An Overview of Indonesia Fashion Industry and Their Respective Growth
The world is
rapidly growing in terms of population and business and the fashion industry is
being developed due to the growing population. Indonesia fashion industry has a
significant growth due to the low cost labor and available resources. A
significant group of people are gaining financial freedom to buy things they
want to wear.
Clothing as
a fundamental right, people all over the world are being able to afford new
cloths all the time. And the growing desire for the new and fashionable cloths
are at its pick. According to the growing need of apparel products, Indonesia
is competing with other leading manufacturer in the world.
Indonesia is
one of the top 10 garments manufacturer in the world and doing really well in
exporting ready-made garments and textile products.
Despite the
struggle, the growth of Indonesia fashion industry is remarkable. The low cost
labor and available resources are facilitating the industry enormously and
helping the country contributing to the country’s economy.
How big is the Indonesia fashion
industry?
According to
Indonesian ministry of trade, Indonesia earned a significant amount from
exporting garments and textile related products. To specify, Indonesia fashion
industry contributed 8.5% of the total export in 2017 and able to earn 11.8
billion dollars of foreign exchange. They do not only export T&A products,
but they also import a huge amount of goods. In 2017 Indonesia imported T&A
goods worth 8.9 billion dollars. So in terms of export and import they are one
of the largest contributor in the world fashion industry.
The Growth
Whereas
china as a global leader controls 35% of the global garments industry,
Indonesia is contributing only 2% in the global fashion industry. By 2030 the
country is expected to increase annual production to 6% which may earn them $75
billion dollars.
Though the
labor cost is not that high but in near future they have to cope up with the
rising minimum wages. As china is struggling to increase their fashion industry
due to the increasing labor cost, Indonesia will also be falling into the same
trouble.
What is interrupting the growth?
Their growth
is as lower as they ever encountered before. The minimum cost of labor is
growing but that is not the biggest problem.
The biggest
problem is they have limited resources and raw materials. Due to the lack of
raw materials they need to import almost all the raw materials required to grow
their fashion industry.
Apart from
other raw materials Indonesia mostly rely on cotton products. Indonesia
produces cotton but for the best quality cotton, they import form USA and other
cotton manufacturing countries. And the import is stopping their growth.
Free Trade Deal
Indonesian
manufacturers are suffering from free trade deals which is not yet approved by
the government. The required growth is being delayed for the investment environment.
The experts say that it would boost the production and the Indonesia fashion
industry growth if they had a free trade deal and better investment
environment. Without free investment it will not be possible for Indonesia to
grow in their desired size in the global market.
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