Diversification has quickly turned from “nice to have” to “need to have” as an escalating trade war between the U.S. and China has made the industry’s number one manufacturing destination a more expensive choice. In a challenging climate, brands are also becoming more risk averse, and a broader sourcing map that goes beyond the “China plus one” strategy helps to hedge against headwinds.

“The importance of diversification—and not just to one other area plus China, but to many other geographical locations in several different continents, potentially—is seen as an importance and an urgency, regardless of the logistical frictions that may exist in pursuing such a strategy,” said Yossi Nasser, CEO of Gelmart, which manufactures intimates for major retailers like Target and Walmart.

Although it also has operations in China, Gelmart is leaning on its factories in the Philippines amid ongoing trade tensions between Washington and Beijing. More than just a means to circumvent a tariff spat, Nasser noted the Philippines is a sourcing destination that should be on the industry’s radar. 

Listen to this episode to hear Nasser speak with Sourcing Journal's sourcing and labor editor Jasmin Malik Chua about what makes the Philippines a solid choice for garment production and how Gelmart is strategizing for long-term resilience.

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