Why Do Apparel Production Bases Keep Moving?

Apparel production bases never stay in one place.
In the 1970s and 1980s, it was Korea.
Then came China. Now, it’s Vietnam.
And today, it’s expanding to Bangladesh, Indonesia, Cambodia — even parts of Africa.

Why?
The key factors are: labor costs, political stability, and trade conditions.
A shift in just one of these can push companies to move.
It’s all about cutting costs, improving efficiency, and accessing better markets.

1990s–2000s

The Rise of China

Since the 1990s, China emerged as the global hub for apparel manufacturing.
Low wages, a solid production infrastructure, and openness to foreign investment created the perfect conditions.

But things changed over time.
Wages increased rapidly,
environmental regulations tightened,
and labor laws became more complex.

On top of that, political tensions like the U.S.-China trade war added further risk.
All these factors raised production costs.
Naturally, companies began to search for the “next China.”

Late 2000s–2010s

Vietnam Steps Up

Vietnam became the next go-to destination.
Labor was cheaper, and the political climate was relatively stable.
The Free Trade Agreements (FTAs) with the U.S. and EU significantly lowered export barriers.
For brands, this meant saving on both production and tariffs — a win-win.

The Vietnamese government welcomed foreign investment with open arms.
They developed industrial parks, expanded infrastructure, and offered tax incentives.
Vietnam became a “ready-made” production base.

As a result, major global brands like Nike, Adidas, and H&M rushed in,
and Vietnam quickly rose to the top ranks of global apparel exporters.

So, What’s Next?

But Vietnam, too, has started to change.
Wages are rising,
labor protests and power outages are risks,
and factory shutdowns due to COVID-19 have added new variables.

So companies are once again on the move —
looking toward even lower-cost countries like Bangladesh, Indonesia, Cambodia, and Myanmar.
These countries are also proactively attracting foreign investment at the national level.

Lately, African nations like Ethiopia, Kenya, and Egypt,
as well as Latin American regions like Mexico and Guatemala,
have gained attention for their cheap labor, free trade agreements,
and proximity to the U.S. market.

Why Do Apparel Production Bases Keep Shifting?

It’s not just about cheap labor.
The deeper issue is “cost-efficiency balanced with stability.”

Companies are constantly asking:

“Is it still viable to produce here?”

Even if labor is cheap,
political unrest or strict regulations can shake the entire supply chain.
A single strike or blackout can threaten delivery deadlines.

The relationship with export destinations also matters.
FTAs that offer tariff benefits can be a powerful reason to relocate production.
Where a product is made can drastically affect the profit margin.

ESG factors are increasingly influencing decisions, too.
Stringent environmental and labor standards raise production costs.
But moving to countries with low standards can hurt a brand’s reputation.
So companies must balance between cost and brand integrity.

Infrastructure is another major concern.
Are electricity, logistics, and data networks reliable?
Can raw materials be sourced locally?
These conditions determine productivity and reduce risk.

In, Conclusion, the movement of apparel production bases is not just about lowering costs —
it’s a multi-dimensional strategy for sustainable operations.
And this decision is made over and over again — every year, every quarter.

➡️ Coming up next

As production bases keep shifting, supply chains grow more complex.
In the next episode, we’ll explore “The Complexity of the Apparel Supply Chain.”

References

• Smith, J. (2019). The Shift of Garment Production Bases. Journal of Fashion Technology, 12(3), 45-60.
• Lee, H. (2020). Vietnam as a New Garment Production Hub. International Journal of Advanced Manufacturing, 15(2), 123-135.
• Kim, S. (2021). Diversification of Production Bases in the Apparel Industry. Textile Research Journal, 18(4), 89-102.
• Graph 1: https://www.voronoiapp.com/Markets/Asia-Conquers-U.S.-Apparel-Market,-but-China-Lags-Behind-600
• Graph 2: https://www.consilium.europa.eu/en/infographics/vietnam-trade/