The ASEAN region has become a global magnet for the textile industry, a sector previously dominated by mainland China and other competitors. The textile industry has become a growing driver of the global economy. In addition, rising consumer incomes will increase demand for apparel and accessories.
According to an analysis by ARC Industries, a leading market research consultancy, demand for textiles will soar as the world's population is expected to reach 8.1 billion by 2025. By mid-century, that number is expected to reach 9.5 billion, and by 2100, it will exceed 11 billion. With this growing trend, the global apparel market is expected to reach $2.1 trillion by 2025.
In Southeast Asia, the textile and apparel market is expected to grow at a compound annual growth rate (CAGR) of 8.68% during 2021-2026, reaching a total of $124.5 million by 2026.
According to a report by Statista, the women's apparel segment will become the largest market segment in 2023 with a market volume of $23.91 billion, reflecting the high interest in women's fashion styles and trends.
The projected Apparel market shows a sales volume of approximately 7.99 billion units by 2027, illustrating the growing demand in the fashion industry. In 2024, the apparel market is expected to experience a volume growth of 0.4%, indicating a steady and continuous development.
On average, each individual in the Apparel market is expected to purchase around 11.45 pieces of clothing in 2023, showing how fashion has become an integral part of everyday life.
By 2023, around 93% of sales in the apparel market will come from non-fancy goods, indicating a general preference for practical and affordable everyday wear.
In Southeast Asia alone, Vietnam generates the highest revenue from the textile industry. Based on statistics from Trading Economics, Vietnam reached $15.73 billion in 2021, surpassing second-ranked Cambodia as ASEAN's largest exporter in the sector with a value of $5.82 billion. Indonesia then ranked third with $4.35 billion. Meanwhile, mainland China exported $86.46 billion in the same year.
Thriving But Not Without Challenges
Challenges facing the textile industry include rising labor costs, automation of production, reshoring and nearshoring, and pressure to implement sustainable business models with better wages and working conditions. This creates uncertainty for the future of the industry and its workers.
David Williams, Manager of the ILO's Decent Work in Asia Garment Supply Chains Programme, explains that the relationship between wages and productivity in the sector is not always straightforward, as external factors and government policies also play a role in shaping outcomes for workers and companies.
For years, the sector has relied on low labor costs to compete in the global marketplace. While real wages have increased in most countries, working conditions remain challenging, including long and intense working hours, poor occupational health and safety, and violations of basic rights at work.
Although the Asian garment sector has a high share of wage employment and is dominated by large companies, most workers remain vulnerable because of informal conditions and temporary employment.
The gender pay gap persists in Asia's garment sector, with a high proportion of women workers in low-wage jobs. Countries with the lowest numbers of female workers also have the highest gender pay gaps in the garment sector.
However, there is still a positive relationship between labor productivity growth and wages in the sector. Investment in labor productivity can help raise workers' wages.
Reference:
Magrini, Tommaso. (2023). Southeast Asian textile Soar. itasean.org
IndustryARC. (2023). South East Asia Textile TIC Market - Forecast (2023-2028). industryarc.com
Statista. Apparel - Southeast Asia. statista.com
ILO. (2022). Asia still ‘garment factory of the world yet faces numerous challenges as industry involves. ilo.org
