Although the external procurement strategies of American clothing companies will not suddenly change, they will gradually adapt to the constantly changing business environment in 2024.
Firstly, in addition to traditional procurement considerations such as cost, speed to market, and compliance, American clothing companies will increasingly focus on the flexibility and agility of supplier selection. Under the premise of economic uncertainty, international organizations such as the World Bank and the International Monetary Fund (IMF) have stated that clothing companies need to rely on more flexible and agile supply chains to cope with uncertainty and reduce unpredictable procurement risks. In addition, serious supply chain disruptions have been caused by external factors such as geopolitical conflicts. It is expected that the global economic growth in 2024 may still be relatively slow, with a growth rate of approximately 2.6% -3%.
Secondly, in 2024, clothing companies may further reduce their investment in China to varying degrees, which is worth noting. On the one hand, clothing companies are trying to reduce their purchases of finished clothing from China as much as possible. However, some fashion brands and retailers also acknowledge that it is difficult to find small and diverse alternative sources similar to China in the short to medium term in terms of textile raw materials and required orders. At the same time, investment from China is flowing into regions considered alternative procurement destinations, such as other parts of Asia and Central America. These new investments may complicate efforts to restrict investment in China and potentially strengthen China's position in the clothing supply chain, rather than further weakening it. The perspective of stakeholders on "Chinese investment" appears more subtle and complex.
Thirdly, regulations within the United States may have a more significant impact on the procurement practices of clothing companies in 2024, particularly in areas related to sustainable development. Taking textile recycling as an example, the US Federal Trade Commission's Green Guidelines (Extended Edition), the EU's Extended Producer Responsibility (EPR) program and its Sustainable Textile Strategy, as well as many state level legislation on textile waste (such as the California Textile Association's recycling legislation), may all affect the production and procurement practices of companies for such products. The procurement, legal, and sustainable development teams of clothing companies need to collaborate more closely to ensure the provision of sustainable clothing.
In addition, the slow or stagnant global economic growth in 2024 will still be a major challenge for clothing companies. If orders cannot be obtained from fashion brands and retailers, many small and medium-sized manufacturers in developing countries may find it difficult to survive, leading to a precarious income situation for workers in the clothing industry. The slowdown of the Chinese economy may worsen the situation, as many developing countries increasingly see China as an emerging export market. With domestic demand shrinking, more "Made in China" clothing may enter the international market, intensifying the intensity of price competition.
On the positive side, it is encouraging that clothing companies continue to invest in new technologies to improve the operational efficiency of clothing procurement. Digital product passports, 3D product design, Product Lifecycle Management (PLM), Blockchain, Generative Artificial Intelligence, and various supply chain traceability tools are a series of technologies actively explored by clothing companies. Clothing companies hope to use these tools to improve supply chain transparency, strengthen relationships with major suppliers, reduce textile waste, accelerate product development, and achieve investment returns.
Now is also a critical moment for rethinking and reforming fashion education. In addition to traditional courses such as clothing design and marketing, we also need to establish more collaborative relationships between the clothing industry and educational institutions, allowing students to be exposed to the real world. More direct contact with Generation Z will also benefit clothing companies greatly, enabling them to understand future core customers and cultivate qualified next generation talents.
