The rise of cheap clothing manufacturers has brought significant benefits to brands, retailers, and consumers. Cheap clothing production, especially from countries like Vietnam, China, Bangladesh, and Cambodia, is often seen as an effective way to reduce costs. However, is choosing a cheap clothing manufacturer really a cost-effective solution, or will it bring many unforeseen risks?
Saving on production costs
The most obvious benefit of choosing a cheap clothing manufacturer is cost savings. According to Statista’s 2022 report, labor costs in Bangladesh, one of the world’s cheapest manufacturing countries, are only about $120 per month for garment workers, compared to about $700 per month in China and nearly $4,000 per month in the US. Vietnam, with a salary of about $190 per month, is also a country that attracts many large fashion companies.
Taking advantage of low labor costs helps brands and retailers keep product costs low while maximizing profits. This is especially important for fast fashion brands, when they need to produce large quantities of products in a short time and at low prices to meet the constantly changing needs of consumers.
Product quality risks
However, low production costs come with risks to product quality. One of the main reasons for low prices is cutting costs on materials and production processes. According to the Vietnam Textile and Apparel Association (VITAS), low-cost manufacturers often use lower-quality materials or apply less advanced production processes, making clothes more susceptible to damage and less durable.
A 2023 Vogue Business survey found that up to 70% of consumers have problems with durability when buying cheap clothes. In addition, with factories that do not have strict quality management processes, errors in the production process can easily lead to a series of defective products. This not only affects the brand image but also causes great financial losses. In the worst case, the brand may have to recall the product, causing the cost to exceed the initial savings.
>> See more: Advantages of garment manufacturers in Vietnam – optimal cost while ensuring quality
Working conditions and ethical risks
Choosing a low-cost clothing manufacturer also poses ethical risks when it comes to worker conditions. Factories in low-cost countries are often accused of violating safety standards and working conditions. The International Labor Organization (ILO) has repeatedly criticized garment workers for working in dangerous environments for wages that are not enough to live on.
The 2013 Rana Plaza factory collapse in Bangladesh, which killed more than 1,100 people, is a clear example of the serious consequences of ignoring safety standards. Following the disaster, a number of major companies such as H&M, Zara, and Nike were criticized for not properly monitoring the production conditions in the low-cost factories they work with.
Additionally, consumers are increasingly concerned about ethical manufacturing, and brands that are involved in ethical violations can lose trust and suffer significant reputational damage. According to a 2022 McKinsey survey, up to 43% of consumers are willing to abandon a brand if they learn they are working with manufacturers who violate labor rights.
Supply chain risks
Cheap clothing production often involves manufacturing in remote countries, which creates supply chain risks. Factors such as transportation disruptions, natural disasters, or political instability can greatly impact on-time delivery. Especially in the context of the COVID-19 pandemic, many factories in Vietnam, Bangladesh, and Cambodia have been forced to close, causing a series of brands to suffer losses due to production and delivery delays.
Fashion group Boohoo reported a loss of £26m in 2020, largely due to supply chain disruptions at low-cost factories in Asia. This shows that relying too much on low-cost but unstable suppliers can have serious financial consequences.
Find a balance
Rather than completely avoiding low-cost clothing manufacturers, many brands have sought to combine cost savings with ensuring quality, ethics and supply chain stability. One popular solution is to choose manufacturers with quality management and working conditions certifications such as BSCI (Business Social Compliance Initiative) or WRAP (Worldwide Responsible Manufacturing).
For example, factories in Vietnam are increasingly focusing on complying with international standards for quality and working conditions.
Choosing a low-cost clothing manufacturer can be a cost-saving option, but it also poses risks to product quality. With manufacturers focusing on reducing costs, materials and quality control processes are often reduced, leading to products that are prone to defects, lack of durability, and affect the brand’s reputation.
Vishimex is committed to checking and ensuring quality from input materials to finished products. Choosing to cooperate with Vishimex helps brands not only save costs but also minimize risks from production with unstable suppliers, helping to build customer trust through high-quality products.
With Vishimex, businesses can balance costs and quality, helping to protect their brand image and reputation in the long term.