Looking ahead to 2023, the fashion industry was challenged by natural disasters, high inflation, labor protests and increasing diversification of sourcing, with brands looking to reduce reliance on China and create more transparent supply chains.
Looking ahead to 2024, supply chain disruptions are expected to continue, with new sustainability and forced labor laws expected to be enacted in Europe and the US.
Analysts agree that one of the key areas for the industry moving forward is supply chain resiliency and transparency.
McKinsey & Company’s latest “State of Fashion 2024” report revealed that 70% of top procurement executives believe increased transparency with suppliers is key to navigating market turmoil. Additionally, more than half of industry executives responding to McKinsey’s survey expect to see an increase in re-shoring or near-shoring in 2024, with many saying they plan to source from multiple countries.
However, while the report argues that companies need to keep costs “tightly under control,” it also highlights that consumers are discovering new styles, tastes and priorities, which herald opportunities and point the way to value creation.
Athleisure is here to stay
Since the US government enacted the Uyghur Forced Labor Prevention Act (UFLPA) in 2022, traceability has become one of the most important factors when fashion brands look for apparel sourcing sources.
The National Council of Textile Organisations (NCTO) has called for active monitoring of customs enforcement by the UFLPA, including increased fines, to crack down on illegal trade.
Sustainability issues have also been a major theme in recent years, a trend that is expected to continue into the new year.
“We’re seeing a big shift in demand for sustainable fabrics and clothing. Driven by new technologies and the demand for sustainable fashion, materials and fabrics are undergoing major changes,” Chong says. “These include circular synthetic fillings with lower environmental impact, certified ethical down and feathers, animal wool alternatives, and plant-based fiber insulation. Sustainability will continue to evolve as consumer demand for environmentally conscious choices and ethical practices increases.”
Traceability and sustainability impact
Since the US government enacted the Uyghur Forced Labor Prevention Act (UFLPA) in 2022, traceability has become one of the most important factors for fashion brands when searching for apparel manufacturers.
The National Council of Textile Organisations (NCTO) has called for active monitoring of customs enforcement by the UFLPA, including increased fines, to crack down on illegal trade.
Sustainability issues have also been a major theme in recent years, a trend that is expected to continue into the new year.
“We are seeing a major shift in the demand for sustainable fabrics and clothing. Driven by new technologies and the demand for sustainable fashion, there has been a major shift in materials and fabrics,” Chong says. “These include circular synthetic fillings with lower environmental impact, certified ethical down and feathers, animal wool alternatives, and plant-based fiber insulation. Sustainability will continue to evolve as consumer demand for environmentally conscious choices and ethical practices increases.”
Supply chain challenges as high inflation worsens
With a presence in seven countries – Guatemala, Haiti, Indonesia, Myanmar, Nicaragua, the United States and Vietnam – Hansae is well positioned to keep its finger on the pulse of the supply chain.
Chong pointed out that next year, the industry will face supply chain challenges in three transportation segments: upstream, midstream and downstream. In 2024, demand will still be a carrier shortfall, but most carriers will try to increase cargo volume from the second quarter.
Trucking costs are expected to increase due to volatility in domestic trucking fuel prices, but customs fees in 2024 are expected to be similar to those in 2023.
Demand will increase as U.S. buyers seek to reduce costs. Ocean freight operating from Asia to U.S. coasts via trans-Pacific routes can fluctuate depending on carrier and ballast (order cancellations). However, fixed order, volume, long-term price contracts with carriers are more favorable than the current premium freight rates (FAKs) used by most small and medium-sized carriers.
Conscious consumerism leads the way
When it comes to lifestyle and fashion, Hansae predicts some clear trends for 2024.
“Conscious consumerism will continue to be a top lifestyle trend in the new year,” says Chong, “with a preference for styles that will last in their wardrobe and reflect their life cycle, such as commuter fashion. Additionally, Gen Z is most concerned with the well-being of the planet, and through social media they influence others to make sustainability-first purchasing decisions. Younger generations are willing to pay a premium for ethically produced goods and prefer to buy from sustainable brands.”
As part of its efforts to reduce its own environmental impact, Hansae launched the “10 Percent for Good” pledge campaign in 2019, donating or investing 10% of net profits from all sustainable orders to environmental organizations and sustainability initiatives.
The pledge calls for collaboration with third-party organizations on water management, green raw materials research and development, hardware upgrades, and sustainability renovations. Along with its ongoing sustainability management program, these new initiatives aim to improve the future for Hansae’s employees, partners, and customers.
Next year’s fashion trends
When it comes to the latest fashion trends, Hanse customers remain conservative, with 70-80% reserved in advance and the rest reflected in actual sales. Core items are being cut back and more fashion is being introduced. Floral and bold prints can be seen at Hanse.
“One of the trends that took off across the four cities – Milan, Paris, New York and London – was the use of floral prints,” Chung said. “Designers incorporated florals into a variety of garments, from dresses and skirts to jackets and trousers. Bold floral and painterly prints that make an impact are a must. For the Fall/Holiday 2024 season, stronger and bolder colors, including jewel tones, will become more prominent. Deep, lavish tones like emerald green, sapphire blue and amethyst purple will add a touch of glamour to outfits.”
Jun K. Chung, managing director of strategic planning at Hansei
This article was written by Jun K. Chung, Managing Director of Strategy and Planning at Hansae.
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