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You are here: Home / Sourcing New Suppliers / Garment and Shoe Production in Asia [Country Comparison]

Garment and Shoe Production in Asia [Country Comparison]

January 22, 2015

Sourcing New SuppliersA few weeks ago, I discussed garment and shoe production in Asia with an executive who has great experience in the footwear and garment industries. They shared some insights about different Asian and African countries, as far as production capabilities go.

Here are my notes in a list per country:

Myanmar

  • Right now it is not a major manufacturing center, but it should gain momentum in a few years.
  • 80% of the population works on farms. Don’t expect a very fast migration to cities.

 

Ethiopia

  • Large potential workforce (the second most populated African country).
  • Workers there expect to learn new skills. They don’t just come for a job. It is possible to set up a very good factory there.

 

Philippines

  • Culturally it can be considered a Latin-American country.
  • Non-monetary rewards go a long way to motivating the workforce. It is closer to Mexico than it is to China in that regard.
  • Very poor government — it was Asia’s second richest country after Japan after World War II, and they used to have Chinese as maids — now the opposite is true.

 

India

  • Factories there can’t seem to ship anything on time, whether it’s garments, furniture, or apparel. That’s the major problem.
  • In the North (and in neighbouring Pakistan), factories employ men (more than 90% of the workforce).
  • In the South, factory workers in apparel are mostly women.

 

Bangladesh

  • It is possible to find some good factories (from a quality and efficiency standpoint) with a good workforce.
  • Those good factories are more likely to be close to Chittagong (local village employees).

 

China

  • Labor productivity is still very low. In the shoe industry, for example, the average is 0.5 pair per labor hour, compared with more than 2 pairs in North America. This difference is NOT primarily due to automation, but to smart industrial engineering.
  • Very hard to engage in deep training with migrant workers who are planning to return in their home town in a couple of years. Changing the mindset is difficult.
  • Migrant workers are very focused on short term monetary gains.
  • Because of rising costs, China will keep losing garment and shoe business in the coming years.
  • Many Chinese and Taiwanese manufacturers are still chasing cheap labor instead of focusing on increasing labor productivity. They are relocating or setting up new factories mainly in Indochina (Vietnam, Cambodia, and Myanmar mainly) and in Indonesia.
  • In those countries, they can hire, and communicate with, a few local managers.
  • Chinese manufacturers generally don’t relocate their facilities to South Asia (India, Bangladesh, Pakistan). Similarly, African countries will probably not be a good option for them.

—

What are your thoughts on these manufacturing locations?

 


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Filed Under: Sourcing New Suppliers Tagged With: apparel, garment production in asia, garments, shoe production in asia, shoes, textiles

Comments

  1. CAPOU says

    January 23, 2015 at 12:30 AM

    Thanks for this cultural, historical and business Post.

  2. Matt says

    January 23, 2015 at 1:17 AM

    This looks about right based on my experiences, thanks for sharing.

  3. Dan Harris says

    January 23, 2015 at 3:22 PM

    The above absolutely corresponds with what we hear from our clients, but what about Vietnam and Indonesia and Cambodia and Laos and Angola. What do you hear about those countries?

    • Renaud Anjoran says

      January 24, 2015 at 2:06 AM

      # Angola: no idea.
      # Cambodia and Laos: it seems the vast majority of export manufacturing is handled by Chinese-invested factories. So it’s like China, with lower productivity, lower attention to detail (in general), and longer lead times (many components come by truck from China).
      # Vietnam: there are some good factories there. (And obviously some lousy ones too.) It is a very good choice for bamboo/rattan products and other handicrafts. Not bad in garment cut & sew (but fabrics usually come from China, so prices of finished garments are not very different). It is quite difficult to find power tools, electronics, etc. there.
      # Indonesia: vast population, high potential on paper. But apparently prices there are not competitive (yet?) when it comes to most consumer goods.
      Actually there are important trends in currencies and minimum wages behind all this. I am preparing an article about it.

  4. Lin x says

    January 26, 2015 at 10:56 AM

    Anything about Thailand?

    • Renaud Anjoran says

      January 26, 2015 at 12:31 PM

      There is very little production of garments and shoes in Thailand, in comparison with some other Asian countries.

      • Lin x says

        January 27, 2015 at 8:20 AM

        I thought so. But why is there little production in Thailand?
        Is it costly to produce in Thailand?
        Is the quality not up par?

        Thanks in advance

        • Renaud Anjoran says

          January 27, 2015 at 3:24 PM

          A lot of buyers tend to go where the wages are the lowest. 20 years ago it was China, 8 years ago it was bangladesh, these days they are getting excited about Myanmar and Ethiopia… But Thailand was never in that position, it seems.
          It is not a matter of substandard quality, no.

  5. Natasha Williams says

    January 27, 2015 at 3:01 PM

    How about Indonesia production? Better if will post also. What about Indonesian Handicraft?


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