Fashion is a appealing industry in Indonesia. Textile, Garment and shoes industry have been growing because the 1970s in Indonesia and also have become the most significant contribution the country's financial growth. According to the report created by Indonesian Textile Connection (API) textile industry in Indonesia valued about US$ 15 billion with more than 2500 textile, apparel and shoes manufacturers located in Java alone.
Numbers of new fashion designers emerging and established designers gain reputation in both domestic and some international market. With most manufacturers focused in the hawaiian islands of Java and Bali, the two places; Bali and Jakarta become the forefront of the fashion craze in Indonesia. Rebecca Payack, the Manhattan fashion correspondent from Global Dialect Monitor pointed out that the economical situation changed the global fashion industry. From 2009 to 2010, the fashion industry remains in flux with the decrease of some leading players and the significant increases of the new emerging metropolitan areas such as Bali which has mentioned as one of the fashion city in Asia, ranked 32nd in the fashion capitals total annual list from Global Dialect Monitor.
Nevertheless, there are a few problems delaying the development of the fashion industry in the country which will be reviewed further in the newspaper. This paper will discuss the issues arise in the industry, the reason and aftereffect of the problems towards the country's economical situation and even more focus on the home fashion industry. By looking over the problems, the research will continue on the task ethic and home customers' behavior in order to look for the potential customer of improvement of the country to develop a fashion city.
1. 1 Indonesian Fashion Capitals
Compare to other Asian's fashion capital such as Japan, Hong Kong, Korea and China which includes been known worldwide; Indonesia's fashion industry is less influential to be consider as fashion city of the entire world. In 2000s, Indonesia fashion has greatly improved, proven by the success of fashion week happenings in Jakarta, Bali and accompanied by other festivals of fashion and culture.
Jakarta is the capital city of Indonesia becomes the center of economic, politics, and culture of Indonesia. The many ethnic groups in the town impact its culture to have distinct and attractive lifestyle. Several artwork and culture exhibitions presented in the location including Jakarta Fashion Week which founded in 2007 by Femina Group (leading journal publisher). The occurrences include fashion shows, exhibition, and fashion design competition. It's been one major occasions where designers in the united states showcasing their masterpieces to attract home and international clients.
Differ from Jakarta; Bali is the travel and leisure city of Indonesia, famous for its rich culture and preserved tradition. The flood of tourists influences it with an attractive variety mixture of culture and tradition, impacts the creative movements in the city and attracts musicians and artists from both domestic and international marketplaces. It geographic location also change the style of fashion to be more ready-to-wear compare to Jakarta. Mostly known for the swimwear, it placed 5th after Miami, Rio de Janeiro, Barcelona and Sidney. Bali Fashion Week has seduced tourists and clients from all around the globe;
Both locations has one similar features which determine the characteristic of fashion in Indonesia; A solid traditional culture which greatly influence the introduction of artwork including fashion world in Indonesia, many visual artists and fashion designers taking cultural elements as their inspirations and incorporate it to their creations.
Problems in the Industry
To begin the study, the industry split into three categories; Manufacturers and Small-Medium Enterprises (SME) and Designers. All categories are impact the other person and accountable for the development of the country's fashion industry.
2. 1 Manufacturing
Indonesia's manufacturers are mainly produce for export. Overseas investments are the primary economic driver in the industry dominates by international traders from Japan and South Korea and exporting to countries such as US and EU.
Competition from other countries
Fierce competition from other countries such as China, India, Bangladesh, Turkey, Mexico, Vietnam and Thailand which have been developing and committing it the global market, shareholders proceed to these countries for better investment environment, lower pay and higher creation capacity, especially China and India which are the most substantial exporter to US, matching to WTO record, China's garment export to US is rising at least 15% in the recent 5 years.
Machinery and technology impact the creation capacity for a manufacturer. Relating to record by fibre2fashion, as much as 50% of manufacturers in Indonesia still use ageing machineries - leading to problems for short productivity, efficiency and products quality.
After the economic turmoil, many manufacturers suffer great loss due to the withdrawal of foreign investors. Lack of legal certainty, corruption, inefficient bureaucracy, labor laws and regulations and tax problems are some of the troubles that keep shareholders away.
Cost of Production
Accounted 80% of materials used are imported due to insufficient materials produced locally. 90% of natural cotton needed in garment and textile producer is exports from USA and Australia while synthetic leather and embellishment exports from China. Way to obtain high quality materials unable to meet local demand; Indonesia's footwear manufacturers was required to transfer $61. 2 million of leather and almost 15 to 20% supported materials.
Demand of skilled staff forced salary rate up impact rising labor costs - smaller companies unable to achieve high skilled employees limit their creation as home-based manufacturers
2. 2 Small-Medium Enterprises
SME can be an important industry in Indonesia because of its potential occupations and its ability to fulfill low-income domestic market. It contribute 90% of the total GDP of the country, even through the economic problems in 1997/1998, SME has proven to be reliant to the monetary situation due to its flexibility to modify the creation process and less dependent on imports. Compare to large level manufacturers, SME has more limitation but it able to channeling the creativity of the people which also start great opportunities to import their products
Quality of home products
Domestic manufacturers especially SME are almost never can contend with foreign-funded manufacturers since its generally handmade production, the quality of the products are incomparable since almost all of best products are for export. For example, shoes industry dominate by sport shoes since it is exactly what the exporters demand. That is one of the main element reasons why the fashion industry is being monopolized by overseas brands.
Low Labor Production
Many of the SME remain bottom on home-industry with traditional management using manual production process. SMEs in Indonesia usually an extremely small in size, started from home with less than 50 labors contain family or hourly individuals. Mostly produce substandard consumer goods with no specialization or subcontracting with large manufacturers
Lack of financial support limits them to have enough knowledge and capability to provide large market demand. Limit the gain access to for SME to have formal training and adequate skills especially in management and marketing. They depend on their own saving or informal financial resources, local network, subcontracting with large manufacturers or order from customers
Excessive bureaucracy and poor infrastructure cause trouble for small industry, it cause many road blocks and cost a lot of money for starting or working business scheduled to incorrect credit allocation particularly in rural areas - poor transportation system, facilities and communication have an impact on the working assurances and efficiency of the cluster area to interact encouraging each other
2. 3 Designer
Many Indonesian fashion designers began their business in 1980s however; the fashion scene had not been "alive" until around 2000s. The first fashion designer connection, Ikatan Perancang Busana Madya Indonesia (IPBMI) established in 1980s as a small organization to control the established fashion designers and only consist of few designers. The relationship later split into two organizations; Asosiasi Perancang Pengusaha Setting Indonesia (APPMI) and Ikatan Perancang Method Indonesia which is still exist today. It is less organize and instable compare to the predecessor of fashion connection like People from france Fashion Federation, The National Chamber for Italian Fashion or English Fashion Council which includes been established previous and has been monitored properly
Financial Troubles for fashion designers
As one of SME, fashion designers mostly started out as a tailor or seamstress by receive designed to order, making couture parts and greatly depend on customers to run their business. Lack of financial support put designers in trouble to get market as a result of lack of advertising and branding. One of crucial instant for fashion designer is fashion show; Indonesian fashion designers especially the new designers cannot finance their indie fashion show, they depend on fashion weeks and other fashion occurrences which affect their branding.
There are just few big developer names who able to have indie show, which still not in regular timetable.
Less Advertising Support
Except fashion weeks, there are no major mass media magazines for designers impact the brand understanding from the marketplace. Local resources such as traditional fabric was not being explored until around 2005, the style industry was totally affect by foreign string brands like Zara, Mango, etc
Lack of designer's identity
Like a great many other developing fashion capitals, Indonesian designers are greatly effect by european fashion nonetheless, they may be lack self id between one another. Many less famous designers are trailing behind the famous one and having same styles. The most frequent style is couture dresses (both western style and traditional Kebaya).
A significant example is Batik, starting 2008 when Batik was trending many Indonesian designers and fashion brands are compete to own Batik fashion series. This becomes a one point in time style since it become open to niche market to low market in short cycle, affecting the exclusivity of the designer's brands.
Consumers aren't convinced by the local made products, they would rather have international brands anticipated to delight, and lack of brand recognition. The resources of designer's brand are niche market that only counted less than 10% of the country's populace while the nearly all of the population are in medium-low income who unable and/or unaware to have designer's brands.
Domestic fashion industry vs local market trend
Tradition continues to be a great effect on design; contradict the creativeness and the consumers' demand. Despite the government effort to promote the cultural elements, there are growths of niche market population dominated by young generation from years 16 to 35 that are unlikely to wear traditional clothes. Numbers of fashion designers create an upgrade version of fashion using traditional textiles but designers with similar fashion lines are turning up and amounts of consumers trend are decreasing, backed with the progress technology such as internet which help them to become more alert to the fast paced changes in international fashion craze.
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