Turkey’s net exporter ready-to-wear sector has been losing markets to its competitors due to increasing manufacturing costs and sector’s imports hit an all-time high in the first 10 months of the year. Despite rising costs at home, competitive prices abroad led to a decline in apparel exports and an explosion in imports.
In the January-October period of this year, ready-to-wear imports reached USD 3.2 billion, breaking an all-time record, while exports decreased by 10 percent in turnover and 15 percent in units as of November. In the same period, exports decreased by 8.6 percent in value and 15.4 percent in quantity. Thus, exports per kg increased by 10 percent from USD 17 to USD 19 with a compulsory increase in a sense.
Sector representatives stated that the change was triggered by the fact that brands based in Turkey, including local ones, turned to sourcing from abroad due to high costs and preferred to buy from abroad for their stores abroad.
We have become foreign dependent
The said increase attracted the attention of the economy administration and additional customs duties were increased from 30 percent to 39 percent, effective from November. Ramazan Kaya, President of the Turkish Clothing Manufacturers’ Association (TGSD), said that although Turkey is an important producer of ready-to-wear clothing, it has become dependent on foreign countries due to the recent cost increases. Kaya said, “Turkey has become expensive in specialized woven products such as coats and jackets. For this reason, local brands and foreign brands operating in Turkey have increased their supply from abroad. While we produce with labor costs reaching USD 900, we compete with countries that do it with USD 200 abroad.”
The gap is widening against Turkey
So how is the situation on the retail side? İzzet Stamati, Member of the Board of Directors of Cicek İc Giyim, which sells many brands from Calvin Klein to Versace, Armani to Hugo, DKNY to Guess in more than 30 stores in Turkey, stated that the reflection of the number of tourists on shopping last year was very positive, and this year, with the same expectation, companies are loaded on import orders. However, Stamati stated that tourist shopping in 2023 remained below expectations and said, “Due to high costs, brands turned to North African countries such as Egypt. We also have our own brand Stamati’s produced in Turkey, but there is no difference with imports anymore. As taxes increase, this gap widens and is reflected in the increase in product prices. In the coming period, we will feel the effect of this much more in tourist shopping.”
25 percent increase in ready-to-wear imports
The ready-to-wear and apparel sector is represented in chapters 60, 61, 62 and 63 in foreign trade. In the said chapters, imports, which were USD 2.5 billion in the January-October period of last year, increased by 25 percent to USD 3 billion 182 million in the same period of this year. This has been recorded as a value above all years since 2014. Clothing imports had amounted to USD 3 billion in 2015, USD 2.9 billion in 2016, USD 2.7 billion in 2017, USD 2.5 billion in 2018, USD 2.5 billion in 2018, USD 2.1 billion in 2019, USD 1.8 billion in 2020, USD 2.1 billion in 2021 and USD 3.1 billion in 2022. In the 11-year period from 2013 to January-October 2023, the highest imports were realized in 2014 with USD 3.3 billion, while the lowest value was realized in 2020, the year of the pandemic, with USD 1.8 billion.