The end of Q2 was marked by the World Bank’s recent revision of its global growth forecast at 2.4%, as the 2016 global trade outlook remains conservative, with extra uncertainty added by the UK’s intention to leave the EU.iAgainst this background, growth in Asia Pacific promises to remain strong at 6%, economists say, with China predicted to retain its steady pace of 6.7%.ii Indeed, QIMA saw +7% growth in China for Inspection and Audit volumes year-to-date.
Local consumption is expected to drive China’s growth as the government plans on making available more varieties of higher-end consumer goods, enhancing product designs, and encouraging major domestic producers to meet international quality standards.iii QIMA data shows that local production quality remains a struggle: inspections performed in China for local brands and buyers saw failure rates increase by +28% YTD 2016 vs. 2015.
Elsewhere in Asia, trade activity also strengthened in India and Pakistan where QIMA data shows a two-fold increase in product inspection volumes over the last 12 months. As local apparel manufacturing powerhouses, both countries experienced double-digit YOY growth in export value for clothing and textile to the EU, according to recently published 2015 year-end figures.iv Quality trends remain a worry though, as failed inspections rate rose +26% in India and +42% in Pakistan year-to-date.
Responsible practices and sustainable sourcing remain a challenge for apparel brands. Cotton sourcing practices in particular were in the spotlight in a recent report which slammed many major brands for doing “virtually nothing” to ensure their cotton is sustainable.v Forced and child labor are a particular risk to apparel supply chains, and top cotton exporters including Uzbekistan and Turkmenistan are highlighted for doing little to enforce the conventions they sign.vi The same research demonstrates the correlation between child labor risk and sufficient adult wages.
“Child labor can trap multiple generations in poverty,” said Sebastien Breteau, QIMA CEO. “At AI, during our Audits, we witness this vicious cycle on the ground, further perpetuated by the lack of access to quality and free education. That is why we are keen to align our efforts with initiatives such as the Global Business Council for Education, and hope to go one step beyond in helping eradicate child labor.”vii
Meanwhile, progress in structural safety of apparel supply chains also remains slow. Despite the recent strides made by the Bangladeshi RMG sector, according to a report by the ILO and IFC, one in four factories requires extensive retro-fitting remedial work.viii
QIMA's data on structural audits for Q2 2016 concurs and indicates a worrying trend: 53.3% of all factories audited were ranked as “Immediate Action Required” or “Need Improvement”.
While sourcing challenges remain, recent research shows the global apparel and footwear sector continues growing, and the most dynamic regions are the Middle East and Africa, where sales of apparel and footwear are poised to hit USD 134 bn. by 2020.ix Africa in particular deserves attention, as apparel and footwear manufacturers have already realized its potential for sourcing, and now its consumer base, largely a younger and tech-savvy demographic, is also showing great promise.
QIMA data indicates that while the manufacturing base in Africa is growing, it is still immature: inspection demand saw +61% growth year-on-year, but at the same time failed inspections rate surged by +15% in 2016 YTD versus last year.
Other industries are not exempt from responsible sourcing issues. The jewelry industry, for instance, sees sustainability efforts gaining momentum with the audit program for jewelers launched by the Responsible Jewellery Council.x As the EU recently adopted the framework to curb trade in conflict minerals,xi this program’s membership is poised to increase further.
Across industries, QIMA data shows that unethical labor practices remain among the most pressing issues discovered during ethical audits: in Q2 2016, 5.9% of audits failed in the “Child Labor” section, an uptick from the Q1 figure of 4.6%.
Recent research by a New Zealand consumer association shows that less than 50% of product recalls achieve the desired effect.xii The reasons behind this range from lack of consumer awareness to lengthy and inconvenient recall procedures. A clear example of this is the ongoing massive recall of 4.3 million tumble driers in the UK due to fire hazard. While the recall was announced in October 2015, the problem persists today, as consumers seem reluctant to overcome the hassle of returning the product.xiii IKEA, in its recent furniture recall triggered by a design failure that proved lethal, attempted to be more consumer-friendly and offered to pick up the furniture from the consumers’ homes. However, considering the scale of recall – some 29 million chests and dressers – IKEA’s recall phone lines were simply unable to handle the traffic.xiv
Meanwhile, QIMA Lab Testing results evidence that in Q2 14% of all tested products failed to comply with safety standards when tested at the source, when brands and buyers can still address and correct issues before products get shipped. Given this scale of quality failures and the obvious ineffectiveness of recalls, the cost-saving and reputational value of preventive quality control is more apparent than ever.
Tel: (+852) 3543 1684
i. Global Growth Forecast Again Revised Lower to 2.4%
ii. Economic Snapshot for East & South Asia
iii. China establishing more advanced consumer goods sector
iv. EU trade trends show 10% rise in clothing imports last year
v. Of Top Cotton Users, Over 75% ‘Appear to Do Virtually Nothing’ on Cotton Sustainability
vi. Map shows child labour risks in cotton supply chains
vii. Five reasons why eradicating child labor is crucial for education
viii. One in four Bangladesh factories face major remediation costs
ix. Ten key trends in apparel and footwear markets
x. How To Keep Conflict Minerals Out Of Your Daily Life (Sort Of)
xi. EU Agrees on Measures Regulating Conflict Minerals
xii. Less than half of product recalls work: Consumer
xiii. Faulty tumble dryers cause three fires a day and must be recalled', fire services warn
xiv. Can't get through on Ikea's recall hotline? We tried 35 times. Here's what happened.
|Questo sito è protetto dalle normative in materia di diritto d'autore e di diritto dei marchi commerciali, sulla base della legislazione USA ed internazionale.|
|QIMA © 2022|
ClientID:; Client:; Affiliate:;