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AI 2014 Q1 Barometer

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AI 2014 Q1 Barometer

AI 2014 Q1 Barometer

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  • 1. China This dragon isn’t sleeping AsiaInspection Q1 Barometer April 8th 2014
  • 2. a quarterly synopsis on outsourced manufacturing and the quality control services industry. AsiaInspection Presents the 2014 Q1 Barometer AsiaInspection, A leading provider of quality control services for businesses importing from Asia, Africa, Southern Europe and Latin America
  • 3. The media has been reporting that the Chinese economy is on the brink of slowdown. but China continues to be the dominant sourcing region by sheer volume. December and January set new records for total exports, surpassing $207bn in both months.1 CHINA EXPORTS REACH ALL-TIME HIGH $ 207 bn
  • 4. +9% China Export Figures Per Three Months (USD Billion) Nov 12 Jan 13 Feb 13 Apr 13 May 13 Jul 13 Aug 13 Oct 13 Nov 13 Jan 14 0 50 100 150 200 566 509 543 562 +9% / Y-1 619 Adjusting for the Chinese New Year holiday by comparing November through January 2013/2014, total Chinese exports increased compared with the same period in 2012/2013.
  • 5. AsiaInspection figures surpassed this with year over year growth of +12%+12% +12% for ordered inspections within China. More telling and perhaps a leading indicator of the export figures to come, March was up +26.2% compared with the year before.
  • 6. Why the increase? In Q1 the Chinese Yuan had the first major currency reprieve since 2005, depreciating 2.7% China has continued to preserve a healthy balance of wages, a developed infrastructure and the world’s largest workforce.
  • 7. CHINA PLUS ONE South & Southeast Asian countries have offered opportunities to reduce labor costs. Though their respective economies are much smaller, emerging markets were the clear winners in percentage growth.
  • 8. Inspection Figures by Country 2014 Q1 vs. 2013 Q1 Source: AsiaInspection Inspection Figures Bangladesh Vietnam Cambodia Indonesia India China +70% +32% +22% +16% +12% +57% AsiaInspection
  • 9. despite unrest in the apparel industry which has a resulted in protests across the country escalating in January when police fired upon protestors Cambodia Increased 32% people killed people wounded 2 4 38
  • 10. In Indonesia, where the textile industry is set to become the country’s largest export segment, inspections were up +22%
  • 11. There has been a growing awareness and demand from the consumer not only for a high quality product, but a high quality supply chain. AsiaInspection’s 2014 Q1 data shows a year-on-year increase in Ethical and Manufacturing Audits in Asia BRANDS & RETAILERS TAKE CONTROLOF THEIR SUPPLY CHAIN +156% Ethical & Manufacturing Audits
  • 12. An increasing practice is to interweave Ethical Audit Programs with on-site product inspections to ensure manufacturing actually occurs at an approved factory. Rana Plaza highlighted how factories often illegally sub contract out orders after major retailers reported that their products were never authorized to be manufactured there.
  • 13. There’s notable traction taking hold in supply chains worldwide: Governments moving forward on legislation Corporations putting their money where their mouths are ““ ““ Sebastien Breteau, CEO of AsiaInspection
  • 14. The American Chamber of Commerce surveyed 400 member companies sourcing from China and found that 40% have plans to spend significantly more on ethical compliance.3 EU based companies are facing stricter guidelines that require them to report on their policies regarding ethical issues, corruption and the risks they pose to human rights throughout their supply chains.4
  • 15. during a factory fire in Hangzhou 5 in a factory blaze outside of Shantou in the Guangdong province 6 Workers killed Workers killed 1616 1111 China has not been exempt from ethical compliance issues. In Q1:
  • 16. Low cost labor intensive manufacturing is on the rise in Africa AFRICA,ANUP-AND-COMING SOURCING REGION AsiaInspection ordered inspections were up +65% year over year The American Apparel & Footwear Association reports that companies are choosing to invest in manufacturing for markets such as South Africa, closer to the destined consumer market rather than in Asia 7
  • 17. Ethiopia, a leader in terms of foreign investment is aiming for an export goal of as part of the four year Growth and Transformation Plan 8 Over the next 20 years Africa also represents the greatest population growth potential providing both labor and end customers to companies planning for the long term US$ 1 billion in 2014
  • 18. Dedicated Account Manager A supply chain partner offering advice on your specific needs Comprehensive Online Management Use your real-time dashboard to benchmark and identify your high performing suppliers Product Expertise Hundreds of off-the-shelf customizable product specific checklists Mobile Book, check reports and make decisions on the go Industry Leading Turnaround Onsite within 48 hours. Reports the same day 80% of the time Flexible Cancel or modify orders up to 4pm the day before the inspection for free Trusted and Truly Independent 100% QC. AI is not involved in sourcing and protects your factory information All-Inclusive Pricing Easy to budget. No hidden costs ... AI serves 2,700 clients with twenty offices worldwide... AI serves more than 3,000 clients with twenty offices worldwide ABOUT ASIAINSPECTION YOUR EYES INTHE FACTORY™ ABOUT ASIAINSPECTION YOUR EYES INTHE FACTORY™
  • 19. 1 / Trading Economics. China Exports. April 2nd, 2014 http://www.tradingeconomics.com/china/exports 2 / CNN. At least 3 dead after Cambodian security forces open fire on protesters. January 3, 2014 http://edition.cnn.com/2014/01/03/world/asia/cambodia-protests/ 3 / The Sourcing Journal Online. New Study: Costs of Compliance in China Expected to Rise. April 2nd, 2014 https://www.sourcingjournalonline.com/new-study-costs-compliance-china-expected-rise-ik/ 4 / The Guardian. EU to force large companies to report on environmental and social impacts. April 2nd, 2014 http://www.theguardian.com/sustainable-business/eu-reform-listed-companies-report-environmental-social-impact 5 / China Daily. 16 dead, 5 injured in China factory fire. January 14th, 2014 http://europe.chinadaily.com.cn/china/2014-01/14/content_17235557.htm 6 / South China Morning Post. 11 dead, six injured in Guangdong factory blaze. March 27th, 2014 http://www.scmp.com/news/china/article/1458357/11-dead-six-injured-guangdong-factory-blaze 7 / Just Style. Analysis: Is Africa the next frontier in apparel sourcing?. April 2nd, 2014 http://www.just-style.com/analysis/is-africa-the-next-frontier-in-apparel-sourcing_id120902.aspx 8 / Just Style. Ethiopia a rising star for sourcing garments. March 6th, 2014 http://www.just-style.com/analysis/ethiopia-a-rising-star-for-sourcing-garments_id120731.aspx Footnotes
  • 20. W W W. A S I A I N S P E C T I O N . C O MW W W. A S I A I N S P E C T I O N . C O M Twitter.com/asiainspection Facebook.com/asiainspection Linkedin.com/company/asiainspection