China textile and apparel sourcing down but not out
While China continues to hold the crown for global sourcing, its dominance is noticeablyess dramatic compared to previous years - particularly in the textile and appareindustry, a new survev has found.
According to research by Hong Kong based supply chain compliance solutions provider QlMA, 75% of respondents globally named Chinaamona their top three sourcina geoaraphies, with 55% reportina that Chinese supoliers accounted for over half of buving volumes in the first half 2020
The report, 'Evolution of Global Sourcing in 2020,' analyses changes in global sourcing patterms in response to the ongoing Covid-19andemic. US-China rade tensions and other disruntions to clbal supplv chains. The company conducted a survey in .ulv 2020. drawing on input from 200-plus businesses across a variety of consumer product segments.
On an industry-by-industrv basis. most sectors covered by the survey were less likely to do the maiority of thelir sourcina from Chinesesuppliers compared to the data collected in past surveys.
The trend was particularly noticeable among businesses working in textles, apparel and footwear, where businesses have clearly continueddiversivina ther supo ier porfolo. wit an ever-owerina relance on china and a more even distributon between overseas sourcina in Asla and
While near-shoring remains more popular than re-shoring, textile and apparel companies were more likely to buy from US and EU-based suppliers in the first half of 2020 compared to last year.
indeed. the percentace of respondents doind over 50% of their sourcing in China in the first half was down to 46% from 72% in the comparableperiod of 2019. While the percentage of respondents planning to diversify their sourcing - as opposed to those with no plans to change their sourcing regions - was at 76% from 86% last year
Consistentiy rankind among China's recional competitors. Vietnam continues to reap the most benefits of the continued mass exodus ofWestem buvers from China, with 40% of EU respondents and almost as many US brands including Vietnam among their top sourcing regionsAfter Vietnam, India and Bangladesh, aterative sourcing options of choice are stil largely countries in Asia, including Taiwan, which enjoyedoverwhelming preference as a sourcing market among US-based respondents.
For US-based companies, the appeal of sourcing destinations closer to home continue to grow, with the popularity of Latin and South Americaalmost doubling compared to ast year. Meanwhile, EU brands are increasinaly tuming to Turkev as a near-shoring destination (named amonothe top three sourcing regions by 30% of EU respondents)
The report found Us brands are by far the most likely to diversify sourcing, with 95% of Usbased respondents reporting plans to that efectlikely due to the pandemic and worsening geopolitical tensions between Washington and Beijing.
on the other hand. European buvers are not as ready to walk away from China. with oniv about half of Eu-based respondents reporting plansto seek suppliers elsewhere.