Still king of the blue jeans hill with more than 20 percent of the import market, Mexico is rapidly losing ground to countries such as China, Indonesia and Pakistan as they expand their production prowess in the area.
WASHINGTON — Still king of the blue jeans hill with more than 20 percent of the import market, Mexico is rapidly losing ground to countries such as China, Indonesia and Pakistan as they expand their production prowess in the area.
Cost is the most important element determining where brands ultimately place their orders, but a number of other factors are influencing sourcing decisions, from developments in trade law to growing expertise in laundry and washing techniques in the Far East and growing consumer markets outside the U.S. Combined, those trends could help supplant Mexico as the top supplier soon.
For the 12 months ended Feb. 28, producers in Mexico shipped 3.9 million dozen pairs of women's jeans to the U.S., a 40.9 percent drop from a year earlier, but still enough to make up 23.1 percent of the market. China's share rose to 14.1 percent of the market after shipping 2.4 million dozen pairs, a 56.7 percent rise. Other gainers included Indonesia, with an increase of 45.9 percent to 814,000 dozen, and Pakistan, with a 97.4 percent rise to 712,000 dozen.
"The cost structure is one where it's hard to ignore the Asian option," said Mark Messura, executive vice president of global supply chain at Cotton Incorporated, a not-for-profit research and promotion group. "It's very difficult to make some of the Western Hemisphere options work relative to China, relative to the Indian subcontinent."
Messura pointed out that the jeans selling for $22 to $23 are the vast majority of the market, making price vital. However, producers in the Western Hemisphere do have the advantage of quicker ship times to the U.S.
Companies also are beginning to look at where they might be selling their jeans in the future.
"A lot of companies are now looking at selling product not just in the U.S. market, but selling it in developing markets like China, like India," said Messura. "If you have a China program, maybe it makes more sense to increase your production in China and keep a chunk of it there for selling into the Chinese consumer market."
With a total population of 1.3 billion, China's market has great potential, though people there generally have little disposable income compared with Americans. The sheer girth of China also can work against it.As the country has moved toward a more market-based economy and become a manufacturing powerhouse, wracking up a record trade deficit of $232.5 billion with the U.S. last year, there also have been efforts to curtail trade. China is one of the few countries still subject to quotas on apparel, under a 2005 deal that restrains imports of 34 types of goods this year and in 2008 to the U.S. at predetermined growth levels. Imports of women's jeans are among the goods covered under quota, a dynamic influencing orders.
Quotas are by no means the only element of trade policy developed in Washington and capitals around the world that can shift where companies choose to source their jeans.
For instance, recent changes to the African Growth & Opportunity Act, which offers duty free access to the U.S. market, have thrown a monkey wrench into the sourcing process for some. An "abundant supply" provision in the law means producers, at first, need to use fabric from the region to get duty free treatment on jeans. Once a certain threshold is met, producers can begin using fabric from outside the region, but some say the threshold is too high.
"We've actually placed our denim production plans in Africa on hold," said Helga Ying, director of worldwide government affairs and public policy at Levi Strauss & Co. "We're still committed to Africa for our nondenim production."
Some of the big winners in the denim sourcing game, however, have gained ground because they have obtained expertise that is vital to the small, but trendsetting, premium market.
"The technology and the artistry of laundry and finishing of fabrics were sort of the last frontiers of China," said Michael Silver, president of the Silver and 1921 jeans lines based in Winnipeg, Manitoba. "We've continued to push and have really upped the amount of premium product that we've made in China."
Producers in Pakistan and Bangladesh also have been paying greater attention to the technical side of the business, from investing in laundry plants and water-treatment facilities to employing experts in the process.
"They've gotten better at the game of denim," he said.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty