This year, it will be Eid-ul-Fitr for the Chinese
fabric and children garment makers as their items have swarmed the local
markets through illegal channels.The entry of smuggled and
under-invoiced fabric, apparel, garments, etc., of Chinese, Indian,
Korean and Indonesian origins are now changing the market scenario in
favour of consumers but causing sleepless nights for the local producers
particularly the organized sector.
At a time of galloping inflation, arrival of Chinese
goods has so far proved a boon for the general public but bane for the
local manufacturers who paint a doomsday scenario if the arrival of
these goods continues to thrive through illegal channels.
Clothes have never been so cheap. Invasion of
Chinese, Korean, Indonesian, Malaysian clothes, apparel and garments
either through legal or illegal channels, are encouraging consumers to
meet their second most pressing demand after food as per their pocket
"I can now easily buy a quality printed imported
georgat, crinkle and crush suit at Rs 200-250 as compared to local suit
of Rs 350-500," some woman buyers interviewed at Tariq Road and
Saddar areasaid, maintaining that they are more interested in prices and
are not concerned how the material is reaching the market.
Consumers are thrilled by the presence of Chinese
children clothes at affordable rates. Shopkeepers say that locally made
clothes are costly as compared to Chinese varieties, which offer both
unique designs, colour and quality stitching.
Consumers' shift towards smuggled and under-invoiced
fabrics and readymade garments has shocked value-added manufacturers of
garments, apparels, garments, knitwear, sweaters, etc., in the organized
Pakistani markets have seen a mushroom growth of bara
markets in various parts of the country. A sizable number of consumers
walk into the Tariq Road's Rabi Centre, Mateen Centre, Dolmen Centre,
Murshid Bazar in Saddar, Motan Das, Anarkali Bazar, Jinnah Road,
Kharadar, Jama Cloth Market, Hyderi, Chawla Market Nazimabad, etc.
An old player of Cloth Market main hub of city's
massive wholesale trading, near Memon Masjid, said that foreign fabrics
(both ladies and gents) have captured over 50 per cent market share. On
condition of anonymity, he said that many leading boutique owners are
procuring fabrics heavily to make windfalls.
Consumers, eager to wear Shalwar Kamiz in the
Eid-ul-Fitr, are tempted by the display of peach fabrics arriving from
China. Shopkeepers are now demanding Rs500-600 for only Kurta available
mainly in dark shades. Though, it does not worth more than Rs400 per
Kurta, consumers think. Stone wash Kurtas of Korean fabrics have also
hit the markets in the same price range.
On the emerging trend in the local consumer market
ahead of the WTO implementations in 2005, leading textile and garment
manufacturers offer their comments and discuss problems being faced by
"My production has suffered a fall of 33 per
cent in the last one year due to dwindling sales of our products,"
Director Sales, Al Karam Textile Mills, Rafiq Ibrahim said. He said the
company is continuously reviewing its production schedule and cutting
productions of various products.
He said many Indian varieties specially for ladies
outfits are finding their way into the market through misdeclaration,
under- invoicing and smuggling. He said price of these suits (georgat,
siphon, crinkle, crush etc) range between Rs500-600 as compared to local
of Rs900-1,000. Some Indian clothes are cheaper at Rs200-300 for full
suit as compared to Rs700. He said Indian clothes have captured 15-20
per cent market share. "Ladies still reckon the qualities of local
products as compared to Indian products," he claimed by saying that
designs of Indian products are quite good. He said Chinese peach had
also arrived with a bang. "Actually it is in fashion and people are
making heavy purchases despite its low quality," he said that China
has acquired the market share in the Shalwar Kamiz segment by 15-20 per
cent. He said cotton from China has also started arriving at Rs40 per
metre as compared to local Rs60-100 per metre. But the quality of China
is not as good. He disclosed the textile mills in Karachi were paying
sales tax on fabric production while Punjab mills enjoyed exemption.
Another leading producer of ladies and gents wear
said that the production had come down by 50 per cent in the last few
years and every year the company was cutting its production. Smuggled
items had virtually threatened the financial viability of the organized
sector, he added. "Time is not far when readymade shalwar kamiz,
stitched in China, will be available in the next Eid-ul-Fitr at Rs300
per suit as compared to Rs500-600 currently," president of MHG
Group of Companies, a leading producer of value-added fabrics, Majyd
He said many producers of suiting have virtually
disappeared from the market owing to unjustified competition from the
smuggled products and only a few survive. A complete fabric for trouser
of Chinese, Korean, Malaysian and Indonesian origins were available at
Rs300, while a high quality of locally-made trouser fabric range between
Rs400-600. "Time is not far when the existing players in the
suiting will become a history due to proliferation of smuggled, under-
invoiced and Afghan Transit Trade items in the country," he said.
He said fabrics, apparel and sweaters were entering through China
border. The landed cost of these items are almost half or less than half
of the production cost of comparable products manufactured in Pakistan.
Indonesian suiting was being imported at less than $0.45 per metre,
while quality suiting from China was selling at Rs55 per metre when it
cost around Rs95-100 per metre to produce one comparable metre in local
He said dyeing shirting from Thailand was available
at ridiculous prices and even all known apparel brands were using this
smuggled fabrics. Garment stores were stocked with apparels made of
imported cheap fabrics. "If a container, carrying smuggled 42,000
metres of suiting for making 28,000 trousers, arrives in Pakistan then
it means a job loss of 100-300 persons from yarn to finished product
stages," he said predicting job loss of 200 persons in case 12,000
shirts arrive through illegal means. Besides, joblessness, the
government loses different revenues at various stages and it definitely
hurts the economy of scale of local makers.
Majyd Aziz, an ex-Site Association chief, said that
Pakistan had to overcome this menace as it was eating away the local
industries. The government's irresponsive attitude to control the
smuggling had resulted in closing down of factories because it was
impossible to compete in an unfavourable environment when local makers
had to fight with low quality smuggled products. He urged the government
to set up an industrial cost commission to determine the basic cost
structure of each product so that the competitive studies and analyses
could help decide how Pakistani products stand in local and global
markets. He also asked the government to set up a team consisting of
representatives of Supreme Court, CBR, NAB, FPCCI, Finance and Commerce
Ministries and Interior Ministry to ascertain the true facts about the
future of industries in the light of smuggling.