Transparency. Only by identifying the strengths, weaknesses, opportunities and threats (SWOT) of the fashion industry can there be strides to consistent and profitable growth. HIVOS, together with Equity Bank and the Association of Fashion Designers of Kenya (AFAD), on Tuesday, 21st June 2016 released findings of an exploratory research on Kenya’s textile and fashion industry that specifically looked at the role of fashion designers and small tailors in the fibre to fashion value chain. Presented by Dev Chamroo, senior consultant at CITC- Investment & Trade Consultants, the study provided an in-depth status of the fashion sector locally and the barriers to sustainably integrate the sector into Kenya’s economy. Here are some of the key highlights TDS learnt from the presentation and the 100 page document.
Kenya has great potential to serve the global, domestic and regional markets from its pool of fashion designers and small tailors. As mentioned previously, the Textile and Clothing (T&C) sector has also been identified in Kenya’s Vision 2030 as a pathway to industrialization as it possesses incredible economic potential. That said, the T&C sector, only contributed 0.6 percent to the GDP and accounted for only six percent of the manufacturing sector. According to the report, after a rich history spanning 100 years, the players currently in the Fibre to Fashion (F2F) value-chain include, ‘22 large foreign owned companies operating in the Export Processing Zones (EPZs), 170 medium and large companies, eight ginneries, eight spinners, 15 weaving and knitting companies, nine accessories manufacturers and over 75,000 micro and small companies, including fashion designers and tailoring units.’
Executive Summary: Domestic Market
Kenya’ current product offering in the T&C sector lies in the Cut, Make and Trim (CMT). However, if she wishes to unlock her full potential, the study recommends a shift into Full Package Service Providers (FPSP) and Original Design Manufacturing (ODM). This shift will lead to job creation, income generation, investment attraction, the promotion of entrepreneurship, as well as, accelerating technology adoption. The analysis of the Kenyan T&C industry has revealed the challenges facing local fashion designers and small tailoring houses to develop and integrate the Clothing to Fashion Value chain (CFVC). Here are just a few [it’s a pretty long list] of some of the domestic challenges:
- Lack of policy coherence and institutional alignment;
- Low level of value addition and a disconnect between the apparel sector and the rest of the value chain segments;
- Supply side constraints with regards to quality and price of fabrics, with focus on afro-centric cloth and garments;
- Weak business environment;
- High cost of production and built-in systemic inefficiencies, such as utilities, administration, inefficiencies, and cost of finance;
- Lack of market readiness;
- High cost and difficulties to access credit and finance;
- Predominance of SMEs operating in the informal sector;
- Lack of visibility of the Kenya’s design capabilities and absence on the formal retail platform;
- Illicit imports and negative impact of second hand clothing;
- Lack of a clear national policy on textile and apparel;
- The machinery and equipment are old and inefficient;
- Scarcity of skilled and trained labour (engineers, merchandisers, supervisors, top management.);
- Lack of appropriate industrial infrastructure for MSMEs;
- Kenya is a sophisticated market for fashion wear (highly westernized) with limited ethnic and traditional wear;
- Most of the MSMEs operate in the informal sector;
- Absence of an appropriate platform to showcase designers’ savoir-faire;
- Local designs are of good quality, however garment making needs improvements;
- Too many trade support institutions catering for the MSME sector, without proper alignment;
- Lack of policy coherence;
- Lack of a clear strategy to promote local designers to enter the domestic, regional and international markets; and
- The tourist industry remains inadequately catered for.
Executive Summary: Global Market
The goal isn’t just to build the Kenyan T&C industry for local consumption, but to successfully integrate it into the global market. According to the report, in order for Kenyan companies to successfully achieve this they will need to:
- Understand the demands of the international market and the trends that are changing the global apparel landscape;
- Leverage the particular advantages of the Kenyan market versus near competitors like Ethiopia, while simultaneously;
- Being realistic about and able to speak to Western brands concerns about the risks involved with sourcing from Kenya; and finally
- Pursuing several high-priority investments and opportunities that will best position Kenyan clothing designers, textile producers, and manufacturers to build a defensible strategic advantage in this very competitive market.
While fast fashion has become a major trend shaping the global consumer landscape, it may not be the right route for Kenya to pursue. For starters, the distance between the U.S (Kenya’s main destination for exports) isn’t favourable for the turnover time required for fast fashion. However, the report suggests that the second major global trend, conscious consumerism, a valid avenue for Kenya to pursue.The above are just a taste of the issues Kenya has to work on however the report says it isn’t’ necessary to fix them all immediately in order to make itself a competitive T&C industry. Three priority areas they’ve identified that do need immediate attention to grow the industry are:
- Continuing to invest for the long-term in the transportation and electricity infrastructure, subsidizing power in the short-run for exporters;
- Creating either a governmental or non-governmental apparel industry organization that can take the lead on overseas marketing and designer and manufacturer support on training and coordination;
- Taking action to develop the social and environmental compliance element to ensure that the development of the industry serves the most vulnerable members of society and offers a low-risk, appealing sourcing destination for global brands.
The report goes further to discuss the apparel market demand both globally and domestically, in detail, as well as, the background of the apparel industry. Points that have been raised in previous articles and interviews on the blog. What is particularly interesting is the report’s four part strategic goals recommendations.Strategic Goal 1: Integrate Local Designers and Small Tailors in the Domestic Retail Market
This refers to the graduation of designers and small tailors from informal to formal sector by registering their businesses under the new Companies’ Act 2015. As well as build market readiness and improve access to credit and finance
Strategic Goal 2: Strengthen The National Fibre to Fashion Value Chain
One core issue in the industry is how disjointed it is and in order for the value chain to work, the industry has to work together. The report advises improving quality of local products at each segment of the industry through modernizing technology, machinery, equipment and production processes, as well as, creating linkages among the different segments of the industry through collaboration, sharing of information/intelligence and feedback to complete the loop. Then there is the point of improving the competitiveness of local suppliers by:
- Training on resource efficiency and productivity enhancement;
- Enhance product offerings in terms of product diversity; and
- Capacity building at management, supervisory and quality control levels.
Strategic Goal 3: Create an Enabling Environment to Support the Growth and Development of MSMEs in the Textile and Clothing Sector
Its one thing to indicate an intention in Vision 2030 and it’s another thing to actually develop a strategy to guide the industry on the path to achieving it. Some of the avenues that the report believes will help grow MSMES to promote policy coherence include:
- Develop a long-term masterplan for MSMEs;
- Democratise the economic space by empowering MSME, including women and youth entrepreneurs;
- Introduce procurement policy for sourcing from MSMEs;
- Strengthen economic diplomacy to open new market opportunities through bilateral trade agreements.
Other avenues to be enforced is making the business environment friendly through:
- Strengthen trade facilitation through law enforcement against illegal imports, undervaluation and corruption at border points and customs;
- Establish clear, transparent and rule-base guidelines for all license, permits, clearances or approval;
- Promote E-Government initiative for e-application and e-approval for license, and permits;
- Provide appropriate incentives such as exempting raw materials, machinery and equipment and spare parts from import duties and offering accelerated investment allowance for modernisation and investments in energy saving and cleaner technologies promoting sustainable development.
Strategic Goal 4: Strengthen the Trade Support Network through Institutional Alignment
TDS found particularly valuable that the report highlighted the need to streamline the education and training sector as it does act as a foundation for the skill base required for this industry. This calls for synergy and collaborations between the teaching institutions for up-to-date curriculum for relevant skills development. It also calls for joint fashion shows and promotional events, and programs designed to help new graduates to successfully enter and grow into the industry.
Strategic Goal 5: Enhance the Visibility of Kenyan Designers and Their Design Capabilities in Kenya, the Region and the Global Markets
The last goal calls for the promotion of African design through promoting the use of local material and promoting traditional and ethnic wear at a national level. It also believes AFAD (K) would have a stronger impact if it became a national organisation instead of being concentrated in Nairobi, as is the case at the moment. But most importantly, the country must work on creating ‘made in Kenya’ a product that can venture into regional and international markets. Portals it can use include e-commerce, participation in international fashion shows in major fashion capitals, as well as targeting Kenyan diaspora overseas to promote sales abroad.
Domestically, there is the option of creating products targeted at the tourism market. These would be items such as safari wear that would be appropriate to the kind of holiday the tourist group are on but still manage to convey the ‘made in Kenya’ appeal.It is possible for Kenya to move out of the “made to measure” to “ready to wear” segment, if the industry players work together to address the issues and work on their weaknesses. One interesting point of interest raised Mr Chamroo was the need for designers to make clothes and accessories that complement the dimensions of the African body. If we did the research and found the measurements that work best for people in the region, the ready to wear would be more adequate for the local consumer’s needs. He also stressed the need to find the narrative of what ‘made in Kenya’ would be. If Australia promotes cotton apparel and Colombia is known for lingerie, what would Kenya’s niche be? There was no way to effectively shrink this report into one blog post but it was clear that the main issue was fragmentation and the lack of adequate policies to promote local businesses. However, there was also a clear indication that there is huge potential waiting to be taped into if only we could all look and aim for the bigger picture; together.