Compete and Collaborate

Why is collaboration essential to custom apparel entrepreneurs?

It may be true that healthy competition can benefit the consumers and drive the desire to innovate. But in the long run, too much competition can also kill innovation because of the "island-effect" that it can cause.

The custom apparel industry in the Philippines is considered fragmented. No single big company controls the entire industry. The downstream companies (raw material and equipment suppliers) are quite few in number but the upstream players (manufacturers, sewers, subcons, marketers, designers, printers, etc.) proliferate and they are now distributed all over the country, from Luzon to Mindanao. The fragmentation results to less bargaining power among the custom apparel players, which can result to more intense competition.

The buyers in the custom apparel industry are a mix of big and small ones. On one hand, those who serve the big buyers suffer from more intense competition such that the "island effect" becomes more prevalent among them. On the other hand, the players serving the small buyers face less intense competition. Overall, competition is still intense.

If the fragmentation continues, more custom apparel players will perish and new ones will appear, creating a faster cycle of "rise-and-demise".

So, how do we reverse this trend and stop this vicious cycle to happen. The only logical thing to do is to encourage the custom apparel players to compete vertically and collaborate horizontally.

​See next article on Horizontal Competition and Vertical Collaboration
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