New destination for apparel exporters

For a long time China has been considered as production base for Indian apparel expert companies.But the scenario is changing very fast. China's on going tryst with labour reforms and shifting focus on value added products has created a different environment for the export industry. It allows countries like Cambodia, Vietnam and Bangladesh to become key players.Generally cost pressure compels the Indian companies to shift their production bases to other countries.One of the biggest advantage of these countries is the availability of cheap labour which accounts for nearly 50% of the costs for apparel exporters.Companies like House of Pearl, United Retail and Orient Craft is already operating in these countries.They all are having good price deal there which is encouraging other players to foray also.Vietnam and Indonesia saw exports go up to 4.82% and 3.95% in Nov 2008 from 3.94% and 3.73% in Nov 2007 respectively.Higher level of automation makes production faster and cheaper in these countries .Industry observers say that the cost of labour is nearly 30%-50% cheaper in these countries.Huge employment opportunity is generated in these low economies which is also a good indicator for global economy.During this tough economic condition apparel exporters are trying to sustain in the competitive market where profit margin in wafer-thin.NIKE adopted the same strategy long back to gain the competitive advantage over other rival companies and by minimizing cost of production, it gain market leadership.