Impact of Thailand's Culture upon the International Trade in Textiles and Apparel - Case Study Example

Impact of Thailand's Culture upon the International Trade in Textiles and Apparel

Introduction

The apparel industry of Thailand has been characterized by sustained growth and success over the past five decades. This industry, due to enhanced international trade operations, has made substantial contributions towards the economic and social development of the nation. As such, the apparel and textile sectors constitute major revenue generating industries, with more than a million workers. As of the year 2007, these industries had accounted for 4.5% of the total gross domestic product (GDP) and employed around a fifth of the total industrial labor workforce.

During the first half of the 2000s, the performance of the apparel industry of Thailand had been exceptional. During that epoch, it had achieved the status of a major international exporter of apparel and textile products. Its ranking, during that period, had been among the top 15 exporters of apparel and textiles. Subsequently, globalization and trade liberalization had presented the Thai apparel and textile sector with several major challenges. A major challenge emerged due to the fierce competition arising from China, India and Vietnam.

The Thai Government provides the textile and apparel industry of Thailand with unstinting and durable support. To this end, it has been conducting several training seminars and workshops for the leaders of this industry. In addition, it has provided considerable logistics and transportation support. Moreover, it has implemented numerous projects for enhancing the efficiency of Thai exports.

Analysis

A major feature of Thailand is that it has brought about several innovations. For instance, as the global leader in silk production, its silk has been the nation’s one tumbon one product (OTOP) project. This program had been designed by the Thai Government to promote unique and locally made products throughout the nation, as well as across the world. Regardless of the keen competition from China and India, Thai silk has managed to preserve its global reputation vis-à-vis quality and distinctive traits . This highlights the importance of cooperation between the public and private sectors for ensuring outstanding product development and innovation.

As such, the production and distribution of apparel exports have been improved by contemporary developments in telecommunication, transportation and other infrastructure. The Wall Street Journal has described the Thai economy as being one of the fastest growing in the world. Several researchers, including Kunz and Garner, have claimed that Thailand’s apparel industry provides is characterized by superior quality and shorter lead times, in comparison with its neighboring nations. This can be attributed to the indigenous production of raw materials, including silks and man-made fibers. Moreover, this industry enjoys an extensive variety of operations that range from yarn spinning and apparel design to production.

Moreover, the Thai apparel business is assisted by the other supporting industries with respect to international competitiveness. As such, the presence of interdependent economic agents that support this apparel industry results in innovation. Thus, the cooperation among industries to develop and implement innovative ideas has the potential for creating a novel source of competitive advantage for the Thai industry. In this context, it has to be pointed out that the research and development institutions of Thailand should work in close cooperation with the apparel and textile sectors and undertake transfer of technology and diffusion of innovation, in order to buttress the competitive advantage of the nation.

In addition, it has been strongly contended that despite the presence of fierce competition in the international apparel market and rising production costs, the Thai textiles and apparel industry can retain its global competitiveness due to the continued support of the Government. In this regard, Porter’s determinants indicate that competitive rivalry and competent business management will assist the apparel industry to develop new skills and resources to preserve its competitive advantage..

In fact, the societies of Southwestern China, Laos, Northern Thailand and Northern Burma regarded clothing as something that was much more than mere protection from the elements and economic activity. Thus, the colors, patterns and weave of the fabric designated a specific tribe, village and individual status. The migration of the Thai to the south, into their present homeland, was accompanied by a transfer of their textile and clothing culture.

Moreover, these traditions are vibrant and flourishing in Northern Thailand, especially in the Chiang Mai region. This claim is vindicated by the unique costumes that the hill tribes adorn themselves with. As such, the focus of the Thai textile industry is the North of Thailand. This region employs around 200,000 individuals in cotton and silk production, or in small enterprises dealing with the processing, supply and trade of textiles. Cotton is grown, spun, dyed and processed in the countryside of the North, whilst silk yarn and fabric are produced in the Lower North and Northeast.

As such, Thailand has emerged as a major tourist destination and the second largest economy in the Association of Southeast Asian Nations (ASEAN). The Thai silk industry has traditionally supported a large number of people in northeast Thailand. Not surprisingly, it has emerged as a major feature of the cultural heritage of that region. For instance, it has been estimated that there are 150,000 to 500,000 households in Thailand that depend upon silk production as a means of supplemental income. There are several silk styles, patterns and rare dyes in Thailand. Furthermore, silk is utilized for several cultural purposes. Moreover, there are specific patterns and styles that are related to courtship, engagement, marriage, birth and death. . In addition, specific silks are associated with monks and novices, spiritual and superstitious practices, and Buddhist festivals.

One of the characteristic features of the Thai silk industry in Southeast Asia is the primary use of handlooms. In general, rural women undertake the task of reeling and weaving. This has been attributed, among other reasons, to the fact that hybrid and native varieties of Thai yarn do not lend themselves to being machine reeled. However, the prevalence of silk produced by handlooms can be attributed to the commercial viability of the non-mass produced traditional fabrics.

The garment industry of Thailand supports between 800,000 to a million employees, whilst the textile industry supports 200,000. These industries constitute the second largest employer in the nation. Apparently, Thailand supports a large number of individuals working in the textile sector. However, it has to depend upon the import of cotton, fabric and yarn to manufacture garments and textiles. As of the year 2014, Thailand had exported a total of US$ 7.52 billion of textiles and garments. The exports to Asia and the Pacific were US$ 3.42 billion and the exports to the US was US$ 1.24 billion.

In the year 2012, textiles exports of Thailand reduced by 12% to US$ 7.2 billion. This situation improved by the year 2013, when these exports reached US$ 7.5 billion. The primary markets for these exports have been the nations of the ASEAN, Japan, US and the EU, with exports of 21%, 11%, 16% and 15%, respectively.

Intense competition is envisaged by organizations in the globalized world. In addition, organizations are compelled by economic, social, political and technological changes to adapt and improve on a continuous basis. As such, the success of an organization is determined by its personnel to a major extent. These people have to be skillful and knowledgeable; possess a cheerful and helping attitude; responsible for the organization; and they have to be able to work with others, happy at work and enthusiastic. When the personnel are happy with their work, then good attitude towards the organization develops. This in turn promotes efficiency and the organizational goals.

Nevertheless, in order to offset reduction in exports to the EU and US, the textile and apparel industry of Thailand has commenced to focus upon transforming itself into a fashion hub for the ASEAN region. Thus, there has been an increase in exports to China, Hong Kong, Korea and Japan, as a counter to the reduction in exports to the US and EU. The former exports constitute 50% of the nation’s total exports.

As declared by Srirat Rastapana, the Director General of Department of International Trade Promotion at the Ministry of Commerce of Thailand, around 24% of exports are within the ASEAN, with China accounting for 12%. The Asian market is truly enormous and admits of the possibility of tremendous expansion. In addition, Rastapana highlights some of the advantages possessed by Thailand. For instance, it has the strategic location to emerge as a distribution center of ASEAN. Moreover, it ensures product quality and has the benefit of several educational institutions that provide excellent personnel for textiles and design. All the same, in order to retain its position in the global apparel industry, Thailand has to cooperate with the ASEAN nations for sustainability.

With regard to the initial stages of industrialization in the developing world, the clothing sector enacts a vital role. Therefore, promoting the clothing industry ensures a positive influence on economic development. For instance, this industry is labor intensive. Consequently, its expansion promotes employment generation. Moreover, the impediments to foraying into this sector are low. Hence, small and medium enterprises can participate on par with domestic enterprises in production.

Conclusion

Thailand’s garment industry is highly competitive. The success of a competitive industry is determined by the presence of excellent internal communication and outstanding organizational structure. The presence of strong internal communication provides an organization with a decisive competitive advantage over its competitors. Thai heritage and culture has traditionally attached considerable significance to the manufacture and use of textiles. Despite reducing cost competitiveness, with respect to its textile industry on account of escalating labor costs, Thailand has managed to reinforce its fashion industry by developing fully cycle value chains for its national market.

In addition, this industry has retained its global competitiveness and this can be attributed primarily to the persistent and unstinting support of the Thai Government. It can be surmised that Thailand’s apparel and textile industry pave the way to its success internationally through its culture and technological innovation.