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Buyers look for sourcing alternatives in South Asia

Staff Correspondent
18 Oct 2021 00:00:00 | Update: 18 Oct 2021 02:14:56
Buyers look for sourcing alternatives in South Asia

Low supply chain in China and closer of factories in Vietnam are prompting the European and US buyers, especially US-based ones, to look for an alternative for sourcing and South Asia are now playing a vital role to meet their demand, says a report.

The Quality Inspection Management, better known as QIMA, in its quarterly report titled “Q4 2021 Barometer: Can South Asia Sourcing Save the Holiday Season from Supply Chain Chaos?” published on October 12 revealed this information.

QIMA, operating in 85 countries, is quality control, supplier auditor, and product testing and inspection provider. It helps more than 15,000 global brands, retailers, manufacturers, and food growers to achieve quality excellence.

“Vietnam shows a contraction in every month of Q3, starting with -5.5 per cent year on year in July, then plummeting to -45 per cent year on year and -52 per cent year on year in August and September respectively. Compared to pre-pandemic 2019, inspection and audit demand in Vietnam contracted -36.5 per cent in Q3 2021. In a country where garment and footwear make up the majority of the exports, over one-third of apparel factories temporarily closed in recent weeks,” the report said.

The report said that for the problems in South-East Asia, Bangladesh get 88 per cent in August and 108 per cent in September order growth from US-based buyers compared to the corresponding month of 2019.

“After being hit hard by Covid-19 earlier in the year, India saw inspection and audit volumes surge +67 per cent in Q3 2021 compared to the pre-pandemic period,” the report said adding that demand was particularly strong among US-based buyers, with September demand more than doubling from 2019 levels.

The industry insiders, however, said that the buyers came to Bangladesh on a trial basis due to supply chain disruption and Bangladesh is dependent on others to meet raw materials demand.

“If the buyers face the same problem in Bangladesh, they will return to their previous sourcing country or India. So, if we want to make them permanent buyers, we should increase our supply chain capacity,” Kazi Iftekhar Hossain, President of Bangladesh Garment Buying House Association, told The Business Post.

“We are manufacturing 75 per cent cotton-based apparel goods. If we switch to manmade fibre, it will make us competitive as China, Vietnam and India too import raw materials. So, it is the time to invest in manmade fibre to make a strong supply chain,” he said.

The QIMA said that while South Asia is a time-tested sourcing hub for textiles and apparel, demand for its manufacturing capacities was not limited to this product category and QIMA data for Q3 2021 shows growth across a wide variety of consumer products, including homewares and gardenware, food containers and toys.

“After six consecutive months of deterioration in ethical compliance, data gathered by QIMA auditors shows a +5 per cent uptick in factory ethical scores in Q3 2021 compared to the previous quarter,” the report said.

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