US end-market analysis for Kenyan textiles and apparel

Author
East Africa Trade and Investment Hub
Organisation
USAID
Publication Date
07 December 2017

The apparel market in the United States (U.S.) is the largest in the world with a market value of $343 billion. In 2016, the U.S. imported apparel worth $105 billion, up from $88 billion in 2015 and $82 billion in 2014.1 U.S. consumers spent $312 billion on apparel.

Ten countries account for almost 80 percent of all U.S. apparel imports with China topping the list with a 30 percent share. While Kenya does not yet stand among these countries, there is an opportunity for Kenya to take advantage of its trade preferences under the African Growth and Opportunity Act (AGOA) to increase its exports to the U.S. market. Since AGOA was signed for an additional ten-year term in 2015, there has been a growing trend toward sourcing and importing apparel to the U.S. If more stakeholders in both countries realize AGOA’s full potential, Kenyan apparel exports can continue to climb.

This report focuses on six target product opportunities for Kenyan exporters:

  1. Knitted Shirts in Synthetics for all genders and ages
  2. T-shirts in Cotton and Synthetic for all genders and ages
  3. Sweaters in Synthetic for all genders and ages
  4. Woven Pants and Shorts in Cotton and Synthetic for all genders and ages
  5. Woven Shirts in Cotton and Synthetic for all genders and ages
  6. Dresses for Women and Girls in Cotton and Synthetic as part of SME products

These products were determined by volumes and trends and are not unique to Kenyan production. However, these products offer opportunities for large duty savings under AGOA. The report details the channels of distribution, competition, potential buyers, promotional activities and a list of selected trade fairs that could enhance Kenya’s ability to compete in the U.S. market.

Based on the identified constraints and challenges in Kenya and the U.S., the report offers recommendations for increasing sector export competitiveness and proposes an action plan with strategic sector objectives, actions, outputs and other items for implementation.

Critical take-aways include the following:

  • Duty savings alone can be enough of a value add to entice U.S. buyers. Conversely, transport costs and other constraints could be a limiting factor. Therefore, reaching an advantageous goal for both the buyer and supplier requires working with each buyer, product and supplier to align parallel criteria on a case by case basis.
  • AGOA has the potential to be an efficient process for Kenya’s private sector manufacturers once there is full understanding of the process. With training, certifications and logistics improvements, this process is bound to become increasingly more efficient.
  • The U.S. buying community does not fully understand the benefits of AGOA. Kenya’s AGOA suppliers and spokespersons could play a role in educating the U.S. market and bring about new buyer linkages during trade shows.
  • Although most of the target products in Section 2 are ready for export to the U.S., the best matched category list in Section 4.1 is recommended for promotion in the U.S. market, based on volumes and trends. Even dresses, which make up a lower trade volume, should be promoted as part of the Small and Medium Enterprises (SME) business in Kenya.
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