How do the textile industry in Southeast Asia, Vietnam, Myanmar and Bangladesh compete in the global market?

The content of this article is selected from the 2018 China and Asia Textile International Forum, how Southeast Asian textile and garment companies compete for global market roundtable discussions.

Host Navdeep Sodhi (Gherzi Textile Group Partner, India):

Supply chain or globalization is no longer a new concept. It has existed in the past few hundred years ago. It can be said that this is a historical phenomenon. In the continuation of modern life, no matter which place the United States or the United States can feel To the role of globalization and the impact of the global economic system, this is an irreversible trend, which is also the fact of human civilization and economic development.

In the past 2000 years, India and China have been the world's largest economies. Since 2000, India and China have accounted for 60% of global GDP. Then in the 1820s, when the steam engine was invented, the Western countries entered the industrial revolution and changed the way goods were produced. So the center of the economy became more global, we could transport one product from one place to another. Local and economic development has become more and more developed. After the industrial revolution, these developed countries have become more developed. Until the early 20th century, or in the 1990s, information technology began to develop at this time. Information technology can be said to be industrial. The country invented, because they also hope to achieve economic rebalancing, after that, this is what we call the big split.

Then there is a big aggregation. Information technology can ensure the concept and the free flow of physical goods, which can reduce the cost of these ideas. The knowledge accumulated by Western society can be conveyed to the eastern countries, so even though the technology is still in the West, the goods can Production in the eastern countries, this can be said to be the embryonic form of globalization, but also brings about the globalization of the supply chain, a big foundation behind them is the low-end labor costs of those developing countries.

We have now entered a new era of globalization. As a human being, you don’t even need to go anywhere else, whether it is Industry 4.0 or digital, we are constantly reshaping the future supply chain system, and will be with you later. The guests conducted in-depth discussions, which are ongoing and evolving trends.

Nguyen BinhAn: Secretary-General of the Vietnam Cotton Textile Association, has installed 8 million production shuttle machines so far, and now has more than 100 shuttle factories, second only to Bangladesh, and the world's largest cotton producer.

Nguyen BinhAn:

Hello everyone! I am from Vietnam. It is true that we can never replace China. There is no doubt that we have our own textile factory here. We will buy cotton, carry out subsequent processing of cotton, and export it to other Southeast Asian countries. Since 2016, China has become a very large customer. China is now a very important export importer of Vietnam. Our annual trade volume is increasing by 80%. Product supply will be exported to China. It can be said that with global supply Vietnam has benefited from the transformation of the chain system. We also benefit from it because we have a similar oriental culture and we have similar trading habits and production infrastructure. Manufacturers in Vietnam do not regard China as a threat and an obstacle, but complement each other and can reciprocate, especially like knitting and weaving, we can become a necessary supplement to China. As a spinning mill, Vietnam has a very good integration with the global system. This can be said to be some of my views on the Vietnamese textile industry.

Senior Vice President of Bangladesh Garment Manufacturers and Export Association, head of a large group

Faruque Hassan:

Hello everyone, Bangladesh’s social economy has attracted worldwide attention, and its economic growth has exceeded 7%. Our development goals in the past few years have also been achieved well. The garment industry is an important economic base. Bangladesh is a very large trading country for apparel products. Europe Including 28 member states, Bangladesh is only a country, so we can say that it is a very important exporter of clothing products around the world. As far as the current situation is concerned, we have a trade volume of $13 billion worth of clothing industry every year. We also believe that we are not purely competitive with China because each of our countries has its own advantages. Of course, China’s advantages are better than ours. More, and the resources are more abundant, this is for sure.

From the figures shared today, in the past three decades, artificial fibers and textiles have actually accelerated growth. We hope to create a win-win situation. We also hope to import more related fabrics from China and promote the domestic apparel industry. development of. Because many of our products are exported to other developed countries, and there are other developing countries, we all have contacts. Personally, I believe that China is not our competitor, we can complement each other. Mutual benefit promotes common development and achieves sustainable development goals.

Many of the guests mentioned today, I want to emphasize here, Asia can be said to be the center of the development of the textile industry. In the 1960s, less than 30% of the clothes were produced in Asia, but now the number has reached 65. As much as %, more than 70% of apparel products are produced in Asia. In Asia, including China, China has a lot of procurement resources, and there are also many industry segments and industry opportunities.

We have more than 280 factories in the United Nations for green certification, and there will be more compliant countries over time. Seven of the top fabric factories are now located in Bangladesh and may be in front of us. There are a lot of good news and more and more good practices. We know that there will be other challenges, but in general, Bangladesh will get better and better in the textile and apparel industry.

The demographic dividend is also an important trend, especially as the speakers in Taiwan mentioned that the Japanese are becoming more and more aging, and other countries are also aging. The population of Bangladesh is very young and 70% are Under 40, or 65% of the population is even younger. The population under 30 accounts for nearly 2/3 of the population. These people are very professional and very young, so we also found that there are many tax exemptions in this market. The policy, the rich demographic dividend provides a good opportunity for the rapid economic growth of our country.

DrKhinMaungAye: Director of the Myanmar Garment Manufacturers Association

Moderator Navdeep Sodhi:

The Myanmar market is very successful in the entire ready-to-wear and apparel market. Can you list two challenges and what challenges and benefits are there to overcome in Myanmar?

DrKhin Maung Aye:

First of all, we have been reviewed by the United Nations. In 2012, we have gradually established our foundation in the entire industry. In 2013, we began to implement tax exemption from EU exports. After that, we also invested in a lot of investment with EU investors. Our country invests, we also mentioned the population. Our country is 53 million people, the average age is only 22 years old. Similarly, our population is very young, and there are really a large number of working-age people.

70% of our country's production is agriculture, the primary industry, and many of us want to enter the service industry and manufacturing industry. This is a small, medium-sized population structure with very rich labor resources. In addition, we also know that our country has made contact with China through the “Belt and Road”. China has already agreed to build two high-speed railways from Kunming to Yangon in the west of China. China Urban Construction Group is doing related work in Myanmar. Of course, we also spend a lot of energy on infrastructure to improve, but it is not a reality that you can't go anywhere in Myanmar.

We want to say that in terms of infrastructure, including the Internet, we have also invested $3 billion to do some work. In Myanmar, we can also receive 4G. The traffic fee of 4G is also very cheap. Therefore, surfing the Internet is not a problem, and calling is not a problem. You can use very good telecom signals here. Of course, the bigger problem is the factory, our good factories are too few, and the water resources are too limited. Most of our ships have only 3,000-4,000 tons of inland rivers, and there are no big ports like Singapore and Malaysia. This is a problem that the Myanmar industry needs to develop and upgrade, but we also see that this is done a lot. The work also mentioned the railway from Kunming to Yangon.

There are also delivery problems. Our goods are going to Singapore. If you want to go to Japan, it may take a lot longer than Vietnam. Our market may be more based on European customers. Maybe this and other purposes. Compared to the ground, our situation will be better when we export to Europe, there will be no disadvantages.

Kundan Sengupta: A senior partner of Thread Sol in Singapore, Thread Sol is a global technology pioneer in the use of artificial intelligence and big data. Headquartered in Singapore, the company provides software solutions for apparel manufacturers and brands.

Moderator Navdeep Sodhi:

In addition, I share a high-tech, I would like to ask Kundan Sengupta a question, digital in your eyes, what impact Industry 4.0 has on your industry, and your company, or similar friends and peers with you and the government Working together to address the challenges facing this textile or apparel industry?

Kundan Sengupta:

I am very grateful to the moderator for the introduction. First of all, we started with e-commerce. We also mentioned it several times this morning. Just like the US woman Julia asked questions, some people mentioned the Amazon problem. She said that we must first make a choice. You are Not wanting to compete with Amazon, this is the first thing you have to face. Then I want to say that you choose to face Amazon, I think the chance is too small, unless it is Alibaba.

Amazon or Ali, other e-commerce giants, are gradually entering their own brands and self-operated brands. What does it mean to have these advantages? The independent brands they own are what we don't have. Our products are sold on their platforms. They know which products you have come to which customers, how each product performs, they know better than you, they really can use this A complete real big data builds their own brand, and he can also reach the huge market share they already have.

The No. 1 shop is also mining numbers and wants to mine data from the retail scene. This is a good practice for big data. I want to give you a simple understanding of how big data allows these technology giants to do things. We know China’s "Double Eleven", the GMV data is the highest on this day, e-commerce sales are the highest, e-commerce will actually change the price on the e-commerce website, there may be a variety of prices on the 26 million times a day. The kind of change and adjustment, the power that e-commerce gives us is huge.

Behind the entire e-commerce is also promoting the development of fast-moving, fast fashion development, we know that the past speed is slow, we must speed up the delivery of products, for suppliers and manufacturers as well, now we 35% - 40% of the shops spend their time as a brand in technical communication. This part of the time needs to be reduced. On the manufacturing side, if it is for our planning and planning, it will sometimes be compressed from the past few weeks and months. 35-40 minutes, from planning, production, implementation to a shorter and shorter cycle, with fast fashion to accelerate the entire cycle. We found that the growth rate of the e-commerce industry has double-digit growth. If 100 new products are launched this year, 118 products will be launched next year to satisfy consumers. It may be doubled in the next three years. The amount of your work is very large, the same population, the same staff to do twice the work, in this case, can we solve this problem by just e-commerce?

I want to say how to use AI, how to use these moves, we need artificial intelligence, and we need other assistive technologies. We know that these different e-commerce giants sometimes use similar or identical suppliers, so we will also see that in terms of the excellence of production, there will be a so-called upper limit sooner or later. AI can include pricing, cost, and cost-effectiveness in traditional subdivisions. It can really be helped by AI in the traditional stage. If you can share this part of the technology, it is very important to share it with the production partners.

We refer to big data, big data will also mention a lot of single items, in the past it took too long, and even behind it can reduce the cost of production, reduce the cost of distribution logistics, and bring a new series of business models. For the company we have found a lot of maps now, he can predict very accurately, for example, how long you have to go from Hongqiao Marriott Hotel to Pudong Airport, because he is based on the road conditions of millions of people, big data, technology It is also possible to characterize the product layout and product mix, and provide more accurate forecasts based on the manufacturer's experience, depending on the season.

In addition to some new procurement models, big data can really achieve very fast picking, including the cost of a different point. When we refer to the production part, including planning to landing, and execution, including counting, the plan is a science, not an art, with the help of AI, with the help of big data, but by landing and execution The plan can be done well, but the environment of the factory is changing rapidly. Real-time feedback is needed at any point. The production plant needs to be adjusted in real time. Based on all this, a very large data set is needed to help you predict the next production. How many fabrics are needed for these products.

Now we can do it, and in the production process, whether it is Li & Fung or Bangladesh, including our local production companies, we are now working hard to shorten the planning time, planning time, because these are science, we even have a few minutes It can be done, it is also reduced by 70%, 80% of the time, greatly improving the accuracy of our calculations, because the use of a large amount of AI and data, can better have the cost of their respective subdivisions under the entire product portfolio, and Being able to plan in a shorter period of time, helping you to do a series of business planning based on an artificial intelligence-driven platform, and doing related negotiations, is undoubtedly far-reaching. Finally, for technology, we have to compete with e-commerce and big giants. I want to use AI data or big technology. If you don’t use this technology, you may only be behind others. Any hope.

Moderator Navdeep Sodhi:

I also want to mention two big countries. They are very important markets. They are very important markets outside of China. Vietnam and Myanmar. Can you share how your competitive market has improved?

Nguyen Binh An Secretary-General of the Vietnam Cotton Textile Association:

Thank you very much for your question. We must first put the whole of Vietnam mentioned by the speaker this morning as the second after China. I think he is very stable and ranked second. In fact, there are the following reasons.

First of all, including the policy above, we can see that Vietnam has a very open policy. It has the same reform and opening up as China, including the ASEAN region, including the signing of the free trade agreement, the FTA agreement, and the multilateral and bilateral free trade agreements. Is the size of the world's largest FTA, FTA can help us in the entire tax incentives, many other incentives can be winners, including the manufacture of spinning to the manufacture of ready-to-wear, from the perspective of spinning can look at cotton prices China Close cooperation with Vietnam has helped Vietnam become a major exporter of spinning. From 2007 to the present, the number of textiles has doubled from the past to the present. In 2007, it was 3.7 million, and now it is 8 million. When we predict that the total number of spinning will reach 10 million or 12 million by 2025, of course, this is inseparable from China.

Such a foundation can make us develop very well. In addition, we pay attention to production costs. We attract a lot of foreign direct investment. Of course, the Vietnamese government has also attracted many foreign companies to invest in Vietnam, including we have a series of tax incentives, laws, and labor costs still have a comparative advantage. Our industry and electricity costs are very low, and our electricity costs are only half of China's electricity costs, so simply based on the dual advantages of policy and cost, Vietnam can quickly take off in the past decade.

Faruque Hassan Senior Vice President, Bangladesh Garment Manufacturers and Export Association:

I share that the economic advantage for Bangladesh is not great, because the country is not big, we also have a lot of government subsidies, we must also become more competitive, we hope to create an environment-friendly, low-energy industry, the only way In order to improve competitiveness.

Regarding the issue of compliance, we think that compliance in Bangladesh is not enough, but in fact, each of our factories has completed the audit on the international platform, so we are very strict with ourselves regarding compliance, and all audit reports can be Publicity on the website, you can view it anytime, anywhere, no other factory allows you to see the audit results of the factory, but Bangladesh is allowed, which is actually a lot of efforts we have done in compliance. Regarding compliance, Bangladesh has done a very advanced job. We have done a very good job in this field. I am very convinced.

Second, we are building an environmentally friendly development system. We are also looking at wastewater discharge, which can reduce the use of water. Back to ten years ago, we basically dyed at least 400 liters of water per kilogram, and now the water consumption has dropped significantly. So, in terms of environmental protection, we are constantly making efforts, there are other areas, we are also developing rapidly, and of course it takes time.

We are not the same as Vietnam and Cambodia. 90% of our operations are operated by companies in Bangladesh. In the long run, we will get great benefits. Cambodia and Vietnam have a lot of foreign investment, and there may be many foreign companies. However, in the long run, it is also a complete advantage. Including Indonesia, Indonesia has more than 200 million people. South Korea made a lot of investment 30 years ago, attracting a lot of investment from China and Taiwan, but they are coming now. In fact, development is already lagging behind. There are also people like Sri Lanka who have a highly educated workforce. They also have many very high-end brands, but they have some policy problems. Many brands have already withdrawn from Sri Lanka. Directly affect the development of the local industry in Sri Lanka.

Moderator Navdeep Sodhi:

Next, I would like to ask you a question. Each guest will express their suggestions for global customer retailers or investors. Do you think you want to share the most important suggestions?

DrKhin Maung Aye Director of Myanmar Garment Manufacturers Association:

Our country is constantly attracting investment to upgrade and develop the industry. We are still relatively strong in this industry. The Singapore government and the entire apparel industry want to invite investors to invest in our industry, and the government supports it. The intensity is also very high. We are now working with many organizations and solving the labor shortage problem. Compliance has always been good for us. In Myanmar, we don’t have any corporate social responsibility, and there is labor infringement. .

Kundan Sengupta Singapore Thread Sol company senior partner:

The suggestion I want to make is very simple. 89% of the work is in our clothing industry. It can be replaced by technology in China. These technologies are now in place. China has always been a very front-end in the adoption of new technologies. The adoption of digital is also very popular, but if that number is true, we can imagine how much potential other countries have, whether it is like Carrefour, Wal-Mart, etc., whether our investment in this field should continue to strengthen, If you want to reduce the cost of purchasing and reduce the time it takes to purchase, you need to explore a new way.

Nguyen Binh An Secretary-General of the Vietnam Cotton Textile Association:

In Vietnam's vertical sector and supply chain system, Vietnam is very mature in textile and clothing companies. This is also a key point in our vertical field. We hope to attract investors to Vietnam and help us build a more complete supply chain system. It also achieves compliance by attracting foreign investment. We hope to find global partners to help us set a higher quality vertical industry segment.

Faruque Hassan Senior Vice President, Bangladesh Garment Manufacturers and Export Association:

Now in Bangladesh, we can say that it is a hot spot for foreign investment in the textile industry. In particular, the Bangladesh government has put forward many strategies and incentives, policy support, and encourage foreign investment. These advantages are still very attractive, and many foreign investment. When they came to Bangladesh, they saw it, so they came to Bangladesh to see the actual situation.

In January and February of this year, compared with last year's investment, the investment increased by 10%-20%. The textile industry is growing. Our industry is very mature, but there are still many things to do, mainly in the procurement location. The raw materials are very good. Price, we produce 60 basic products, there are many high-end products, our biggest opportunity is that although we are the second largest import and export country, but our market share has reached 7%, China is the number one, their The total import and export volume has already accounted for more than 30%, so we still have a great opportunity to continue investing, including artificial textile materials, these areas are developing rapidly, and we also hope that investors will come to invest here.

I think that as a Bangladeshi, our national leaders are also emphasizing the importance of developing the garment industry in Bangladesh. I suggest that you come to Bangladesh to see it in person. I believe we must be a hot spot for your investment. Thank you.

Moderator Navdeep Sodhi: Thank you. Let me make a simple summary. All the representatives of several countries on the stage have great opportunities to develop their supply chain. They can overcome the challenges of logistics and build value chains to make them more Complete, in addition to this, including the total export value of about 50 billion US dollars in Bangladesh, which is a situation a few years ago, we also mentioned that high technology has become an integral part of the business model, there will be many Technical experts help these companies build good digital platforms and tools.

Editor in charge: Xu Yuehua

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