ai q3 barometer: asia pacific, china remain unfazed by global trade uncertainty, apparel supply...
TRANSCRIPT
ASIA PACIFIC UNFAZED BY GLOBAL TRADE UNCERTAINTY, APPAREL SUPPLY CHAINS
STRUGGLE WITH RESPONSIBLE SOURCING
ASIAINSPECTION Q3 BAROMETER
HONG KONG, JULY 7, 2016
ASIAINSPECTION (AI)
A LEADING GLOBAL QUALITY CONTROL AND COMPLIANCE SERVICE PROVIDER THAT PARTNERS WITH BRANDS, RETAILERS AND IMPORTERS AROUND THE WORLD
TO SECURE, MANAGE AND OPTIMIZE THEIR SUPPLY CHAIN
today announces its 2016 Q3 Barometer, a quarterly synopsis on outsourced manufacturing and the quality control services industry.
CHINA AND ASIA PACIFIC STRONG IN THE FACE OF GLOBAL TRADE UNCERTAINTY
Growth in Asia Pacific promises to remain strong at 6%, China to retain its Q1 pace of 6.7% reflected in AI data of +7% growth in China
for Inspection and Audit volumes year-to-date.
CHINA’S CONSUMER GOODS MARKET MATURING, BUT QUALITY STILL A PROBLEM
Local production quality in China remains a struggle, as inspections performed for local brands and buyers saw failure rates increase by 28% YTD 2016 vs. 2015.
+28%YTD 2016 vs. 2015
PAKISTAN AND INDIA: APPAREL EXPORTS CLIMBING
Pakistan and India experience double-digit YOY growth in apparel export to the EU.
AI data showed a two-fold increase in product inspections over the last 12 months, while failed inspections rates rose +26% in India and +42% in Pakistan YTD.
+42%
+26%
Inspection Failure Rate Y TD Apparel Exports to EU
APPAREL MANUFACTURERS STRUGGLE WITH SOURCING AND SAFETY
A recent report slammed major brands for doing “virtually nothing” to ensure their cotton is sustainable.
Forced and child labor remains prevalent in key cotton sourcing destinations (Uzbekistan, Turkmenistan).
APPAREL MANUFACTURERS STRUGGLE WITH SOURCING AND SAFETY
One in four factories in the Bangladeshi RMG sector requires major retro-fitting remedial work, but financing remains a problem.
AI structural audit data shows that 53.3% of factories audited “Require Immediate Action” or “Need Improvement”.
53.3%“REQUIRE IMMEDIATE
ACTION” or “NEED IMPROVEMENT”
GLOBAL APPAREL AND FOOTWEAR TRADE GREW BY 5% IN 2015
Asia Pacific remains the largest regional market, while The Middle East and Africa are the most dynamic regions for apparel and footwear sales.
AI data shows a growing yet immature manufacturing base in Africa: failed inspections rate surged by 15% in 2016 YTD vs. 2015.
+15%YTD 2016 vs. 2015
SUSTAINABILITY ALSO A STRUGGLE FOR THE JEWELRY SECTOR
As the EU adopts the framework to eliminate conflict minerals, more jewelry manufacturers turn to audit programs of the Responsible Jewelry Council.
UNETHICAL LABOR PRACTICES REMAIN AN ISSUE ACROSS INDUSTRIES
AI data shows that in Q2 2016, 5.9% of ethical audits failed because of child labor, an uptick from 4.6% in Q1.
5.9%FAILED BECAUSE OF
CHILD LABOR
PRODUCT RECALLS: RAMPANT YET INEFFECTIVE
Research shows that less than 50% of product recalls are effective, due to lack of information, inconvenience, long waits, and bureaucracy.
50%INEFFECTIVE
PRODUCT RECALLS: RAMPANT YET INEFFECTIVE
According to AI lab testing data, in Q2 14% of tested products failed to comply with safety standards when tested at the source.
14%FAILED IN Q2
AsiaInspection (AI), a leading global quality control and compliance ser vice provider
that partners with Brands, Retailers and Importers around the world to secure, manage and optimize their supply chain.
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FOOTNOTES
1. http://www.worldbank.org/en/news/feature/2016/06/07/global-growth-forecast-again-revised-lower
2. http://www.focus-economics.com/regions/east-and-south-asia
3. http://atimes.com/2016/05/china-establishing-more-advanced-consumer-goods-sector/
4. http://www.just-style.com/analysis/eu-trade-trends-show-10-rise-in-clothing-imports-last-year_id128251.aspx
5. http://www.sustainablebrands.com/news_and_views/supply_chain/hannah_furlong/top_cotton_users_over_75_appear_do_virtually_nothing_sustainabili
6. http://www.just-style.com/news/map-shows-child-labour-risks-in-cotton-supply-chains_id128119.aspx
7. http://gbc-education.org/five-reasons-why-eradicating-child-labor-is-crucial-for-education/
8. http://www.ecotextile.com/2016062322198/materials-production-news/1-in-4-bangladesh-factories-face-major-remediation-costs.html
9. https://www.just-style.com/news/ten-key-trends-in-apparel-and-footwear-markets_id128169.aspx
10. http://www.fastcoexist.com/1680391/how-to-keep-conflict-minerals-out-of-your-daily-life-sort-of
11. http://www.wsj.com/articles/eu-agrees-on-measures-regulating-conflict-minerals-1466103065
12. http://www.stuff.co.nz/business/81600438/Less-than-half-of-product-recalls-work-Consumer
13. http://www.telegraph.co.uk/news/2016/06/18/faulty-tumble-dryers-cause-three-fires-a-day-and-must-be-recalle/
14. http://www.philly.com/philly/news/20160630_Can_t_get_through_on_Ikea_s_recall_hotline__We_tried_35_times__Here_s_what_happened_.html