TI 14 - October 2021

Paulo Vaz

Direction Assistant - ATP

ver the past two decades the Textile and Clothing Industry has gone from hell to heaven, only to be projected into the abyss once more. 

The liberalization of the international trade and China’s rise as a stronger player in the industry, at a global scale, forced the Textile and Clothing Industry (TCI) to reinvent itself in order to survive. TCI was then on the verge of a second and profound change, dictated by the sustainability paradigm, a theme formerly exclusive to environmental and social activists which has now become mainstream, entering loudly through companies’ commercial departments. If the market demands one must know how to respond.  

In the end of 2019 the fashion industry in developed countries, with more mature markets, was already facing and unprecedented crisis, claiming for reflexion and solutions, as the systematic fall in the main fashion brands’ sales had become undisguisable. The change in consumption habits in younger generations explain the phenomenon: greater worries regarding environment and working conditions in producing countries, the longer use of items and the diversification in the application of income. 

This ongoing change impacted fast fashion business models, the Portuguese textile and clothing sector’s main clients. They were forced to implement profound changes in their assumptions as they saw their future, or at least their growth, threatened. For many brands the solution was to make a bigger investment in ecommerce and in fast-growing emerging markets, such as the Far-East, with little environmental and social awareness, where the expansion prospects are still exponential, obviously hindering our local industry’s businesses. 

In the meantime, the COVID-19 pandemic arrived to undermine the game once more.  In many cases it worked as an History accelerator, inflating ongoing trends such as the digitalization of businesses, thus leading to the emergence of new opportunities. In concrete terms, the pandemic triggered the fashion business digitalization and created disruptions in the chain of value and supply of textile and fashion products whose manufacturing is located thousands of kilometers away. It also raised issues related to the carbon footprint in the transport of goods that may seem cheap to the final consumer but whose environmental impact is unbearable to the planet.

In addition, the need to create new strategic product reserves, namely for sanitary protection, raised discussion towards the necessity of an industry of proximity in developed countries, thus enhancing reindustrialisation policies. 

This is TCI’s main challenge for the third decade of the century. The post-Covid world has changed a lot and will keep on changing. The fashion industry will be even more demanding with those who want to remain. There won’t be many options left for the Portuguese Textile and Clothing: it will have to be more professional, with a more demanding management, more capitalized, more able to innovate and surprise but, most of all, aware that with the small dimension that most companies present there is no other way than escalating, through mergers, acquisitions or agreements between companies, which will enable having the necessary dimension to compete. If companies aren’t humble and able to cooperate, to everybody’s gain, fate holds isolation due to pride, an unavoidable decline and a non-glorious end.