Domestic Economy

Garment Sales at Huge Discounts in Iran: Too Good to Be True

Too Good to Be True
Too Good to Be True

Sales offering discounts of up to 70% are really hard to miss these days in Iran’s garment market, most of which are floated by sellers of foreign apparel.

“How much profit do they make when they are offering a 70% discount?!” a member of Iran Textile Exporters and Manufacturers Association was quoted as saying by IRNA.

According to Reza Mohammad-Jafar, there are three types of businesses with high profits.

The first type is when the outlet sells Turkish garments made by brands that produce in bulk, offering 30% discount if they are not sold within a month, 50% if they are not sold within 40 days, and up to 70% thereafter.

“This system is harmful for any market or country,” he said.

“These Turkish companies, by using connections, quickly distribute their products in the best shopping centers in Iran and hit domestic producers really hard.”

Another business model is when sellers import fake brands and sell them under the name of famous manufacturers at high prices. Taking advantage of this method, some offer discounts of up to 70% and customers assume they are making an extremely economical purchase.

And the third business model common in the Iranian apparel market, according to Mohammad-Jafar, concerns popular global brands getting rid of their out of fashion products in bulk (sold on the basis of their weight).

“Many distributors buy these products at low prices and then sell them in local markets. Not to mention this practice, too, does a number on the domestic industry,” he said.

Mohammad-Jafar explained that although this business model is not limited to Iran, many other countries move to protect their domestic producers by levying high import tariffs on such products.

Referring to the domestic manufacturers’ low profit margins, the association member said they tend to look for ways to reduce costs when it comes to buying machinery and raw materials or hiring human resources, which lowers the quality of products.

Speaking to Financial Tribune at the Fifth International Apparel Exhibition, otherwise known as IRAN MODE 2017, a member of the board of directors of Iran Textile Exporters and Manufacturers Association, Amin Moqaddam, noted that the government puts illegal apparel imports at $2.5 billion per year, but the real figure is more than double this amount.

Moqaddam put the value of Iran’s apparel market at $11 billion.


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