Breakthrough or Breakdown ?

───  An Analysis of Malaysian Apparel Performance from USA Import Statistics    

Introduction

Globally, the United States is the dominant consumer of imported apparel, with an estimated 29% of world imports. Germany, Japan and France together account for the next 25% of import consumption                

During the last 10 years from 1992 to 2002, there were 201 countries worldwide exporting clothing to USA. (Please refer to Statistic for full context) show that Malaysia rank as the 15th supplier of apparel to USA in year 1992 in terms of value. We are maintaining our sales for the past 10 years. Unfortunately, compared with the double digit market growth, our ranking fell to no. 23 as at May 2002. Are we striving hard for breakthroughs ? Or are we lagging behind letting go our opportunities? Are Malaysia Apparel industries doing well? Where is our future?

Table One : Apparel Exports to USA : Malaysian  share

  1992 Rank April 01 - May 02 Rank
World $26,712,877,52   $54,576,108,150  
Malaysia $607,293,330 15 $722,220,036 23

Our Competitors  : Who have by pass Malaysia?

Table 2 indicates the significant rising stars of apparel suppliers. Cambodia has the fastest growth (94,712 times). In 2001, apparel export to USA  rose 41.36% in quantity and 1.66% in value compared with year 2000 and accounted for 2.23% of USA textile and apparel imports. The ranking also rose from 21 to 16.   El Salvador (6.5 times) and Honduras (4.5 times) also emerge rapidly as key suppliers.

Table 2 Supplier of Apparel  to USA : 1992 vs  5/2002

 

1992

Rank

April 01 –May 02

Rank

Honduras

$365,046,544

19

$ 2,281,969,344

4

El Salvador

$165,833,207

26

$ 1,630,595,927

13

Canada

$353,587,829

20

$ 1,562,864,078

14

Guatemala

$451,148,250

18

$ 1,547,690,035

15

Macau

$515,120,764

17

$ 1,121,888,965

18

Turkey

$329,311,704

22

$ 1,007,827,700

19

Cambodia

$9,557

136

$ 905,158,491

20

Pakistan

$334,100,077

21

$ 844,870,784

21

Malaysia

$607,293,330

15

$ 722,220,036

23

Our Challengers : Who are still behind Malaysia and impose potential threat?

Table 3 listed out countries that are dynamic suppliers of apparel to USA posing great threat to Malaysia. Among which Vietnam who had gained MFA status last year is expected to by pass Malaysia within a year or two.

Table 3 : Major Potential Apparel Suppliers to USA

  1992 Rank April 01 - May 02 Rank
Malaysia $607,293,330 15 $722,220,036 23
Nicaragua $3,444,423 84 $382,594,103 25
Burma (Myanmar) $27,283,604 53 $353,024,651 28
Russia $655,919 103 $337,226,353 29
Jordan $10,674,084 64 $242,431,395 36
Madagascar $213,936 112 $188,267,692 41
South Africa $2,585,435 89 $161,697,870 44
Bulgaria $14,370,314 60 $137,141,284 45
Vietnam 0   $123,720,797 49

Our Neighbours : Asean Ranking

Table 4 shows that besides Malaysia, Singapore, Philippines and Laos, all other 6 Asean countries are gaining a larger share of the American apparel market.

Table 4  Asean ranking and May import figure

 

April 01 –May 02
(12 months)

1992
Rank

 2002
Rank

May performance
(One month)
Indonesia $2,113,391,801 8 6 $139,016,439
Philippines $1,773,290,486 6 9 $105,092,093
Thailand $1,730,202,341 10 10 $96,065,249
Cambodia $905,158,491 136 20 $55,577,704
Malaysia $722,220,036 $15 23 $50,749,887
Burma (Myanmar) $353,024,651 53 28 $17,122,648
Singapore $282,060,672 13 31 $23,805,825
Brunei $197,407,584 59 39 $10,941,062
Vietnam $123,720,797 N/A 49 $38,397,483
Laos $2,584,330 76 109 $360,549

Our Mirror: Changes in Export Performance 

Table 5 reveal the export performance for the last 10 years following the reshaping of  sourcing. Strong upward growth shown in Latin America since 1993. The influence of NAFTA and the CBI is evident. Combined imports from CBI countries  account for a major share of US imports.

Table 5 : Export Sales Performance

Increase Maintain Reduce
Mexico China  Hong Kong
Honduras Dominican Republic Korea, South
Indonesia Thailand Philippines
Bangladesh   India
El Salvador   Taiwan
Canada   Sri Lanka (Ceylon)
Guatemala   Italy
Macau   Costa Rica
Turkey   Malaysia
Cambodia   Singapore
Pakistan   Japan

Losers : Where is our potential opportunity? 

Despite of the NAFTA influence, Mexico is loosing their market share for the last 2 years. In, 2001, shipments from the country fell by almost 10%. South Korea, Taiwan and Italy are having higher labor cost than Malaysia. It is notable that  Japan, Hong Kong, Taiwan and South Korea apparel manufacturers are shifting to China and other Asian countries for offshore manufacturing. We may take advantage of this opportunity to develop potential products.

  1993 Rank April 01 - May 02 Rank
Mexico $900,785,782 7 $7,330,097,614 1
Korea, South $1,867,094,089 4 $2,113,285,198 7
Taiwan $2,339,379,784 3 $1,698,680,501 12
Italy $691,120,053 12 $1,323,626,466 17

Conclusion

The most significant expansion of apparel manufacturing is still in Asia.  Despite of the intense competition and pressures, Asia is still having competitive advantage for US buyers. Lets continuously explore & develop the niche of Malaysia Products together. To prevent breakdown, let’s  breakthrough.