The lot of clothes we wear is the product of nature. Most of the materials like wool, cashmere, cotton, etc are extracted from animals and plants. Cashmere is a soft fabric taken from goats. The climate condition in Mongolia makes it a suitable for the high production. This industry is a global leader and is also the highest economic contributor in the country.
Apart from this, other major sectors of the country are mining, tourism, IT startups, energy, etc. Follow us to know more about how the cashmere industry has led to economic growth and its challenges.
Cashmere Industry Growth in Mongolia
In Mongolia, cashmere production is from a long back. The suitable climatic conditions and goats have led to high-quality production. Due to the rising demand for luxury goods from people, there has been a high requirement for cashmere production.
As the demand has increased, Mongolia should not opt for ways that affect the quality. Look for sustainable practices that also address environmental concerns and raise income. Along with these, the Mongolian government has taken initiatives and policies to support the cashmere industry. For example, training, subsidies, grazing field development, etc.
Mongolia stands second across the globe in the production of raw cashmere. The country produces approximately around 40% of the world’s raw cashmere. This raw cashmere is then processed into various products, including yarns, fabrics, and finished garments. Gobi Cashmere is the main production company in Mongolia accounting for 21% of world cashmere production as of 2006. GOBI also promotes suitability along with business growth.
Economic Contribution
The cashmere industry of Mongolia provides a GDP of the county of about 5% and also numerous textile inductees giving employment to more than 20,000 people. As it is the high economy driver the major percentage of people is involved in cashmere production. Apart from this, there is also huge income generated from the export system due to the high value of cashmere.
The cashmere industry has been the economic backbone for many families in rural areas of Mongolia. Hence, as a primary income, it provides a stable financial status to people and improves their way of living.
Challenges Facing the Cashmere Industry
Environmental Issues
Overgrazing is the top issue caused due to cashmere goats in Mongolia. Hence taking preventive measures to reduce the problem is necessary for this industry. It has also led to the creation of barren land and effects sustainability.
Quality Control
Production of quality goods is another prominent challenge in the cashmere industry. If there is a slight difference in the quality of the product will affect the company’s reputation on a global scale. Hence maintaining richness and excellent quality are a must for Mongolia to maintain its position.
For more market insights articles visit APAC Business Standard.
Export Issues
Mongolia is highly dependent on other countries especially China for export. This increases the cost and demand volatility. Therefore, Mongolia needs to focus on alternatives for export and supply chain management.
Market Competition
Mongolia faces stiff competition from other cashmere-producing countries, particularly China. Chinese manufacturers often have more advanced capabilities and can produce cashmere at lower costs. If Mongolia wishes to stay ahead in competition and Marketing Strategy, It must focus on production and innovation.
Conclusion
The cashmere industry is the major economic producer in Mongolia. It helps in getting a high GDP, exports, regular earnings, and country growth. The growth of the Mongolian cashmere industry is interesting and has led to a high economy. Apart from this, this industry has serval challenges from quality production to export dependency which also has an economic impact. Hence, working on them along with implementing sustainable practices Mongolia can aim to rule the industry.