From ‘fast’ to ‘precise’ fashion . . .
The ‘precise fashion’ industry in Europe and North America is fuelling disruption in Southeast Asia’s garment industry. The old model of stack-them-high and sell-them-cheap ‘fast fashion,’ that prevailed in the 2000s is transforming due to changing consumer demands and industry technology. Fashion retailers in Europe and North America are now competing with each other to win consumers by using algorithms to understand consumer tastes and recommend products from the latest fashion trends that emerge on social media platforms. They are prioritizing precise calculations of consumer demands and customizable products that are produced in smaller batches and require shorter times from the design phase to the market. These changes in the Western fashion industry have put garment suppliers in Southeast Asia under immense pressure to deliver finished garments in 60 days, down from the 90 days of four years ago.
Evolving supply chain . . .
The decade-old model of sprawling transnational garment supply chains linking low-wage producers in Southeast Asia to high-income consumers in Europe and North America is under siege. The need for low-wage labour has led to the offshoring of production to Southeast Asia, which has long been the manufacturing hub for garment along with China and Bangladesh. With the evolving fashion model that focuses on speed and precision, however, many fashion retailers are shifting from ‘offshoring’ to ‘nearshoring’ to move production closer to end consumers. This means that garment production hubs may move from Southeast Asia to Mexico and Turkey, which are the ‘nearshoring’ hubs for North America and Europe.
End of the ‘race-to-the-bottom’ model . . .
Although automation and digitalization are expected to put millions of jobs in Southeast Asia’s garment industry at risk, the displacement of jobs has been, so far, offset by the strong overall growth of the industry and by workforce upskilling. As more skilled workers are needed to work with sophisticated machines and software, the “race-to-the-bottom” model in term of wages that has long prevailed in the region is changing, in which higher wages are expected to come. Adidas recently closed its high-tech factories in the U.S. and Germany because it was not economical, and has planned to focus its production in Southeast Asia. Perhaps robots will not completely replace humans in Southeast Asia’s garment industry anytime soon.
READ MORE
- Business Insider: Adidas is closing its high-tech “robot” factories in the US and Germany just 3 years after the first one opened
- Nikkei Asian Review: How the death of fast fashion is transforming Asia’s garment industry
- Southeast Asia Globe: What automation means for Asia’s manufacturers
