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Amid Trade Uncertainty, Colombia Offers Alternative Sourcing Destination

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The current uncertainty surrounding tariffs in China has some retailers looking to alternative sourcing options. And the tariffs come amid what’s already become a pressured market.

“The market is not realizing how much brick-and-mortar retail is incrementally struggling,” UBS analyst Jay Sole said in a research note, “and how new 25 percent tariffs could force widespread store closures.”

Further, as Rick Helfenbein, American Apparel and Footwear Association (AAFA) president and CEO, said, many of the associations’ members are looking for a way out of China.

By positioning itself as a “one-stop-shop” alternative in Latin America, Colombia’s relevance in textile sourcing market is on the rise and offers an attractive solution.

Business benefits

With a renewed, agile, environmentally responsible industry with a well-established identity, the country achieved $939.5 million in exports during 2018, a 2 percent increase compared to 2017.

Three categories accounted for the lion’s share of the increase in exports: apparel, worth $516.8 million (up 7.1 percent); textiles, worth $208.2 million (up 6.1 percent); and leather goods, worth $57.1 million (up 13.3 percent).

The United States, Ecuador and Mexico—the top three buyers of Colombian apparel—all increased their purchases in 2018: The United States purchased $316.9 million (up 10.6 percent), while Ecuador purchased $151.5 million (up 9 percent) and Mexico purchased $92.3 million (up 6 percent). Among the most outstanding export products last year were jeans ($49.6 million), shapewear ($41.6 million), swimwear ($20.2 million), and lingerie and underwear ($61.2 million).

Colombia and U.S. duty-free status provides its business partners with flexible production quantities and, for many, the convenience of operating in the same time zone. It also boasts social compliance manufacturers; WRAP- BASC- and CTPAT-certified companies; and lead times of just 30 to 45 days with flexible production and fast reaction product lines.

With more than 4,500 maritime export routes and access to 680 ports, Colombia’s current trade conditions are making an important impact in the fashion industry. The country has access to more than 60 countries and more than 1.5 billion consumers through 16 trade agreements, while a current dollar exchange rate has increased buying power by 10 percent in the past 12 months.

Flavia Santoro, president of ProColombia, cited the use of existing trade agreements as an export strategy for the apparel industry, “as well as sales promotion of Colombian designers’ value-added products and industry digitalization through a powerful channel such as e-commerce.”

Annual growth of 2.1 percent is expected from 2018 to 2022 in the global apparel market, and Colombia has the potential to position itself as one of the region’s main suppliers.

Industry and community impact

Colombia prioritizes sustainable fashion that incorporates design and garment manufacturing maximizing community benefit while minimizing environmental impact. The industry already has the technology to extract fibers from discarded garments and reuse them, with some companies offering technical fibers and textiles manufactured from the recycling of PET bottles, coconut husk and coffee fibers.

Product assortment

What’s more, the fashion industry in Colombia supports equal opportunities and the improvement of employment practices and working conditions, with a commitment to socially responsible production integrating mothers’ heads of families, indigenous communities and Colombian artisans. It is also the first Latin American country in ethical practices and sustainable development, according to IMD’s 2017 World Competitiveness Yearbook, and the second in social responsibility, according to the Environmental Performance Index by Yale Center for Environmental Law & Policy.

The Sourcing at MAGIC, Project and FN Platform shows, held August 11-14 in Las Vegas, will provide attendees with a look at Colombian companies incorporating innovation, artisanal fashion, social responsibility and ecological awareness into their products. For example, shapewear brands will show bands aiding posture correction and raising body temperature, while textile companies will display products with seaweed, caffeine and vitamins to lose weight and nourish the skin.

Wholesalers and retailers looking for brands and private-label programs will have the opportunity to explore solutions at Colombiamoda, held July 23-25 in Medellin. Billed as the largest fashion platform in Latin America, Colombiamoda will have 570 suppliers of denim, active/performance wear, swimwear, textiles, underwear, leathergoods and accessories.

Colombia is betting this year on the fourth industrial revolution, with new technologies impacting the economy and industry development. In its 30th special edition, Colombiamoda gathers technology, creativity and talent in the same platform to educate attendees on current market dynamics. Offering brand visibility through four major innovations—Concept Market, Colombiamoda Digital, Private Showroom and Commercial Sample—Colombiamoda’s Fashion arm presents designers’ catwalks and its Knowledge arm informs with 16 seminars and workshops.

ProColombia is sponsoring approved buyers with free or discounted airfare, flexible hotel rates and customized agendas. For details and registration, contact Sebastian Echavarria, Procolombia’s trade representative, at sechavarria@procolombia.co or visit https://procolombia.networkingcolombiamoda.com.

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