The continued trade tensions between the U.S. and China alongside the Covid-19 pandemic’s stranglehold on the global apparel supply chain spotlighted an industrywide need for sourcing diversification. No longer can brands risk disruptions at their factories or on their shipping routes that could delay most of their product line.
Turkey might be the sixth-largest supplier of apparel worldwide, but the global apparel market is still largely flooded by garments from China, Bangladesh, Vietnam and European Union countries like Germany and Italy. Although this makes Turkey a lesser-known entity than the larger textile markets, apparel brands would benefit from giving its manufacturing ecosystem a closer look when considering new countries to source from.
As the leading apparel industry association in Turkey, representing more than 80 percent of the nation’s apparel exports, the Istanbul Apparel Exporters’ Association (IHKIB), argues that one of the best values brands can gain from working with a Turkish apparel manufacturer is the collaboration that takes place in garment design and development.
In some cases, Turkish apparel companies already do the design for European buyers and brands, who then simply choose the design from among the ones offered by the manufacturer, which then makes the collection. However, the buyers may also contribute their own design ideas to the apparel manufacturer, creating new collections based on the cooperative approach.
As sourcing managers in Europe look closer to home to fulfill demand, they may think more about nearshoring developments amid their diversification efforts. According to a McKinsey & Co. study conducted in collaboration with Sourcing Journal, 46 percent of sourcing executives indicated they expect nearshoring to increase. Turkey stands to benefit most from the search for closer alternatives, with 43 percent of European sourcing executives expecting an increase in value share in the market.
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IHKIB points out that although only 1 percent of apparel imports in the U.S. comes from Turkey, more American brands are coming to Turkey for an alternative production base in recent years, particularly as they aim to nearshore within their European operations. Global apparel brands based in the U.S. such as Ralph Lauren, Banana Republic and PVH’s Tommy Hilfiger and Calvin Klein, have shifted some of their European production from markets like Portugal over to Turkey.
The Turkish apparel industry can supply these companies’ distribution centers in Europe faster than their larger Southeast Asian counterparts, making the country a good candidate for nearshoring at least some of their manufacturing capabilities. For example, supplying to a Ralph Lauren distribution center in Milan only takes three days by truck shipments, compared to deliveries from East Asia taking more than a week, according to IHKIB.
It should be noted that the IHKIB is firm on the belief that the Turkish apparel industry is not aiming to replace suppliers in the Asia-Pacific region. But given the differentiation offered within the market, particularly when it comes to the collaborative aspect of design and product development, Turkey’s apparel industry may be able to offer the alternative necessary to effectively diversify the supply chain.
And in a time when more apparel brands are considering vertical operations within the supply chain, Turkey would be a viable option to either supplement already existing chains or start fresh. Turkey’s apparel manufacturing industry has largely been built on a vertical model, enabling companies operating in the sector to gather raw materials, produce yarn and develop garments all under their own facilities. With that in mind, product diversification is also a benefit that Turkey can deliver to brands in the U.S. and elsewhere. In working with its own materials, Turkish factories produce an incredibly wide range of products, including knitted wear, denim, socks, T-shirts and outerwear.
According to IHKIB, Turkey is one of the biggest knitted goods exporters in the world, with the country being the second-biggest supplier in hosiery and a leader in denim products. Such a broad array of garments could prove to be an incentive for brands that might be looking to move some of their sourcing capabilities away from their traditional suppliers and expand into new product categories.
While Turkey is lauded for its flexibility in the type of apparel it can produce, IHKIB also praised the market’s elasticity in production capabilities, noting that manufacturers are willing to produce small quantities and large quantities at the same time. Since the Turkish apparel industry by large doesn’t ask customers for long-term production times and to make long-term stock production, this could serve as yet another benefit for COVID-strapped apparel companies that are apprehensive about having to order an excess amount of stock that could end up floundering in their stores and distribution centers.
Learn more about the Istanbul Apparel Exporters’ Association (IHKIB), their members and recent projects here.