Fung says China less competitive, Turkey ideal for
European fast-fashion market
WGSN 27.06.08

Speaking at the inaugural Istanbul Fashion, Textile and Apparel conference Thursday (June 26), William Fung, group MD of the world's largest sourcing company Li & Fung, said China is no longer as strong a competitor as it once was.

"China has become a victim of its own success," he said, explaining that the special economic zones on the coast that host most of the country's production facilities have now run out of labour, and the resulting use of workers from the inner provinces is creating political strain. "What the government would like to see is the factories located where the labour is... China's production on the coast is now being uncompetitive, and less and less competitive, and that is an interesting phenomenon. People are no longer scared that China is the invincible competitor they thought it was," Fung said.

Despite this, he emphasised that China shouldn't be written off. With the future strength of its interior regions predicted by Fung to take hold in three years time, it is no less of a global player, but has now, along with other market changes, rather opened up the industry to make it more obvious for a country like Turkey, which benefits from proximity to other European countries, to successfully compete.

"[Turkey] represents the ideal quick response market," said Fung. "Yes Asia is cheaper, but I think now, after years of education about supply chain management, cheap is no longer the only thing; you have to have speed to market."

Sylvie Dayi, Marks & Spencer regional director for Europe, Africa and the Middle East, emphasised the growth potential in the Turkish market and said that 29% of all M&S' general merchandise is sourced from the country, up 20% since last year.

"[Turkey] supports the principles Marks & Spencer believe in. Our main sourcing one is speed, flexibility. We want to be proactive, we don't want to be reactive, and we want to deliver a great product at value," she said. She also added that Turkey is particularly competitive in the changing global arena where everything in production needs to be taken into consideration. "[Turkey] has the advantage of a fully vertical supply base and there are some fantastic developments. For us the region is going to grow, we definitely want to mitigate the risk of buying from further away," she said.

Other subjects on the first day of the two-day-conference circled the global economic slowdown and the growing importance of sustainability as a core issue throughout the supply chain.