43% of fashion supply chains shifted sourcing locations in 2025

More than two out of five fashion supply chains shifted their sourcing locations in 2025, marking one of the most significant geographic reshuffles in recent years. QIMA, the Hong Kong-based quality control and compliance firm, found that 43% of respondents to its annual survey moved at least some production to new countries, driven by geopolitical uncertainty, tariff concerns and impending regulatory deadlines in major consumer markets.

Which countries gained sourcing share in 2025?

The survey data points to clear winners among production origins. Bangladesh, India and Turkey emerged as the primary beneficiaries of sourcing shifts, attracting buyers seeking to diversify their supplier bases beyond traditional manufacturing hubs. Southeast Asian nations including Vietnam and Indonesia also captured new orders, particularly from companies looking for alternatives within the region.

The trend reflects a broader pattern of nearshoring and friendshoring, with buyers prioritising proximity to end markets and perceived geopolitical alignment. Turkey's geographic position between Europe and Asia has made it especially attractive to European retailers, whilst Bangladesh continues to leverage its cost advantages and established textile infrastructure. India's diversified manufacturing base, spanning both mass market and premium segments, has enabled it to capture a wide range of sourcing mandates.

What drove supply chain shifts in 2025?

Three main factors combined to accelerate sourcing diversification last year. Geopolitical tensions, particularly between major economies, pushed companies to reduce concentration risk in any single country. The threat of new tariffs or changes to existing trade agreements prompted buyers to establish production capacity in multiple jurisdictions. Regulatory requirements, notably the European Union's sustainability and due diligence rules, forced brands to reassess their supplier networks and ensure compliance capabilities.

The survey also highlighted operational considerations. Lead time pressures and the desire for greater supply chain agility led some buyers to shift production closer to their primary markets. Labour cost inflation in established manufacturing centres motivated others to explore newer, lower-cost origins. Quality and compliance infrastructure, however, remained critical selection criteria, limiting the pool of viable alternative locations.

Which origins lost ground?

Whilst QIMA's survey focused primarily on where companies moved production to rather than from, the reshuffling necessarily implies lost share for incumbent suppliers. Countries with highly concentrated production bases face the greatest pressure as buyers deliberately diversify their sourcing footprints. Regions perceived as carrying elevated geopolitical risk or those struggling to meet evolving compliance standards are vulnerable to gradual erosion of order volumes.

The data suggests that diversification does not always mean abandonment. Many buyers adopted a deliberate strategy of maintaining existing supplier relationships whilst adding new origins to their networks, thereby reducing rather than eliminating concentration. This measured approach reflects the practical challenges of shifting production, including the need to qualify new factories, transfer technical knowledge and maintain quality standards.

How are compliance requirements shaping sourcing decisions?

Regulatory pressure is reshaping the sourcing landscape as much as traditional factors like cost and lead time. The EU's supply chain due diligence requirements, which demand greater transparency and accountability from brands, have forced companies to map their supplier networks in unprecedented detail. This scrutiny has revealed risks and gaps that were previously obscured in complex, multi-tiered supply chains.

Buyers are increasingly favouring suppliers and countries with stronger compliance infrastructure, including credible audit mechanisms, worker protection systems and environmental management capabilities. This trend advantages origins that have invested in upgrading their regulatory frameworks and manufacturing standards, whilst putting pressure on those perceived as lagging. The compliance dimension adds a new layer of complexity to sourcing decisions that were once dominated by price negotiations and production capacity.

What is the outlook for 2026?

The sourcing shifts that accelerated in 2025 show little sign of slowing. Geopolitical uncertainties persist, regulatory timelines continue to advance and the competitive advantages of diversified supply chains have become clearer to industry participants. Buyers who delayed action last year face mounting pressure to demonstrate supply chain resilience and compliance readiness to investors, customers and regulators.

The pace of change will likely vary by company size and segment. Larger brands with global distribution networks and sophisticated sourcing teams are better positioned to manage multi-country production footprints. Smaller players may struggle with the fixed costs and complexity of diversification, potentially concentrating their sourcing in one or two carefully selected origins rather than spreading orders across many countries.

Supplier countries themselves are adapting to the new environment. Governments and industry associations in both established and emerging manufacturing hubs are investing in compliance infrastructure, trade facilitation and workforce development to attract and retain international buyers. The result is a more competitive and dynamic global sourcing landscape, with implications for costs, lead times and the strategic priorities of fashion supply chain executives.

Key considerations for sourcing decisions

• Geographic diversification reduces concentration risk but increases management complexity and fixed costs
• Compliance infrastructure and audit credibility are becoming as important as traditional cost and quality metrics
• Nearshoring offers lead time benefits but may carry higher labour costs than traditional offshore locations
• Supplier qualification and production ramp-up timelines can extend to 12 months or more for complex products
• Maintaining relationships with existing suppliers whilst adding new origins requires careful order allocation and planning