On-Demand Fast Fashion Supply Chain in Turkey

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What type of products are made in Turkey versus China, in terms of outerwear or other types of garments?

Almost all garments are produced in Turkey. However, due to the cost of workmanship in previous years, our prices were higher compared to China. If a product requires more workmanship, the price difference between China and Turkey widens. We are not as competitive in outerwear price-wise, and this also applies to special items like quilted pants. Egypt, for example, is better at producing these items. Fabric prices for these garments are quite high here, but Egypt is more cost-effective. However, there have been changes recently due to fluctuating exchange rates. Until recently, China had better prices, but the gap has closed due to the increase in currency. We can now offer better prices for workmanship. The biggest cost components of a garment are fabric and workmanship. If our workmanship price is close to China's, and we use Chinese fabric, we can easily offer a better price. In Turkey, one certificate is being issued, which could be of interest. Suppliers who have this are not required to pay taxes. This is becoming a common practice.

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How would you compare the way traditional retailers like Superdry or Next in the UK, or H&M, work with their suppliers and integrate them into their supply chains, compared to newer on-demand production models?

Traditional retailers typically purchase products based on comparisons with previous purchases. For instance, they might compare the quantity and price of items they bought in a similar category, color, or shape in the last season. They then plan their purchases for the current year based on these comparisons, buying the full quantity they intend to sell. However, online retailers operate differently. They start with a small quantity for testing purposes. If a style sells well, they reorder. If it doesn't, they avoid ordering large quantities, thereby saving money. The main difference lies in the sampling and production side.

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Regarding the point of producing smaller batches for online production models, if I'm a supplier, why would I prefer to make 100 units instead of taking orders of 10,000 units from a large traditional retailer?

The industry is heading in that direction. Naturally, no supplier would prefer this, but after the pandemic, most brands have seen a decrease in sales, and consumers have shifted to shopping based on their needs. This change in consumer behavior has led brands to demand fast fashion and short lead services. This demand has benefited countries close to Europe like Turkey, making them more preferred. As most brands are adopting this approach, suppliers have to adapt as well. Of course, they would still prefer large orders, but they are learning that online sales turnover is quicker. For instance, if they ship 500 pieces and see that they are still shipping repeat orders after three months, they appreciate it. However, if they haven't experienced this, they may still resist the change.

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