Business Alliances are Critical for the Textile Sector

Establishing robust business partnerships is important to boost the demand for textile and technical textile products.

Inflation still has the upper hand on the economy at 7.1% in the United States. The Federal Reserve of the United States has hiked the interest rate by 0.5% effective December 15, signaling the need to cool down the economy. With economic slowdown still a possibility in 2023, textile and other manufacturing sectors are looking for ways to be sustainable.

“Business-to-business (B2B) and business-to-consumer (B2C) partnerships need to be strengthened and have to be established in sectors where such efforts are weak,” stated Dr. Babu John-Mariadoss, Associate Professor of Marketing at Texas Tech University.

The United States cotton industry has been the leader in B2B and B2C initiatives, which are proving successful in improving the market share of cotton. Cotton producers contribute to research and marketing programs. Particularly, through Cotton Incorporated, positive attributes of cotton are widely broadcast to domestic and international consumers. In addition to such B2C efforts, programs are aimed at yarn spinners, fabric manufacturers, and finishers highlighting the advantages of cotton. Efforts are ongoing to reach out to nonwoven and technical textile sectors to boost the consumption of natural fibers in these sectors.

The global market size of B2B is larger than that of B2C and will reach US $1.8 trillion in the United States according to Forrester. In these stressful economic conditions, consumers want products at an affordable rate, and squeezing price points across the supply chain is important. Having robust B2B relationships and a reliable supply chain can translate into cost-competitive products. Cost cutting at manufacturing and distribution channels will be helpful in the current circumstance. “In the United States, distribution channel members such as distributors, wholesalers, and retailers collectively earn margins ranging between 30 and 50% of the selling price,” stated Babu John-Mariadoss.

Effective marketing has been a bottleneck in the growth of the technical textiles sector in developing economies. Dual-prong approaches involving B2B and B2C tactics are needed to boost this sector. Consumer goods manufacturers like Kimberly-Clark and Proctor & Gamble, which manufacture branded single-use hygiene products, have established robust B2B and B2C initiatives.

Policy schemes in countries that are aiming to boost technical and advanced textile sectors should focus on technical and marketing support. Until the time, the technical textiles industry reaches a critical level, government support should also focus on marketing, such as promotional initiatives modeled after the United States cotton sector. There can be public-private partnerships for promotional efforts to create awareness of the use of sustainable fiber-based advanced textiles in the hygiene, healthcare, and industrial sectors.

India has been investing in the National Mission on Technical Textiles, which has created awareness among businesses in different sectors of the technical textiles industry. There is an urgent need to reach the consumers and hence B2C efforts should go into high gear.

As the industry starts growing, such efforts will be picked up by the private sector as is the case in developed economies. In single-use hygiene products, while manufacturers are involved in B2C campaigns such as mass advertisement, wholesalers, distributors, and retailers also participate in such efforts. Many different marketing efforts happen through B2B dealings, and supply chain channels also agree to cost-sharing arrangements regarding marketing.

“Trustworthy business relationships and marketing campaigns are very crucial for business development and growth,” added Babu John-Mariadoss.

Business alliances involve a variety of negotiations, deal-making, and marketing tactics. Business and consumer partnerships are especially important to deliver cost-competitive products during tight economic situations.

By Seshadri Ramkumar, Professor, Texas Tech University, USA

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