EUROPE BRAND OUTSOURCE CLOTHES TO ASIAN COUNTRIES DUE TO HUGE MARGIN
Global fashion giants, such as Zara, Mango, Next, H&M, and Doppelgänger outsource manufacturing to garment factories in Pakistan.
Buying export quality branded clothes can be costly, especially if you are abroad, but shopkeepers in Landhi, also known as Pakistan’s denim hub, are selling Europe’s most-sought after fashion brands, such as Zara, on prices even the labour class can afford.
One such retailer is Syed Adnan Badshah, who has denim shop and a factory in Zamanabad, Landhi 4, and sells export quality denim for Rs400 instead of $50 (Rs7,000) which is its price in the US or Zara’s smart trousers (Chinos) for Rs650 that can cost up to €100 (Rs16,000) in Europe.
How does he do that, you may wonder. Badshah buys the leftover stocks of some of the world’s top apparel brands whose products are manufactured in Pakistani factories.
Here is how it works. These global fashion giants, such as Zara, Mango, Next, H&M, and Doppelgänger outsource manufacturing to garment factories in Pakistan. These factories produce 5% more than the actual order size to meet their rigorous quality control standards. The purpose of excess production is to meet any shortage in case some units are rejected by the brand. Once the order is shipped, the leftover merchandise along with raw material (fabric, brand labels and accessories like buttons) is sold in the local market at throwaway prices. These include units that are rejected because of minor defects, as well as fresh pieces that have no faults but were part of the extra production. Badshah buys these stocks in bulk and sells them at very low prices—and he is not the only one to do that.
Selling leftover export-quality apparel at low prices has become a big business in Karachi, and Landhi has become the denim hub with nearly 2,800 small and big factories involved in the business. The work has expanded so much that these factories also stitch replicas of these brands using the original raw material (the leftover) that they purchase from the suppliers of these brands and export them to Iran, Afghanistan, Russia, Africa and other places where they are unlikely to face copyright issues.
Given poor demand for women jeans in the area, shopkeepers in Landhi sell only men’s pants, but others have developed this into a full-scale business model. For example, the Expo City, which has become one of the fastest growing chains for export-quality branded garments. In three years, they have expanded into a network of 10 outlets all over Karachi. They also sell apparel for women and children. The stock has ‘made in Turkey’ and ‘made in Mexico’ labels too because they have leftover stocks from international markets.
Similarly, there are some shops in Zainab Market and Rex Centre that also sell these export-quality cloths, especially in children wear category.
The growing number of shops dealing in these export items is driven by high demand for branded apparels among those under 40 years of age, a segment that forms a significant portion of Pakistan’s retail market, which Euromonitor recently termed as the fastest growing retail market in the world.
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