Compliance in Emerging Markets

Compliance in Emerging Markets

Tariffs and trade uncertainty with China has forced apparel companies to diversify their supply chains. The influx of production to other sourcing destinations such as Bangladesh and Vietnam is leaving a strain on the factories. Due to sheer volume, production is being forced to move to various emerging markets. Consequently, this raises concern over compliance.

Consumers Care About Compliance

The issues of compliance have now risen to the same importance as “price, quality, and delivery,” according to Sourcing Journal Online. Consumers have demanded transparency from brands. They are concerned about child and slave labor, factory conditions, and fair wages. Now, social media and other sources are quick to break the news of such conditions. Ultimately this can tarnish a company’s reputation and business even when they are not aware they are not meeting compliance.

In turn, these factors now must be taken into account by sourcing managers. New destinations are a learning curve. Avedis Sefarian, President and CEO of Worldwide Responsible Accredited Production (WRAP) explains this in his piece on Sourcing Journal. He states that with the standard countries of production, there is more knowledge of the challenges that each face. They have plans to work around each problem and maintain compliance.

With the speed in which companies are moving production is taking them to regions that have not had the proper vetting. Sefarian points to Ethiopia and Myanmar as some of the newest ones that just haven’t been doing apparel production for long enough for brands to know their weak points. Furthermore, these companies are fraught with hasty decisions as speed-to-market has become as important as ever.

Social Compliance Programs

He uses Bangladesh’s rapid growth as a production center as a cautionary tale. As factories race to meet demand, the employment of unethical and unsafe practices emerge. Unfortunately, this can lead to tragedies such as the collapse of the Rana Plaza factory. Luckily, there is a solution. One of those would be using an independent social compliance program such as WRAP. Once production starts in a region, these programs begin to vet factories and provide plans and resolutions for sourcing managers looking to begin production.

Apparel Textile Sourcing is a proud partner of WRAP. At ATSC 2018 Avedis Sefarian hosted a seminar “How Responsible Sourcing Impacts Your Bottom Line.” You can view this seminar on our YouTube channel HERE. Don’t forget to register HERE for ATSC 2019 August 19th-21st, 2019 to catch our panel of educational seminars from industry experts.

Author: Christine Duff

Christine wants to live in a world filled with cutting edge fashion, beautiful words and and an endless supply of leather jackets and boots. A product development grad of FIDM, she was the Editor-in-Chief of MODE Magazine where she reignited her love of storytelling. She has diverse experience within the industry with trend research, art direction and styling editorial spreads. She gained her most notable experience working in Los Angeles at the satellite operation for GQ and Vogue Thailand. Christine is passionate about social science and the role it plays in the consumer goods industry and apparel in particular.