Fashion has always been in the fast lane, but today “fast fashion” is all the buzz. Translated from runway talk, this means the latest fashions are now available at affordable prices to consumers just weeks after they appear on the models.

Bernadette Kissane, apparel and footwear analyst with Euromonitor International, a market research firm, says that by designing and shipping new items continuously throughout the year, fast fashion apparel retailers overturned the traditional fashion business model in which collections were released only in the fall and spring.

Logistics is a key component of “fast fashion.” Those retailers that have embraced it – think Zara, H&M and Uniqlo – are reported by Euromonitor to have grown 9.7% per year between 2009 and 2014. Euromonitor reports that traditional-apparel counterparts have grown just 6.8% per year over the same period.

Consider this statement by Warren H. Hausman, professor of management science and engineering at Stanford University: “Fast fashion is a business model tailor-made for the multi-channel ‘I want it now’ internet-driven buyer of today. It offers significant business value to a range of retail companies whose product cycles are accelerating and influenced by celebrities, luxury brands, and media hype. The long and guarded industry process of translating fashion design into street wear – or from elite runway shows to department store floors – is now completely transparent to sophisticated ‘fashionistas,’ young people whose purchase influence is 24/7 mobile access to stores, stars and sources that truly reflect demand-driven impulses.”

For retailer H&M, most shipments from suppliers’ factories go directly to logistic centers in the retailer’s markets, which support stores in their geographic vicinity independently of national borders. This way, stores do not have back-up stocks, but are replenished as required from the distribution centres.

“Efficient flows and cost-consciousness at every stage are crucial to our success,” H&M explains on its website. “These factors ensure that the right goods end up in the right quantity for each store – and at the best price for customers.”

The company does not own any factories. Instead the company works with some 820 independent suppliers with whom it has long-established relationships.

Green transport options are part of H&M’s logistics mandate. “We make careful choices regarding every transport link in the supply chain from factory to store,” H&M’s website says. In 2015, around 90% of all H&M shipments are transported from suppliers to distribution centres via sea or rail.

Many apparel manufacturers, however, are finding green transport increasingly challenging, given prevailing economic regulations in the United States and economic anxiety in the Euro Zone. These factors are causing many suppliers to look for new sourcing opportunities in emerging countries despite their potential risks. As industry experts point out, many have moved from West to East, from Far East to Southeast Asia, and are now looking at Africa.

In Tunisia, the textile and garment industry comprises 1,852 companies across six sectors, including yarn spinning, finishing, knitting/hosiery and readymade garments. Production of knitted fabrics as well as readymade garments using knitted fabrics such as jersey and interlock for T-shirts and sweatshirts make up a large segment of the industry, with 1,597 companies in this segment, of which 1,381 companies export.

India has given rise in a leading textile and apparel industry. Market analyst KPMG says that the Indian textiles industry is expected to triple from US$78 billion currently to US$220 billion by 2020. Despite myriad challenges to India’s logistics sector, operators such as DHL are seizing the opportunity by offering services that cover the entire logistics value chain.

At DHL, this means track-and-trace capability to enhance shipment visibility, express services for efficient distribution of products from factory to store at competitive cost levels, as well as global trade services to provide specialist brokerage assistance. DHL has made investments in India to enhance its service facilities and upgrade air connectivity in and out of India.

But what remains a big issue with apparel and footwear manufacturers is the cost of making items in India versus other countries such as Bangladesh and Vietnam.

“It is time for the West to look at the cost of selling instead of just focusing on cost-of-purchase,” said Rahul Mehta, president of the Clothing Manufacturers Association of India (CMAI).

One of the biggest problems facing businesses in India’s capital-intensive knitwear sector is that many banks are reluctant to reduce the interest rates on loans every time the Reserve Bank of India makes a cut in repo rates. With apparels made of man-made fibers now grabbing a 60% market share globally, manufacturers in India’s knitwear industry have to invest in machinery to produce such items.

The apparel cluster in Tiruppur, India’s textile and knit wear hub that still contributes up to 85% of the country’s cotton knitwear exports, is particularly feeling the pain since lower interest rates are required to help the knitwear entrepreneurs procure high-end machinery for product diversification.

The industry there also feels that the signing of a free trade agreement with the European Union should be expedited if the apparel exports have to be increased by nullifying the duty free access enjoyed by Bangladesh, one of the main competitors of Indian products. The free trade pact is aimed at reducing or significantly eliminating tariffs on goods, facilitating trade in services and boosting investments between the two sides. The talks were started in June 2007 and, so far, 16 rounds of negotiations have been held.

Indian apparel industry officials believe that India could emerge as the largest hub for sourcing apparel and knitwear garments in the next five years, but other markets threaten India’s potential.

“With China showing more interest in the engineering and IT sectors and Bangladesh being looked at as a non-compliant country, global players, both in traditional and non-traditional markets, are eyeing India’s potential for outsourcing with great interest,” said A Shaktivel, chairman of India’s Apparel Export Promotion Council (AEPC).

By Karen E. Thuermer

Correspondent | Washington