The fashion business is now undergoing seismic changes as a result of increased globalization, digital innovation, and changes in consumer buying patterns.
However, the fashion industry is more unpredictable than ever before because of pressures on supply chains and rising inflation. The year 2022 was difficult for the global textile industry.
Pakistani textiles suffered from the effects of the global recession, energy shortages, high prices, and a decline in orders for inexpensive clothing. However, 2023 is predicted to be more challenging than 2022.
In Pakistan, where inflation is significantly higher than in all economies that export textiles, inflation is a major concern for textile industry players worldwide. In economies that are major buyers of textiles, they anticipate that inflation will reduce consumer demand as energy and food costs rise, and consumers would be forced to cut back on fashion purchases or switch to cheaper options as a result of inflation.
Another real issue for the business is the war in Ukraine, which has already hampered trade and spurred on an energy crisis that will have repercussions for some time. Additional COVID-19 outbreaks in China have hindered the country's economic development and disrupted trade routes. In 2023, the textile industry would continue to be plagued by all of these factors.
Despite Pakistan's weak economy and volatile political polarization, Pakistan's textile industry performed reasonably well. Over the past five months, exports have been decreasing in India. The decline in November was more than 15% compared to the exports that were carried out in the same month last year (which were nearly the same as ours). The Indian Ministry of Commerce and Industry reports that India's exports of clothing and textiles fell by 17.5 percent in August, 28.5 percent in September, 35.4 percent in October, and 15.6 percent in November.
This decline began in July of this year. In contrast, Pakistan's textile exports experienced a 5.1% decline over the same five months. In 2023, customers will be erratic and impulsive. Brands must take into account the factors that influence consumer shopping patterns and respond accordingly. Suppliers from Pakistan would need to pay close attention to how their customers are changing their strategies.
The challenges Pakistan's textile industry faces in 2023 are almost identical to those it faced in 2022. Pakistan's spinning industry is weak; only 1.2 million of the 12 million spindles installed in this sector are high-speed and energy-efficient. Since inefficient spindles negate any benefit, they receive from government power subsidies, the spinning industry is further burdened by the high-power rates.
The efficiency subsidies are advantageous to millers with 1.25 million efficient spindles. The spinners must deal with the low cotton harvest as a handicap. Spinners who booked import orders when prices were at their highest were particularly hard hit by volatile global cotton prices. Regardless, the spinning mills, which are owned by wealthy sponsors, will weather the storm, but they will likely limp for some time unless global demand and conditions improve.
Pakistan continues to export low-cost apparel. Bangladesh, India, and Vietnam are their rivals in this market. Due to the current economic climate and US-imposed limitations on Chinese textile exports, Bangladesh and Vietnam have made significant progress in recent years in the production of high-end fashion apparel to fill the gap left by China.
India is attempting to address this issue. During Covid-19, when Pakistan opened its economy earlier, exporters of Pakistani apparel established their credentials as high-quality producers. After the other economies returned to normal, the nation maintained its share. It is unlikely that it will lose market share in 2023 to its rivals because the quality of its clothing is typically higher than that of its rivals and the price is also slightly lower.
Pakistani exporters of apparel are not concerned about rivals; rather, they may face difficulties as a result of the global recession's reduction of the apparel market, particularly for low-end apparel. According to a number of expert studies, the market for high-end clothing is expected to grow even during a recession.
The site exists because the wealthy do not face any obstacles in continuing their clothing shopping spree because inflation has not affected them as much as the less fortunate class.
The wealthy may put off purchasing costly automobiles but not clothing. The extensive efforts of the Indian government to sign free trade agreements with numerous nations are yet another factor that is in opposition to the interests of Pakistani textiles. The first concession that the Indians demand when negotiating FTAs is for their textiles and apparel to be allowed into their country with no restrictions. Their request was granted in the most recent FTA with Australia, which went into effect on January 1.
The apparel industry in Australia is likely to be dominated by them. They are currently negotiating similar agreements with the UK, EU, and other Western economies. Pakistan does not have access to this state assistance. In 2023, other concerns include the weak rupee and issues with foreign exchange.
By: Ms Ifsha Naveed
Email: ifsha.naveed@gmail.com
