Ready-to-wear exporters and brands in search of new markets due to the contraction in main markets such as the European Union took a breath with the Central Asian market.
While the sector’s exports contracted by 9.9 percent in the January-November period of this year, exports to the Central Asian region consisting of Azerbaijan, Kazakhstan, Kyrgyzstan, Georgia, Tajikistan, Uzbekistan and Turkmenistan increased by 37 percent to USD 885 million.
Among the Central Asian countries, which are among the regions where brands have opened the most stores recently, the highest rate of export increase was realized in Kyrgyzstan with 60 percent, followed by Kazakhstan with 53 percent and Uzbekistan with 35 percent.
EU’s share dropped by 11 points
The biggest market of the sector is the EU. The contraction in demand in the region, which accounted for nearly 70 percent of total ready-to-wear exports in the past, led to a decline in this share to 59 percent. Similarly, the decline in the share of US market reached 12 percent. Manufacturers and brands, which tried to compensate for the loss with different regions, turned to North Africa, the Middle East, Russia and Central Asian countries in this period, and the increases realized in these regions, albeit to a lesser extent, were the lifeblood of the sector.
4 Central Asian countries in the top 10
The first 50 countries to which the ready-to-wear sector exports the most constitute 96 percent of total sector exports. In the past 11 months, exports to these 50 countries decreased by 8.6 percent from USD 18.6 billion to USD 16.9 billion dollars. Again in 11 months, exports to 16 of the 50 countries increased, while exports to the remaining 34 countries decreased. Among the top 50 countries, the highest rate of increase in exports was 160 percent to Saudi Arabia, where relations have normalized, followed by Russia with 91 percent. Central Asian countries Kyrgyzstan and Kazakhstan ranked 3rd and 4th. The 4 countries in the top 10 were composed of Central Asian countries.
Ramazan Kaya, President of the Turkish Clothing Manufacturers’ Association (TGSD), said that exports decreased with the effect of the loss in the EU market and therefore manufacturers turned to different regions. As a result, exports decreased from USD 19.5 billion to USD 17.8 billion in the January-November period of last year. Kaya said, “During this period, exports to regions such as Russia, the Middle East and Central Asia increased, but the loss is too high. These markets are not very new markets for manufacturers. It shows that they are working on these markets a little more. The withdrawal of Western brands from the region after the Russia-Ukraine war also has an impact on this increase.”
Branded exports from Laleli and Osmanbey
Drawing attention to the role of brands with few branches operating in Laleli and Osmanbey regions in the said increase, TOBB Ready-to-Wear and Apparel Sector Assembly President Seref Fayat stated that everyone is looking for an exit in this period and said, “When we look at the example of Central Asia, the effect of branded products is seen more. Brands with few stores operating in regions such as Laleli and Osmanbey are taking their own collections there. This is a significant increase and important in terms of market diversification. However, it is not a very large scale yet.” Stating that the US and the EU maintain their importance, Fayat said that the US has started to pick up and that he expects a recovery in the EU around March-April.
LC Waikiki has more than 100 stores in the region
Many Turkish brands operate in the region. Although these brands have recently turned to sourcing from abroad for their stores abroad, the products shipped from Turkey also have a high impact on this increase. Sinan Oncel, President of the United Brands Association (BMD), said that the declining purchasing power in Turkey due to inflationary pressure led to a contraction in demand, and that brands tried to compensate for this loss by opening stores in different regions. Central Asia is one of the new expansion areas of Turkish brands along with the North Africa region. In addition to ready-to-wear giants, many giants ranging from restaurants to shoes have recently opened stores in the region. For example, one of FLO’s biggest operations is in Kazakhstan. The brand is the market leader in Georgia. Again, Koton’s number of stores operating in the countries in the region is approaching 40, while LC Waikiki has 104 stores operating in the 7 countries in the region.