Mahesh Shaw (Fibre2Fashion) –
The fashion industry is a dynamic and influential business sector that contributes significantly to individual self-expression and aesthetic enhancement. However, it is also widely criticised for its substantial environmental impact and exploitative labour practices. This sector provides employment to a large number of people across the globe. According to a report by Uniform Market, the global apparel market is valued at $1.84 trillion, which accounts for 1.6 per cent of the world’s GDP, and the market is expected to grow at a CAGR of 2.81 per cent between 2025 and 2028.
Following globalisation in the 1990s, the manufacturing of textiles and apparel increasingly shifted to developing countries, notably in Asia, Southeast Asia, and Africa. This transition was primarily driven by the pursuit of lower production costs, enabled by access to inexpensive labour and the benefits of economies of scale. Such strategic relocation allows fashion brands to enhance cost competitiveness and achieve better profit margins.
However, as the fashion industry evolves, sourcing—the most critical process in the fashion supply business—must also adapt. Traditionally, sourcing the right fabrics at the right costs has been a game-changer. Yet, in today’s context, where consumers are more conscious of sustainability, climate change demands urgent attention, and emerging technologies such as Blockchain, AI & ML, AR/VR, and the metaverse reshape operations, the definition of effective sourcing is expanding. Coupled with the influence of social media, dynamic geopolitical shifts, and concerns about economic slowdown, the fashion business must now move beyond traditional sourcing models to remain competitive and responsible. Some of the sourcing trends are briefly discussed below:
Sustainability-focused business
The textile and clothing industries create enormous environmental pollution associated with soil, water and air pollution. The other serious environmental issue is the burden of disposing of post-consumer clothing waste. The release of microplastics to the environment has also become a serious concern. As per some estimates, this sector annually consumes around 93 billion cubic metres of water, generates up to 8 per cent of global greenhouse gas emissions and nearly 9 per cent of microplastic pollution flowing into the oceans. The greenhouse gas emission is expected to increase by 30 per cent by 2030 if no further corrective actions are taken. So, there is an urgent need to address these issues.
Big fashion brands like H&M, Gap, and many others have set targets to become carbon neutral by 2030. Achieving this goal requires investment in the development of eco-friendly materials and processes, as well as close collaboration with suppliers and other stakeholders. On their part, suppliers should be encouraged to proactively contribute towards these shared sustainability objectives.
Adopting a circular economy is also essential to address the growing issue of post-consumer textile waste. This calls for the establishment of systems that support a reverse supply chain and facilities that can convert textile waste into useful products. As a result, current trends are shifting towards recycled, regenerative, organic, and eco-friendly textile materials.
Additionally, suppliers are encouraged to obtain certifications such as OEKO-TEX, GOTS, Bluesign, and Fair Trade, which verify chemical-free, environmentally responsible production and ethical labour practices.
Environmental and social concerns pose serious risks to the supply chain and can adversely impact business operations. Therefore, fashion brands must actively work with their suppliers to address these challenges and mitigate associated risks.
Smaller lot size and shorter lead times
Consumers demand a large variety of products. This has led the fashion brands to offer a wide variety of products in terms of size, fits, colours, design, and styles to suit the diverse requirements of consumers. For this, fashion brands work on smaller lots and shorter lead times. It is a well-known fact that the textile and clothing supply chain is long and very complex. Meeting small lots and short lead times is a challenge. For this, the supply chain must work together utilising technologies to predict demand as accurately as possible and back integration to get the desired output in the desired time. AI and machine learning can be used to analyse sales data to a great granular level for demand prediction as accurately as possible. Data-driven demand prediction can help the brand to develop designs and products to fulfil the market demands and make appropriate planning backwards. Data analytics can be used to understand cost trends over time and identify opportunities for cost optimisation. Digital prototyping, virtual product development, sample approvals, and quality inspections enable quicker decision-making, thereby helping to reduce lead times. The focus is increasingly on making the supply chain agile to meet customer demands and manage unforeseen situations and disruptions.
Supply chain visibility
Supply chain digitisation enables seamless visibility of information across the entire supply network. Technologies such as RFID can digitise the production line by capturing real-time data on inventory, work-in-progress, and raw materials across production facilities. Real-time information and data analytics help identify bottlenecks and implement timely solutions to prevent supply chain disruptions.
Additionally, blockchain-based technology can enhance traceability of materials used in the final product and provide visibility into fair labour practices. It aids in detecting and preventing forced labour, thereby ensuring ethical sourcing, authenticating genuine products, and giving consumers confidence that the products they purchase are ethically produced and that workers are treated fairly.
Dynamic geopolitical and economic scenario
Geopolitics has remained a significant factor in making strategic sourcing decisions. The recent imposition of tariffs by the US government has disrupted the fashion supply chain. China has become a costly sourcing destination, whereas India has emerged as an attractive alternative. A free trade agreement between two countries—particularly between a developed and a developing nation—offers a highly favourable proposition for industry growth.
For example, the recent free trade agreement between India and the UK is expected to boost bilateral trade, attract investment, and accelerate the growth of the textile and apparel sector in India. The trade of apparel and home textiles is projected to double within the next 5–6 years as a result of this agreement. Additionally, concerns about a potential global economic slowdown and shifting consumer preferences continue to significantly influence strategic sourcing decisions.
Value shift and changing preference of young consumers
Macroeconomic pressures and rising prices are driving fashion shoppers to become more cost-conscious. Consumers are increasingly inclined to purchase clothing that offers greater value for the price they are willing to pay. Additionally, the younger generation exhibits dynamic purchasing behaviour, with distinct preferences for comfort, fit, style, and personal values.
Brands must take these factors into account to offer the right products at the right prices, effectively meeting the needs of value-driven consumers. Failure to do so may result in unsold inventories or the need to sell merchandise at discounted prices, which can negatively impact the bottom line.
