranade

Chennai, May 7

MORE than 75 five per cent of garment exports into the US are made by retailers rather than `middlemen'. Typically these retailers (i.e., supermarket chains or shopping malls) replenish the stocks in all the stores under their control on a weekly basis, according to an in-depth study carried out a few months ago by a World Trade Organization (WTO) staffer.

Point of sales data are extracted (through a fully automated process made possible by the extensive use of bar codes at point of sale) and analysed over the weekend and replenishment orders placed with the manufacturer on Monday morning.

The manufacturer in China, Mexico or wherever is typically required to fill the order within a week, which means that he must always carry larger inventories of finished goods than the retailer.

The larger the fluctuations in demand and the larger the number of varieties (in terms of style, colour, size etc), the larger the inventory has to be. Not only this, the retailer in the US has a further advantage inasmuch as "the variation of aggregate demand from a larger number of consumers is less than the variation over time from a few customers"!

An item-wise break-up is now available for textile and apparel imports into the US in January 2005, the first full month after the lifting of quotas.

The figures for `textiles and fabrics' for both India and China are relatively small ($20 million and $65 million, respectively), and show a drop over January 2004 levels of 9.5 per cent and two per cent, respectively. `Textile mill products' are more important. In this category, Indian imports into the US in January 2005 were $127 million, up 7.8 per cent since January 2004. China recorded a growth of 12.9 per cent with January 2005 imports into the US reaching $420 million.

In other words, the already large difference got further widened after the lifting of quotas.

It is, however, the third and last category, `apparel and accessories', where most of the action is centered.

January 2005 imports from India in this category stood at $205 million, about 58 per cent of imports in the three categories combined, and up 8.7 per cent over January 2004 levels.

China had 74 per cent of its eggs in this basket in January 2005, when it reached the figure of $1.4 billion in a single month; up 33.6 per cent since January 2004, and equal to about a third of the total imports under this category from the rest of the world put together.

(This article was published in the Business Line print edition dated May 8, 2005)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.

O
P
E
N

close

Recent Article in Today's Paper

Malé airport: GMR wants $803 m from Maldives

Claims damagesfor wrongful termination of agreement »

Comments to: web.businessline@thehindu.co.in. Copyright © 2014, The Hindu Business Line.