- Oppurtunity for disruption
By the end of 18th century, industrial revolution made a huge impact in the textile market. The competition, was dominated by mass manufacturers almost over night. By the turn of the 20th century, traditional textile manufacturers, were completely run over by industrial machines. Seems another seismic shift is just around the corner for textile. The sheer power of technology and innovation is setting the scene for the new ecosystem, “ textile and fashion technologies ”.
Before jumping ahead, let’s take a look at some of the metrics from the Turkish market. Turkey quickly became an important textiles player in the global market with a share of 4.33% of total textile market. The industry annualy provides jobs for at least 1.5 million people, and by itself constitutes approximately 10% of the entire Turkish economy. Going great so far. Yet the next metric is an eye opener for the curious minds. 30–45% of the annual Turkish textile export, which comes to $2 billion export annually, is merely raw materials (Source 1).
Revenues go up, but the profit goes down. Familiar ?
Turkish textile market is more price sensitive, then value sensitive. Being dependent on raw material sales and a cheap pricing strategy are huge risks. Especially when the textile industry has begun to fall under the influence of players who are unfamiliar to textile.
The industry used to have high capex and opex barriers, simply thinning the competition. Technology getting cheaper and accessible by day, the barriers that used to exist, are now a thing of the past. The know-how required in textile business, is partially being transferred by the machines and algorithms.
So the scene is set for the “disrupter” to appear.
And appear it will.. deep tech investments for textile are already being funded by rather unfamiliar players. Health service providers, technology giants, sports companies and financial sector. These companies already realized the value in disrupting textile industry; and reshaping it to create more value for their shareholders.
To understand the magnitude and grasp the urgency of disruption in textile; first we need to know the “Why”
- Changing consumer profile and demands...
The consumers want more control on almost every stage of production. The purchase,must run through an ethical supply chain. A negative impact on nature, is not acceptable. We all know what this means, an increase in production costs. Maybe that's why, GenZ prefers sharing economy business models, instead of owning things. The new paradigm is value sensitive, not cost sensitive.
- Healthcare — The super industry
We outlive, our 19th century ancestors by almost 40 years on average. Health and healthcare services demand is higher than ever. The demand is the driving force, for the age of healthcare and biometric data in textiles.
Interpreting biometric data instantly with wearable products. Textiles that communicate autonomously with your doctor. Your tshirt, preventing your next heart attack. A future where our clothes, understands our needs better than us via biometric data. Smart gloves and glasses... you name it.
- The green regulation era
“In a limited resource planet like Earth, we have an unsustainable industry design” Textile, naturally is getting its share from green regulations.
· We buy an average of 40 kilograms of textile products a year and throw away 30 kilograms annually.
· Textile industry spends 7500 liters of water to produce a single jean.
· Textile manufacturing pollutes the water with 20,000 different chemicals (mostly carcinogens).
· The textile industry alone, produces 8% of the greenhouse gas produced on the planet.
· Between 2000 and 2014, textile production doubled (Source 2).
- Open innovation — The “How”
Changing consumer demands, new regulations and the risk of losing the market to new technology firms.
How can the textile and apparel industry deal with such unknowns?
Workinlot corporate open innovation process design, will give you an idea about the process. Open innovation lets us collaborate with external talent or technologies to work with. But to get there, the corporation has to identify the possible innovation focus areas. Identified focus areas are then prioritized according to, the technology and local ecosystem supply matrix. Then, matchmaking and a collaborative project management is in order.
Lets take a look at some global textile open innovation examples and their different focus points:
Smart X matchmakes around a thousand textile SMEs, with startup solutions in 3 years. An aggregator of solutions, as well as an open innovation platform and an investor.
In Germany, Stoff in Kopf launched the 4th textile tech startup program this year with the support of the German government and the textile institute. Creating a portfolio for German textile companies, Stoff in Kopf also collaborates with investors, also creating a funnel for venture capital.
Indian textile industry giant Fabric, accelerates and invests in textile tech startups. Focus areas; leather alternative materials, smart clothing technologies and wearable accessory technologies.
All textile technology accelerators have identified different focal points. Dutch FashionForGood focuses on production transparency and packaging, Italian Fashion technology accelerator digital customer experience solutions, French La Caserne and British Factory 45 sustainable and ethical production technologies, Italian Gellify industry 4.0 and supply chain optimization.
- Success stories…
The history of textile technology accelerators goes back to merely last 5–8 years. Success stories have already emerged…
Evru, produces new textile materials, is a candidate to become a global giant thanks to its partnership with Levis. The investment they received in the first round is over 10 million $.
Great circular design and circular business model, Pineapple Anam produces the leather alternative Piñatex material from pineapple leaves.
MycoWorks, has already received an investment of $62 million for their leather alternative materials.
OrosApparel producer of smart isolation suits with Nasa technology, and received an investment of 12 million $ so far.
Footfalls and Heartbeats, the startup that provides the opportunity to use all raw materials as sensors with smart fabric production, has become a new generation supplier for sports and health solution manufacturers.
- Success stories from Turkey
The dynamics are not different for Turkey.
Local startup Unomoi, invested by Nevzat Aydın, Gizia and Eren Holding, are testing a successful and innovative business model for textile industry (Source 5).
The wearable tech B2B startup Thread in Motion, received an investment of $1.1 million from StartersHub, İnci Holding Vinci venture capital and Sabancı Ventures (Source6). Their collaboration with the German corporations, meant new products, better service and bigger market penetration.The venture continues to grow in several foreign markets.
As Turkish high tech investments increase, we will see more startups scale and create international impact. With that being said, technology is not the only shot at innovation. New business models, such as Unomoi's creation, have tremendous potential to transform the industry.
- The Future of textile — “BigTech”and ” Healthcare”
Think of BigTech or Healthcare companies typical customer journeys. They intersect with every single point of our lives. Making them, rightfull stakeholders on the future of textile.
We come across more Tech companies running textile startup acceleration programs, than textile companies. The reason why is simple economics. A verified demand, is the only logical reason needed for a textile technology startup to emerge. When private companies cannot create this demand, textile tech programs initiated by venture capitals and technology giants lead to the establishment of new textile startups.
Startups, are the technology manufacturers living in the abyss of innovation. They make a ton of mistakes, while taking tons of risk. Most of them go out of business before you hear about them. Making mistakes, learning and scaling; It is a dynamic that, no well-established and layered corporation can beat.
Atilla Erel Istanbul 2021
Sources:
1: Teknik Bilimleri Dergisi Cilt 9, Sayı 1, 32–41, 2019 Türk Tekstil Endüstrisi Genel Durumu Seval UYANIK, Dilan Canan ÇELİKEL Gaziantep Üniversitesi, Teknik Bilimler MYO, Tekstil, Giyim, Ayakkabı ve Deri Bölümü, Gaziantep
2: The World Bank featture story “How Much Do Our Wardrobes Cost to the Environment? “ https://www.worldbank.org/en/news/feature/2019/09/23/costo-moda-medio-ambiente
3: Avrupa Birliği ticaret emisyon sistemi AB ETS https://ec.europa.eu/clima/policies/ets_en
4: Cosme Avrupa Birliği girişimcilik destek programı https://ec.europa.eu/growth/smes/cosme_en
5: Lüks kiralık kıyafet aboneliği girişimi UnoMoi, 400 bin dolar yatırım aldı https://webrazzi.com/2021/06/16/luks-kiralik-kiyafet-aboneligi-girisimi-unomoi-400-bin-dolar-yatirim-aldi/
6: Thread In Motion, Sabancı Ventures’tan yatırım aldı https://webrazzi.com/2020/09/24/thread-in-motion-sabanci-ventures-tan-yatirim-aldi
7: Erman Taylan — Türkiye’den çıkan ‘Textile Tech’ girişimi Thread in Motion, akıllı ve dokunmatik kumaşlar üretiyor Webrazzi
8: Turkish Textile export by countries Toplam Tekstil ve Hammaddeleri Sektörü İhracatı Performans Raporu — ITKIB
