Export Marketing Survey: German Market for Textile and Clothing

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This Project is financed by the European Union Support to Export Promotion and Investment Attraction in the Republic of Moldova EuropeAid/126810/C/SER/MD This Project is implemented by a Consortium led by GFA Consulting Group 5 EXPORT OPPORTUNITIES AND OBSTACLES Opportunities In the following possible opportunities and obstacles for Moldovan apparel producers to export to Germany are presented. The opportunities and obstacles have been formulated on the basis of the information provided in the previous chapters. Proximity to EU Market EU Trade Preference Opportunities Upgrading in the value chain Explore niche market Local Market Being the second largest export industry after wine, the clothing industry is of high importance to the Moldovan economy. Moldovan clothing producers are already linked to EU and German apparel companies, mainly working on contract and OPT basis. These existing business linkages can provide the basis for a further development of the sector. The following opportunities and steps are seen as important to, first of all, secure and further develop the position of the Moldovan clothing sector: Proximity to EU market Upgrading the value chain Explore niche market • Fast Fashion – the closeness to the EU market allow to serve for quick and flexible demand • Short travel distance for business partners (e.g. quality control visitors) • No time difference to business partner, and common cultural background • Upgrade within the textile value chain, without neglecting the contract work / using the income and contacts from contract work • Develop the capacity to fabricate value added products • Move up from CMT to FoB according importers specifications • Establishing of Moldovan brands and retail chains to target domestic market • Target smaller chain stores or buying organisations • Work with agents on commission (see chapter 4 Market Actors) • Work for high quality apparel segment (using the advantage of market proximity) 13
This Project is financed by the European Union Support to Export Promotion and Investment Attraction in the Republic of Moldova EuropeAid/126810/C/SER/MD This Project is implemented by a Consortium led by GFA Consulting Group Constraints Limited investment capacity Currency rate Constraints Laws and regulations Business Skills & Contacts Skilled labour force Despite its importance for the Moldovan economy the clothing sector seems to lack the necessary support to explore opportunities and to move up from contract work to value added production. In parts this relates to laws and regulations (e.g. taxation of cutting remnants), but also to the level of self‐organisation of the clothing sector. For instance an efficiently organized industry association – which can lobby the Government in policy issues, improve the image of the industry and offer services (e.g. market information, channel donor support, etc.) – is not in place. Further constrains are: Limited investment capacity • Low margins in contract work limit the capacity to invest in value added production schemes Skilled labour force Business skills and contacts • Vocational training system does not target the work skills need for value added production • Skilled labour force is moving to better paid jobs • Lack of design capacity • Knowledge and contacts for sourcing and supply is missing (as it is not needed for contract work) • Market information and marketing skills are not developed • A Fashion Centre, providing the apparel industry with fashion trends collected from various sources is not in place • Competence Centre, which offers technical services for improving technology and management skills in the industry, does not exist 14
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Export Marketing Survey: German Market for Textile and Clothing

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