Q2 2016 brings a lot of uncertainty to global trade, but China and Asia Pacific appear unfazed. Meanwhile, global apparel supply chains still struggle with safety and unethical labor practices, while massive product recalls emphasize the importance of quality control. Read more in AI’s Q3 barometer

1. ASIA PACIFIC UNFAZED BY GLOBAL TRADE
UNCERTAINTY, APPAREL SUPPLY CHAINS
STRUGGLE WITH RESPONSIBLE SOURCING
ASIAINSPECTION Q3 BAROMETER

2. HONG KONG, JULY 7, 2016
ASIAINSPECTION (AI)
A LEADING GLOBAL QUALITY CONTROL AND COMPLIANCE SERVICE PROVIDER
THAT PARTNERS WITH BRANDS, RETAILERS AND IMPORTERS AROUND THE WORLD
TO SECURE, MANAGE AND OPTIMIZE THEIR SUPPLY CHAIN
today announces its 2016 Q3 Barometer, a quarterly synopsis
on outsourced manufacturing and the quality control services industry.

3. CHINA AND ASIA PACIFIC STRONG IN THE
FACE OF GLOBAL TRADE UNCERTAINTY
Growth in Asia Pacific promises to remain strong at 6%,
China to retain its Q1 pace of 6.7% reflected in AI data of +7% growth in China
for Inspection and Audit volumes year-to-date.

4. CHINA’S CONSUMER GOODS MARKET
MATURING, BUT QUALITY STILL A PROBLEM
Local production quality in China remains a struggle, as inspections performed
for local brands and buyers saw failure rates increase by 28% YTD 2016 vs. 2015.
+28%YTD2016vs.2015

5. PAKISTAN AND INDIA:
APPAREL EXPORTS CLIMBING
Pakistan and India experience double-digit YOY growth in apparel export to the EU.
AI data showed a two-fold increase in product inspections over the last 12 months,
while failed inspections rates rose +26% in India and +42% in Pakistan YTD.
+42%
+26%
Inspection Failure Rate YTDApparel Exports to EU

6. APPAREL MANUFACTURERS STRUGGLE WITH
SOURCING AND SAFETY
A recent report slammed major brands for doing “virtually nothing”
to ensure their cotton is sustainable.
Forced and child labor remains prevalent in key cotton sourcing
destinations (Uzbekistan, Turkmenistan).

7. APPAREL MANUFACTURERS STRUGGLE
WITH SOURCING AND SAFETY
One in four factories in the Bangladeshi RMG sector requires major retro-
fitting remedial work, but financing remains a problem.
AI structural audit data shows that 53.3% of factories audited
“Require Immediate Action” or “Need Improvement”.
53.3%“REQUIRE IMMEDIATE
ACTION” or “NEED
IMPROVEMENT”

8. GLOBAL APPAREL AND FOOTWEAR TRADE
GREW BY 5% IN 2015
Asia Pacific remains the largest regional market, while The Middle East and
Africa are the most dynamic regions for apparel and footwear sales.
AI data shows a growing yet immature manufacturing base in Africa:
failed inspections rate surged by 15% in 2016 YTD vs. 2015.
+15%YTD2016vs.2015

9. SUSTAINABILITY ALSO A STRUGGLE
FOR THE JEWELRY SECTOR
As the EU adopts the framework to eliminate conflict minerals, more jewelry
manufacturers turn to audit programs of the Responsible Jewelry Council.

10. UNETHICAL LABOR PRACTICES REMAIN
AN ISSUE ACROSS INDUSTRIES
AI data shows that in Q2 2016, 5.9% of ethical audits failed because of child labor,
an uptick from 4.6% in Q1.
5.9%FAILEDBECAUSEOF
CHILDLABOR

11. PRODUCT RECALLS: RAMPANT YET INEFFECTIVE
Research shows that less than 50% of product recalls are effective,
due to lack of information, inconvenience, long waits, and bureaucracy.
50%INEFFECTIVE

12. PRODUCT RECALLS: RAMPANT YET INEFFECTIVE
According to AI lab testing data, in Q2 14% of tested products failed to comply
with safety standards when tested at the source.
14%FAILED IN Q2

13. AsiaInspection (AI), a leading global quality control
and compliance service provider
that partners with Brands, Retailers and Importers around the world
to secure, manage and optimize their supply chain.
ABOUT ASIAINSPECTION
YOUR EYES IN THE FACTORY!™

14. ABOUT ASIAINSPECTION
YOUR EYES IN THE FACTORY!™
DEDICATED ACCOUNT MANAGER
A supply chain partner
offering advice on your specific needs
INDUSTRY LEADING TURNAROUND
Onsite within 48 hours.
Reports the same day 80% of the time
COMPREHENSIVE ONLINE MANAGEMENT
Use your real-time dashboard
to benchmark and identify
your high performing suppliers
FLEXIBLE
Cancel or modify orders up to 4pm
the day before the inspection for free
PRODUCT EXPERTISE
Hundreds of off-the-shelf customizable
product specific checklists
TRUSTED AND TRULY INDEPENDENT
100% QC. AI is not involved in sourcing
and protects your factory information
MOBILE
Book, check reports
and make decisions on the go
ALL-INCLUSIVE PRICING
Easy to budget. No hidden costs

15. FOOTNOTES
1. http://www.worldbank.org/en/news/feature/2016/06/07/global-growth-forecast-again-revised-lower
2. http://www.focus-economics.com/regions/east-and-south-asia
3. http://atimes.com/2016/05/china-establishing-more-advanced-consumer-goods-sector/
4. http://www.just-style.com/analysis/eu-trade-trends-show-10-rise-in-clothing-imports-last-year_id128251.aspx
5. http://www.sustainablebrands.com/news_and_views/supply_chain/hannah_furlong/top_cotton_users_over_75_appear_do_virtually_nothing_sustainabili
6. http://www.just-style.com/news/map-shows-child-labour-risks-in-cotton-supply-chains_id128119.aspx
7. http://gbc-education.org/five-reasons-why-eradicating-child-labor-is-crucial-for-education/
8. http://www.ecotextile.com/2016062322198/materials-production-news/1-in-4-bangladesh-factories-face-major-remediation-costs.html
9. https://www.just-style.com/news/ten-key-trends-in-apparel-and-footwear-markets_id128169.aspx
10. http://www.fastcoexist.com/1680391/how-to-keep-conflict-minerals-out-of-your-daily-life-sort-of
11. http://www.wsj.com/articles/eu-agrees-on-measures-regulating-conflict-minerals-1466103065
12. http://www.stuff.co.nz/business/81600438/Less-than-half-of-product-recalls-work-Consumer
13. http://www.telegraph.co.uk/news/2016/06/18/faulty-tumble-dryers-cause-three-fires-a-day-and-must-be-recalle/
14. http://www.philly.com/philly/news/20160630_Can_t_get_through_on_Ikea_s_recall_hotline__We_tried_35_times__Here_s_what_happened_.html