Voice of Commonwealth

Textile industry expansion prospects

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By Wasana Nadeeshani Sellahewa

(Commonwealth) _ Pakistan’s textile sector is one of its most profitable, accounting for more than 60% of the country’s overall exports. Pakistan, known for its raw cotton and finished textile goods, has a significant potential for economic growth through its textile sector. Local suppliers have benefited from the diversion, with textile exports reaching an all-time high in 2021, with a 36% rise in Y-O-Y growth in knitwear, 32% in towel, and 19% in readymade clothes. Because worldwide demand for clothing and lifestyle items is predicted to expand at an astounding 8% CAGR from 2022 to 2026, Pakistan has the potential to become a leading garment exporter. Globally, the country is ranked among the top.

The country is one of the top 10 garment exporters in the world, as well as the fourth largest producer and third largest user of cotton. Local clothing businesses such as Khaadi, Saphhire, Junaid Jamshed, Bin Saeed, Charizma, and others have seen tremendous success and have expanded their market reach internationally. Some have created clothing stores in foreign countries, while others prefer to ship globally. Furthermore, well-known companies such as Adidas, Zara, H&M, Next, Mango, Forever21, and others have outsourced their clothing manufacture to Pakistan. What are the demand drivers, obstacles, and possibilities for growth in Pakistan’s textile industry? Let we investigate these. Pakistan now has the greatest pace of urbanization in South Asia, with metropolitan cities housing more than 35% of the population. Rapid urbanization, improved economic prosperity, and more e-commerce penetration are expected to raise living standards and household incomes, increasing average expenditure on clothes and leisure in the country.

Furthermore, the country’s consumer group has grown with the inclusion of newer generations such as the expanding millennial and Gen Z populations. Their presence is particularly noticeable in the social media effect on marketing efforts, with businesses advertising their products through these platforms, reaching a large number of younger capable purchasers. It is also quite fascinating to see the local development in the number of women in the workforce in Pakistan, which has contributed to the country’s growth in the number of customers. Women account for more than half of all apparel purchases, highlighting their purchasing power. As more women enter the labor sector in the country, garment sales are expected to rise in tandem.

Weaknesses in your supply chain and its management might derail expected development in exports and local consumption of clothing and leisure items. The lead times for garment retail in Pakistan are frequently on the longer side, which can become a concern as the country intends to significantly increase its textile exports by 2025 through investments and efforts. Delays caused by convoluted customs laws may lengthen the time it takes to deliver cargo. Furthermore, Pakistan’s decision to locate apparel production inland rather than in Export Processing Zones, combined with poor road and rail network facilities and a lack of electricity, may cause delays in transporting shipments on time, resulting in consumer dissatisfaction and eventual business loss.

In conjunction with the old method of a fragmented supply chain, businesses have suffered increased complexity and inefficiencies in their supply chain, resulting in product delivery delays and additional unplanned expenditures. As a result, the end-to-end cargo journey should be considered as a single unit, and organizations should focus on increasing supply chain agility, transparency, and resilience to assure their development and success. The government has already launched efforts to improve the textile industry, which gives enough opportunity for expansion for enterprises in the sector. The Textiles & Apparel Policy 2020-2025 aims to drive Pakistan’s textile-based economy to a significant margin by 2025 by enhancing production capabilities, producing higher value-added textile products, adhering to global compliance standards, reducing wastage, streamlining the supply chain, and leveraging better technology.

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