Bebiana Rocha
As part of Portugal’s presence at the Premiere Vision Montreal fair, AICEP´s Toronto Office shared valuable insights on the opportunities and challenges faced by Portuguese textile and apparel companies looking to enter or expand in the Canadian market. The conversation highlights the increasing recognition of Portugal’s textile industry for its quality, sustainability, and innovation. Key topics include the competitive landscape, the importance of certifications, and the market segments with the greatest potential for growth.
How do buyers and brands perceive Portuguese textiles?
In general, one can say that there is some knowledge in Canada, particularly within trade, of the quality and capability of the Portuguese textile industry. Regarding the clothing sector, very few Portuguese brands are present in the Canadian market, and those that are, have limited visibility. However, the volume of items “made in Portugal” available in the market has been consistently increasing, with imports of clothing more than tripling over the past decade.
Several factors contribute to this positive view of Portuguese textiles. First, the idea of being a European producer with a capable textile industry, known for its quality and tradition. There is a perception that Portugal manufactures well, has know-how, and has the capability for innovation and design. In addition to this, there is a sense of proximity and a feeling of reliability in service and good relations with Portuguese manufacturers.
It is known that we do not have the lowest of costs, like those of Asian suppliers, but we are competitive and can be a good partner for quality Canadian brands with smaller volumes.
Sustainability is a growing factor for Canadian brands, and there is also a good perception that Portuguese (and European) manufacturers are ahead in their commitment to ethical and environmental issues.
We can say that Canadian buyers and brands, although in a differentiated way and still evolving, have a favorable perception of the Portuguese industry and see it as offering good opportunities for the development and production of their collections. For Canadian companies already exporting to some European countries, creating production partnerships in Portugal, and from there exporting to other markets, can also be a growth strategy to expand their presence in the EU.
What challenges can Portuguese companies face when entering or expanding into Canada?
Canada is a sophisticated and highly competitive market, predominantly supplied by imports from Asian countries with much lower production costs, where many Canadian companies have established production channels for years. Four major suppliers stand out: China, Vietnam, Bangladesh, and Cambodia, which together accounted for over 67% of Canada’s total clothing imports in 2024. Other relevant suppliers, also competing largely on price, include India, Indonesia, Sri Lanka, Pakistan, and Turkey.
Another key aspect is the CUSMA (Canada-US-Mexico Agreement), which facilitates the entry of goods produced in the US and Mexico into Canada. Large American brands, in particular, benefit from this regime. Naturally, geographic proximity, the strong economic integration of the two countries, and similar cultural and consumption patterns also play a role.
Among European countries, Italy is by far the largest partner, ranking as the fifth largest supplier globally. Here, it should be noted that Portugal is the second-largest European exporter of clothing to Canada.
And we cannot forget the Canadian own textile and garment industry, which remains alive and competitive in certain market segments. Several Canadian companies, some well-known, part of their production done locally (e.g., Canada Goose, Peerless Clothing, Arc’teryx, Mackage, Aritzia, and others, primarily in the Montreal and Toronto regions).
Canada is a geographically vast market with some regional differences, which has logistical implications in terms of costs and time for distributing products to areas farther from the major centers of Toronto and Montreal.
Regarding regulatory aspects, Canada has a different framework from the European Union and the US, markets with which most Portuguese companies are more familiar. It is important for our manufacturers to gain knowledge of rules, procedures, and documentation required to export to Canada, as well as labeling requirements, standards, and specific rules that apply to certain products (e.g., regarding the flammability of materials, chemicals used in production, etc.).
Retail is largely dominated by large chains, with stores spread across traditional shopping malls, large outdoor commercial spaces, and outlet centers. These large chains have sophisticated supply systems and distribution logistics that require adequate response from suppliers.
For Portuguese companies looking to introduce their own brands into Canada, it is essential to be prepared to invest in promotional and marketing activities to build visibility and develop their retail presence. These costs can be quite significant, and often the greater investment is on the producer’s side.
The challenges are great, but there are certainly opportunities for national companies!
What kind of certifications or requirements are valued?
Recent market trends and consumer preferences are key factors to consider when developing an entry strategy for Canada. Canadian consumers are demanding when it comes to quality, but they can be somewhat “conservative” when it comes to prices. The perception of good value for money is very important. Additionally, ethical issues, sustainability, and traceability in the production chain are increasingly becoming factors in purchasing decisions. Many consumers want to know where, how, and with what materials the clothing they buy and wear was produced.
The use of sustainable materials and organic fibers is highly appreciated. Anything that can highlight the social responsibility and environmental commitment of the company/brand adds points. In this regard, many Canadian companies are seeking to obtain “B Corp” certification.
The concept of circular economy continues to gain momentum, and more products made with recycled materials are entering the market, meeting the growing consumer sensitivity to the need for material reuse and extending the life of products.
Regarding certifications for textile materials and others related to the sector, the Canadian industry seems to have not yet reached the same level of development seen in Europe. However, many companies value certifications such as GOTS, OEKO-TEX (Standard 100), and BLUDESIGN. For articles that use feathers (Down), the RDS certification is important.
What support can AICEP provide to Portuguese companies wishing to invest in this market?
AICEP can support national companies seeking to enter the Canadian market in several ways. This includes providing information about the market, regulatory aspects, and advising on approaches to pursue. We also provide support in identifying importers, distributors, and other relevant partners and service providers, as well as facilitating contacts with Canadian companies and entities, identifying business opportunities, and preparing market visits or participation in local events.
What segments have the highest potential? (luxury, sustainability, functional textiles…)
We believe that the Canadian market offers opportunities for Portuguese companies in various segments and niches, particularly in the higher-quality sectors. We know we cannot compete on price, and we must focus on product quality, innovation, service, and customer relationships. These are all areas where national companies stand out.
Small and medium-sized retail chains, particularly those with more differentiated collections and medium-to-high price positioning, can offer good opportunities for national manufacturers. Most of these chains develop their own brands, using brand developers and other local or international suppliers.
The Canadian fashion sector includes many local brands with relatively small productions, more geared towards independent retail and multi-brand stores. Many of them also invest in e-commerce, which continues to play a significant role in total clothing sales in Canada (about 20%). This can offer opportunities for manufacturers with the flexibility to produce small quantities and respond quickly to orders from these companies.
There are also some “luxury” fashion brands, both from Canadian designers and others, which are certainly worth considering. We have several national manufacturers working with prestigious international brands, which can also offer solutions for developing collections and production for these Canadian companies.
The outerwear segment, particularly winter clothing, has significant weight in the Canadian market. Some companies with top-known brands (Canada Goose, Mackage, Moose Knuckles, Nobis, and others) select manufacturers with technological capabilities and specialized skills.
Another segment of interest for producing certain items and collections is the large manufacturers of suits and outerwear, especially for men, who have top brands and a strong presence across the North American market (e.g., Jack Victor, Peerless Clothing, and Samuelsohn).
Premium brands of technical and outdoor clothing, as well as the growing trend of athleisure items (Lululemon and others), which incorporate functional textiles with specific properties, are also areas to explore.
Has the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada helped facilitate Portuguese textile and apparel exports?
The CETA agreement has undoubtedly contributed to the growth of Portuguese exports to Canada, primarily by eliminating customs duties upon its entry into force (September 2017). This made EU-made products more competitive in terms of cost and led many Canadian companies to consider production opportunities with European partners.
According to official Canadian statistics, imports of clothing items from Portugal amounted to a total of 77.9 million Canadian dollars; in 2023, this figure was 185.3 million dollars, meaning a growth of almost 141%. Among the 15 largest suppliers to the market, Portugal was by far the fastest-growing country. Preliminary data for 2024 shows a decline in our exports, though they are still at 148.6 million dollars. As mentioned, Portugal is recognized as a quality supplier and is the second-largest European supplier, with Portuguese imports growing faster than those from Italy.
All of this is likely tied to the increasing recognition of the “Portugal brand” in Canada. More and more Canadians are visiting our country, which also contributes to creating a sense of proximity and recognition.
Finally, it is worth mentioning that the current geopolitical situation, marked by significant uncertainty and disruption in economic relations with the United States, the main economic partner, may lead Canadian companies to strengthen trade ties with other regions to reduce dependence on the American market. In this perspective, CETA could rise to the top of the agenda again, and Portugal should position itself to take advantage of new business opportunities in the textile and apparel sector in Canada.