What next for Asian garment production?

While there remains little doubt that Asia will remain the pre-eminent global production hub post-Covid-19, shifts could occur between countries as buyers adjust their sourcing strategies, with risk becoming an increasingly important factor.

Nearshoring and onshoring have grown in importance for some buyers in recent years to accommodate the needs of fast fashion or smaller volumes, and these trends may not be affected by the pandemic.

However, production shifts may occur within the region.

"Asia is still a strategic production location due to its scale of operations, proximity to raw materials, developed infrastructure and supply chain linkages, and productive skills and know-how. These are all factors that are difficult to immediately replicate in other sourcing destinations such as Africa or Latin America while remaining cost-competitive," report authors state.

The pandemic is also likely to accelerate the uptake and adoption of technology, such as digital and analytical tools, enabling faster and more efficient production. Investments in data, in particular, are set to increase to give more control and precise information about the production process.

Meanwhile, after an initial deterioration in social and environmental standards due to company-level financial constraints, experts predict a new and more forceful phase of industry collaboration to improve longer-term sustainability.

Experts also foresee a consolidation of manufacturers, as those with less financial capital and liquidity will shut down or be bought out. A deepening divide in the sector will see some suppliers become increasingly professionalised and offer more technologically advanced production, while others may engage in a renewed 'race to the bottom' to attract buyers looking to reduce costs to offset pandemic-incurred losses.

Buyer-supplier relationships are also expected to deepen, with cutting-edge manufacturers only agreeing to work with reputable buyers with good payment histories and financial health. This may potentially shift some of the power dynamics within the industry, driving more equal partnerships.

Workers will be placed in a more precarious position post-pandemic, with increased competition for jobs in the shorter term and a possible deterioration in working conditions.

Currently accounting for about 80% of the sector's workforce, women may be crowded out in the longer term due to technological upgrading. As such, upskilling will be necessary to ensure some workers can access better jobs.

However, the pandemic may result in an expansion of social protection measures in the future as governments invest in new social contracts to boost economic resilience and protect working people from future shocks.

If combined with a renewed focus on social and environmental sustainability in the sector, this could have a transformative impact on the future of work in garment manufacturing, leading to greater resilience both for businesses and workers across Asia.

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