Clothing and fashion exports to the US on the rise
The latest figures from the US Department of Commerce Office of Textiles and Apparel (OTEXA) show the volume of US clothing and fashion imports from all sources grew 4.8% year-on-year in September 2015.
Though down from the 13.5% increase reported for August 2015, imports continued their upward trajectory reaching 2.69 billion square metre equivalents (SME), up from 2.56 billion SME for September of 2014, which is good news for the Vietnam apparel and textile industries.
Despite rising wages and strong currency, China continues to be the largest exporter to the US, as no country can match China in terms of the size of its supply base, range of skills, quality levels, product variety and the completeness of its supply chain.
However, keeping the potential Trans Pacific Partnership (TPP) benefits in mind, should the trade accord materialize, Vietnam’s clothing and textiles industries are increasingly receiving encouraging responses from the western buyers.
Breaking the OTEXA figures down further, shipments from China – the largest supplier of apparel to the US – were up 1.48% to 1.32 billion SME, while nearest rival Vietnam grew at a much faster rate, jumping 10.6% to 281 million SME, compared to September 2014.
Vietnam is clearly benefiting as transnational and domestic producers alike operating within the country’s borders are diversifying their supply chains in a bid to position themselves to take advantage of the opportunities the TPP might open for them.
China anticipating the after-effect of the TPP has already started moving large volume of its investments to Vietnam to boost its garment sector and take advantage of the TPP, should the trade pact become a reality.
At a recent meeting reviewing the results of operations for 2015, the Thai Binh Group (TBS) unveiled plans to increase exports to the US to a new high of 30 million pairs of shoes and 14 million bags.
The TBS group has also increased the production of handbags it makes under the Coach brand.
Coach is a luxury fashion company headquartered in New York City. The company is principally known for accessories and gifts for women and men, including handbags, men's bags, women's and men's small leather goods, footwear and outerwear as well as other fashion accessories.
Over the past year, TBS’s export growth to the US market has surged 18% higher than the average growth rate of other Vietnamese goods into the market spiking to 23 million pairs of shoes and 11.5 million of handbags in 2015.
Nam Long Co, Ltd, which specializes in producing rubber gloves, reports it has just expanded production to an all-time high of 10 million pairs of gloves annually in anticipation of increased demand from the market.
Meanwhile, Le Quang Hung, general director of the Saigon Production and Trade Joint Stock Company (Garmex Sai Gon) said the rate of garment orders by his company from the US market has spiked by 60%.
The US market has captured renewed attention from transnational and domestic businesses operating in Vietnam as the US economy is generally perceived as having started to bounce back following several years of stagnation.
Many leading economists have predicted the US economy is predicted to grow at between 2.2% and 3% in 2015 and at an average of 3% as of 2016, which if true, bodes well for domestic consumption and imports of clothing and fashion items produced in Vietnam.