The fashion industry in the United States remains heavily reliant on China as its primary sourcing destination, despite ongoing efforts from American brands to diversify their supply chains. A recent analysis of the top suppliers of clothing products from January to October reveals that China is responsible for nearly 61 percent of US fashion imports, totaling around 62,000 stock-keeping units (SKUs). In stark contrast, India and Vietnam only account for approximately 15,000 SKUs each, highlighting the significant challenge faced by US companies in their quest to “de-risk” sourcing from China.
At the recent Apparel Importers Trade & Transportation Conference organized by the U.S. Fashion Industry Association (USFIA) in New York, Sheng Lu, a professor of fashion and apparel studies at the University of Delaware, emphasized the formidable position that China holds in the global supply chain. Lu pointed out that while brands are eager to explore alternative sourcing locations, countries such as Cambodia and Bangladesh contribute only 3,500 and 3,000 SKUs, respectively. This limited capacity underscores how difficult it is for retailers to pivot their sourcing strategies effectively.
In Lu’s view, the complexities go beyond mere pricing advantages. China boasts established capabilities, manufacturing clusters, and an extensive supply chain network that many emerging markets simply cannot replicate at this time. When considering the so-called “Asia Five” countries—Cambodia, Bangladesh, Vietnam, India, and Indonesia—no alternative region comes close to offering the breadth of services and production potential that China provides.
The consequences of this dependence are palpable throughout the industry. For instance, as brands attempt to reduce their reliance on China, they often encounter limitations in terms of both quantities and capabilities in alternative markets. The ongoing geopolitical tensions and evolving trade policies further complicate the landscape, pushing firms to realign their strategies.
The reality of this situation is crystal clear: for the vast majority of US fashion companies, a shift towards new sourcing strategies will not happen overnight. Brands must invest time and resources to establish relationships, train workforces, and build infrastructure in alternative regions capable of meeting their standards for quality and efficiency.
Moreover, this remains a pressing issue in the context of sustainability. The trend of moving sourcing to regions with lower wages often subjugates the potential for ethical labor practices and environmentally friendly operations. Companies must tread carefully as they navigate this complex social and ethical landscape while striving to maintain profitability and consumer appeal.
As the industry grapples with these challenges, notable developments are occurring in other regions. For instance, Tata Cliq, an Indian online retailer, recently reported a 42 percent decline in its annual revenue after exiting the electronics sector to better focus on fashion. This move highlights a broader trend within the Indian e-commerce space, where specialization may ultimately determine success. Meanwhile, Australia’s International Woolmark Prize recognized eight finalists for the 2025 awards, showcasing innovation and craftsmanship in using Australian Merino wool.
In light of these developments, it is essential for fashion professionals to stay informed about global sourcing trends and regional capabilities. As brands continue to explore alternative sourcing avenues, the long-term impact on the industry will be shaped by their decisions and strategic pivots. Ultimately, whether through a continued reliance on China or a gradual diversification into other markets, the path forward for the US fashion industry will require focused efforts, strategic foresight, and a commitment to ethical practices.
In summary, while there are signs of change within the industry, the current reality illustrates that China still holds a critical position in the supply chains of US fashion importers. The road to a more diversified sourcing strategy is fraught with challenges, yet it is a necessary journey that companies must undertake as they adapt to the dynamic global landscape.
