Why clothing makers are finding it hard to break with China’s supply chain
- Apparel makers and factory owners who shifted their production to Southeast Asia are now moving back to mainland China
- Rising wages in Southeast Asia have reduced the region’s cost competitiveness with China, which also has better labour productivity
From Adidas to Nike, apparel and footwear makers have been shifting their supply chains out of China, pushed by geopolitical tensions and pulled by lower manufacturing costs.
But amid mounting global economic uncertainties and weakening consumer demand, many are discovering that finding alternative production hubs comes with its own challenges. Some are even upping stumps and moving back to the mainland.
“That mature ecosystem, established over decades in China, not only ensures competitive price points, but also delivers stable quality at mass production that’s hard to copy,” Laura Magill, the global head of sustainability at footwear brand Bata Group, said. “I can’t think of another place that can do the quality, the quantity and the price as well as China.”
Apparel makers and factory owners that Bloomberg News spoke to echo Magill’s sentiments.
Lin Feng, in his 50s, is a businessman who owns apparel factories in and around China’s southern city of Guangzhou. His plants make clothes primarily for US and European clients.
