Taiwan Textile Industry: Challenges and Opportunities

Textile exports have always been a major source of foreign exchange

earnings for Taiwan, and the textile sector as a whole played an important
role in Taiwan’s renowned “economic miracle.” However, for a period of
time not long ago, this sector in Taiwan was widely viewed as a “sunset
industry,” whose decline seemed inevitable as factory closures and
relocations to other countries multiplied and domestic production steadily
fell as a result of a range of factors, including increasing raw material and
labor costs, an appreciating local currency, and the rise of mainland
China’s textile industry.

In order to survive and tap new opportunities, Taiwan’s textile

manufacturers began actively investing their resources in fabric research
and development and in creating key new technologies. According to
Taiwan Textile Federation statistics, more than 4,000 Taiwan textile
enterprises have been able to weather the storm and continue operating to
the present day, relying primarily on a strategy of “innovation and R&D”
to secure a share of the global market. Meanwhile, the government has
lent important support in the Taiwan textile sector’s drive to remain
competitive with a focus on the creation of functional and
high-added-value fabrics and clothing.

With the emergence of various new fashion and leisure trends, potentially
lucrative business opportunities abound in the sportswear sector. The
global market for such products has steadily expanded in the past several
years, from US$50 billion in 2008 to an impressive US$66 billion just
over half a decade later. Many opportunities exist, for instance, in the
supply chains of international brand names, such as Nike, Lululemon,
Under Armour and Adidas, whose stock prices have continued to reach
new highs in recent years.

Taiwan textile enterprises, backed by the nation’s strong petrochemical

industry, have come to occupy a prominent position in the global supply
chain for highly-functional fabrics. Various tallies compiled by the
Taiwan Textile Research Institute illustrate this fact. For instance,
“Taiwan-made functional fabrics currently enjoy a 70-percent share of the
global market,” “Taiwan produces more than 50 percent of the material
used in firefighter clothing globally,” “over 80 percent of the products
made by the world’s top five sportswear and equipment brands are linked
with Taiwan,” and “an average of eight out of every 10 yoga outfits in the
United States contain fabric made in Taiwan.” In order to maintain their
competitive edge in functional and specialty fabrics, Taiwan textile firms
have kept their R&D centers based in Taiwan, thereby creating unlimited
business opportunities for innovative startups developing new channels
for their products.

The popular Taiwan clothing brand Lativ, sold exclusively online, boasts
annual sales of more than 14 million articles of clothing and revenue
topping NT$40 billion (US$1.23 billion) just six short years after its
establishment. Employees have shared in the prosperity, being rewarded
with year-end bonuses equivalent to 40 times their regular monthly salary.
Meanwhile, Uni-President Enterprises Corp. has in recent years launched
a range of 7-11 brand-name clothing products, taking advantage of the
4,800 convenience store outlets that it operates around Taiwan and that
serve more than six million customers per day. The initiative has been a
success. For instance, in 2012, more than 1.08 million articles of a single
brand-name heat-generating clothing product were sold during the winter
season, with the total sales value amounting to over NT$400 million
(US$ 12.3 million).

Amid increasing global competition, Taiwan’s textile industry not only

needs to maintain its competitive edge in R&D and innovation but also to
reduce its reliance on original equipment manufacturing (OEM),
accelerate adoption of IoT (the Internet of Things) applications to tear
down access barriers, as well as upgrade itself through restructuring and
create higher-added value through innovative products.