Chapter 5: Industry and Market Place

5.1 The Industry

5.1.1 Clothing & Apparel Industry

The growth of Malaysia's clothing and apparel industry accelerated in the early 1970s, when the country was on the course of export-oriented industrialization.

The industry was the seventh largest contributor to total earnings from manufactured exports in 2006. Malaysian exports of clothing and apparel have increased significantly over the years driven by a few factors.

5.1.2 Shape of the Industry

Strong external demands from Malaysia's major markets particularly United States of America (USA) and European Union (EU). Quality textiles and apparel through the use of quality certified production processes. Over the past 10 years period (1996-2005), a total of RM4.9 billion of the textile and apparel investments were approved, with nearly 83 per cent of them were in the textiles sub-sector (Table 2). Foreign investments accounted for almost 58 per cent and the majority was in textiles sub-sector. Domestic investments dominated the apparel subsector, with a total amount of RM572 million or about 67 per cent.

Malaysia Import & Export Statistic (in brief) from Year 2003 - 2007

			Export (RM)		Import (RM)
	2004 (Total)		1,359,572,283.00		1,119,417,800.00
	Textiles		991,192,222.00		937,774,549.00
	Apparel		368,380,061.00		181,643,251.00
			Export (RM)		Import (RM)
	2005 (Total)		1,480,271,157.00		1,176,459,587.00
	Textiles		1,139,552,438.00		987,226,492.00
	Apparel		340,718,719.00		189,233,095.00
			Export (RM)		Import (RM)
	2006 (Total)		1,769,489,507.00		1,229,099,999.00
	Textiles		1,339,752,499.00		1,015,856,933.00
	Apparel		429,737,008.00		213,243,066.00
			Export (RM)		Import (RM)
	2007 (Total)		1,803,086,509.00		1,329,946,553.00
	Textiles		1,363,665,692.00		1,095,516,594.00
	Apparel		439,420,817.00		234,429,959.00

5.1.3 Development of the Industry

The outlook of the Malaysian textile and apparel industry is indeed challenging. With the

FTA, the industry foresees some 200 per cent increase in exports to the US market;

otherwise, a marginal increase of 0 - 3 per cent or perhaps contracted annual growth is

anticipated.

Local textile and apparel makers are fearful of the exaggerated competition once the

quota imposed by United States on China’s textile and apparel is completely removed in

2008. In addition, with more exporting countries to enter into FTAs deal with the United

States in the future, the local textile and apparel industry would lose its comparative

advantage, especially to the lower cost production centres.

Malaysian contract manufacturers have maintained a good reputation in terms of quality

and timely delivery for middle to up-market brands. Almost 90 per cent of the apparel/

garments exports of the country are from contract manufacturers. To move up the value

chain, the experienced apparel contract manufacturers are advised to explore and

embark on own-design manufacturing (ODM), and subsequently move further into

creating and developing their own indigenous brands. A quality brand image is the asset

of a company that will ensure the products be well-positioned in the market and keep the

price war irrelevant. Nevertheless, brand development and promotion is not an easy

task. It requires serious commitment of the top management in developing a comprehensive brand strategy for their products. The apparel makers that are serious about developing own brand name should tap the Brand Promotion Grant and work with agencies such as MATRADE that could provide professional advice in brand building.

The Malaysian textile and apparel players should also venture into high value

added products such as higher quality functional fabrics (wrinkle-free, anti-bacteria,

ultraviolet protection, and fire resistant), industrial textiles, and home textiles. Other

niche products to consider include high-end apparel, bridal gowns and blazers, and

ethnic fabrics (batik and songket).

In addition, to encourage investments in the textiles and apparel industry in the country,

several textile products/activities have been gazetted as promoted products/activities

under the Promotion of Investment Act, 1986 and could be considered for tax incentives

in the form of Pioneer Status or Investment Tax Allowance. These products / activities

include natural or man-made fibres, yarn of natural or man-made fibres, woven fabrics,

finished knitted fabrics, finishing of fabrics such as bleaching, dyeing and printing,

knitwear, skiwear or winter outerwear, non-woven products, elastic webbings and textile

hose piping.

5.2 The Marketplace

5.2.1 Current Market Condition

The market place of clothing and apparel in Malaysia is intensive competitive. Most of the international brand has established their business and penetrate their brands and products into Malaysia’s market earlier or recently.

Bukit Bintang is considered as the biggest fashion market with several giant shopping centers that are vibrant and frequently visited. Well-known and familiar fashion retailer such as MANGO, PADINI, ESPRIT, TOPSHOP, TOPMAN, SUB, G2000, FOREVER 21, GAP, GIORDANO and ZARA can be easily found in the area which is busy with consumer traffic.

Other than that, shopping complexes like Mid Valley Megamall, One Utama, Sunway Pyramid, and The Gardens are great market place of the industry.

Besides that, the growth of the big supermarket and hypermarket such as PARKSON, AEON JUSCO, SOGO, CARREFOUR, TESCO help this industry to boost up.

Those complex lots and stores are always mainly occupied by fashion retailer and outlets. The places are consistently crowded with people during weekends and holiday.

From observations on the situations, market of clothing and apparel in Malaysia is seen with its great potentials.

5.2.2 Changes in the Market Place

Strong competitions in the market are leading to more innovation and healthy growth of the industry. It is eventually stimulating the market place and boosting the economy.

Although lower prices are resulted in competition, there are still concerns and risks of facing low quality production, bad shopping experience and poor customer services.