By  on May 24, 2007

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.

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