Production

Why Australian brands are looking at Vietnam for fashion production

Sorry… the not so interesting topic of… import duties.   Bear with me, it will be short and sweet!  In Australia any parcel received with a declared value of over $1000 is subject to import duties. The year 2018 marked the 45th anniversary of the establishment of diplomatic relations between Vietnam and Australia and since then trade between the countries has grown steadily, exports of Vietnamese goods and services to Australia grew by 17.6 percent year-on-year in 2017, to US$4.9 billion, making Australia is Vietnam’s eighth largest trading partner. 

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Free trade agreements are the major drivers of trade and investment between the two nations. Australia will reduce all of its tariffs to zero percent by 2020, under the tariff schedule of the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA). In addition, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will further strengthen bilateral trade ties.

Now, the part we particularly care about here at Source Studio -  garments in particular, will hugely benefit from CPTPP, with Vietnamese exports to Australia predicted to grow by double digits. Once the CPTPP comes into effect, Australia will reduce import duties to five percent. From the fourth year, it will be reduced to zero percent for almost all the products.

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Vietnam is the ideal place for Australian brands to place their production focus. If they haven´t already.  But what about Australia´s emerging brands, the ones with lower volumes? Is there a place for them as well in Vietnam? Or are they left with an ever bigger chasm between producing in a cottage industry manner in Indonesia, (for many, Bali) and being able to move up the ladder to work with professional factories?

Vietnam has a growing mid to high end sector with volumes as low as 50 MOQ on womens and men´s fashion.  While the factories are few, here at Source Studio we have worked alongside these factories in the past 10 years and both witnessed and guided the growth of this niche market.  The garments are of high quality, shown at international Fashion Weeks and sold in reputable department stores such as the UK´s Selfridges or the iconic Browns, Moda Operandi and many other international retailers.  The notoriously strict quality Japanese retailers are also buying in Vietnam, one factory is producing jumpers retailing in Japan at $500+.

Do you know the story behind little rivets on your jeans?

While industry experts surely know the answer, we find that non denim experts do not and find this bit of information rather interesting.

This season jeans are coming back and there doesn´t seem to be any end in sight. Certainly jeans is a garment of which we all have at least one pair in our closet. But have you ever noticed little silver or copper studs all over your jeans and wonder why they are there?

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These are rivets, which are round mental attachments that are especially placed on areas of the jeans that are most likely to be pulled apart by strain or movement and they help hold the fabric together, therefore making them last longer.

These little pieces play an important role in the development of jeans as we see them today. Although denim trousers had been used for many years previously due to the strength of the denim, it was the creation of rivets that led to them becoming a workman´s jeans which then years later became a fashion item.  

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Here is the story of the evolution of your jeans.

In the 1870s, denim was commonly worn by labour workers, but despite the strong denim weave, they were still not resisting strains they were put under during hard labour, namely ripping at the seams. As a result, a miner’s wife in the Reno area, tired of sewing her busband´s trousers together, took them to Jacob Davis, a tailor, and asked if he could fix this problem. Mr Davis came up with the idea of putting rivets on the areas that endured the most strain, such as pocket corners and the base of the fly. The rivets helped hold the fabric together, and meant the trousers were less likely to tear.

In 1873, Davis set up a partnership with Levi Strauss, who he usually purchased the denim fabric from. Together they acquired a patent for “improvement in fastening pocket-openings.” Levi Strauss was the first company to manufacture riveted pants in the 1800s.

After that, bar tacks — “a necessary anchor placed at the top and bottom of a belt loop” — and zippers are other essential elements that have been added to jeans over time.

 

Reference:

http://www.businessinsider.com/tiny-buttons-rivets-jeans-2016-11

https://www.independent.co.uk/life-style/fashion/those-tiny-bits-of-metal-on-your-jeans-pockets-are-actually-really-important-a6998821.html

 http://www.historyofjeans.com/

https://www.self.com/story/purpose-of-tiny-buttons-on-jeans-rivets

Production abroad or at home?

Finding the right manufacturing partner for your business is essential and can mean the difference between success or failure.

Designer Showrooms BFC London

Designer Showrooms BFC London

When you start a creative business, one of the last things on your mind is logistics. Your head is too full of colours, designs, mood boards and ideas to spare much room for the less exciting stuff. But, as everyone knows deep down, the boring bits are what keeps a business thriving. And when it comes to clothes, nailing your production process might not be the most glamorous task, but it’s certainly the most vital.

Here at Source Studio we produce everything in Vietnam. However, this is not the best solution for all designers. If you are in the very early stages, say seasons 1-3, your volumes are likely low. You probably do not have much experience yet in managing production, or the sampling process and you probably cannot buy full rolls of fabric and are relying on retailers locally to supply you. 

At this stage it makes sense to produce close to home. Any price advantage you would have from producing abroad is likely eroded by time consumed in learning to work with a new supplier abroad. Plus, if you only really need 80m of fabric but are having to buy 120m, even if the fabric is cheaper and the production is cheaper, the fabric wastage probably means that you did not actually make any savings and hence your RRP is unaffected.

However, if you are producing already 50+ units per style, perhaps you are using one fabric for 2 pieces, let’s say a skirt and a blouse, then you are likely using your 120m of fabric. And in this case it is time to compare costs. Would you benefit from moving your production at this stage? You should be looking for a saving of 20-30%. And that can make a big difference on your market positioning, or your margin!

Source Studio Sampling & Production

The factors to consider are:

Would lower prices to my customers help grow my business?

Would I benefit from more fabric variety being available to me?

Can my quality of construction improve?

Can my delivery times be improved?

Often the answers to the above are yes. In the west we are no longer experts in clothes manufacturing and most larger brands will produce abroad for all of the above reasons. However, production abroad has traditionally been limited to companies able to produce over 500 units of each style.

At Source Studio we have spent the last 6 years working with factories in Vietnam to create a network of high quality suppliers who are happy to work with low volumes. Why? Because we represent many designers at the same time and therefore negotiate with our partner factories. It is easier for them to work via Source Studio because we have been doing so together for years, they know that we prep designers so that the process is as simplified as possible, we source the fabric and trims and we help make sure each product is in perfect condition. It is a win-win for the designer who benefits from the lower prices and higher quality and for the factory who can take on more orders, without the “headaches” of teaching a designer how to work with them, how to present information and stick to necessary timeframes in the production process.

We usually work with designers producing volumes of 50-200 units per style. Have a look at our website Source Studio or send us an email to know more about our services, processes and timeframes and how it can help your business.

VIETNAM as ASIA'S NEXT BIG SUCCESSFUL STORY

At Source Studio we are often asked why we chose #Vietnam as our #manufacturing base.

Here the #Business of #Fashion lays down some of the reasons we chose to focus on Vietnam for our fashion production:
Like South Korea, Taiwan and China before it, Vietnam is piecing together the right mix of ingredients for rapid, sustained growth.

Vietnam Manufacturing

Vietnam Manufacturing

Vietnam’s workforce is not just young but skilled. In global rankings, 15-year- olds in Vietnam beat those in America and Britain in maths and science. That pays dividends in its factories. At Saitex, a high-end denim manufacturer, workers must handle complex machinery—from lasers to nano-bubble washers—all to produce the worn jeans so popular in the West.

Vietnam is reaping benefits from trade deals. It is set to be the biggest beneficiary of the Trans-Pacific Partnership and a free-trade pact with the EU is in the works for 2017.

Vietnam already has a strong, often underappreciated, record. Since 1990 its growth has averaged nearly 6% a year per person, second only to China.

A relatively young population adds to Vietnam’s appeal. Whereas China’s median age is 36, Vietnam’s is 30.7.

Investors have also taken heart from the stability of Vietnam’s long-term planning.

Like China, it has used five-year plans as rough blueprints for development.

More information