Although the European Union is already a fact, the most important aspect of the process of full unification is the harmonisation of rules. In the EU countries not all the regulations have yet been harmonised. Work is still in progress in the fields of environmental pollution, health, safety and quality.

Distribution channels differ greatly across the EU member states. The UK has a high concentration of distribution, which is reflected in the relatively low market share of independent retailers. The southern member states, Portugal, Italy and Spain, however, have high market shares for independent retailers. These retailers buy mainly from manufacturers and wholesalers/importers, contrary to Germany and The Netherlands for instance, where many independent retailers are members of buying co-operations.

Specialists (independents and multiples) accounted for 57 percent of clothing sales, but a growing role is played by non-specialised distributors. Other important developments are the increasing integration in the value chain, increasing concentration and growing internationalisation. This also means increasing competition between branded labels, private labels and even non-branded products.

For that reason most of the major retail organisations have set up their own buying organisations in low-labour-cost countries. Bangladesh is one of those. Germany is the greatest market for outerwear in the EU. The highest growth rates are in the UK and Spain, while France and Italy showed a moderate growth. For the other major EU markets including Norway, a moderate 2-3 annual growth is forecasted for the coming years. In recent years, a shift from dresses to trousers/jeans and skirts has occurred regarding women's clothing consumption. The focus on casual and leisurewear will be continued for the coming years, but to a much smaller degree. Imports from developing countries are important and still rising in almost all product groups, in particular for casual and leisure product groups, but also for woven shirts, babies' garments and accessories like scarves.

Demand for outerwear in the EU will continue to increase and the number of garments purchased per head of population will continue to rise, but prices will not follow this growth rate.

To satisfy the requirements of European importing companies, the exporters in developing countries will be faced with increased demands for higher quality and environmentally friendly products.

In the EU, the role of wholesalers/importers will slightly decline, while the role of clothing and specialised outerwear multiples and, to a lesser degree, buying groups or franchise formula will increase in the coming years. In many European countries, the distribution of outerwear is dominated by a small number of retail organisations. On one hand there are specialty multiple stores (like Etam Lingerie, Hunkemöller) and on the other hand there are more generally oriented department (Debenham, KarstadtQuelle) and variety stores (Marks & Spencer, Hema), clothing multiples (Hennes & Mauritz, Zara, Etam, C&A), textile discounters (Zeeman), value retailers (Matalan, Peacock), hypermarkets (Hypermarchés) and supermarkets (Aldi, Lidl, Tesco) just to give some example.

Depending on its position in the market, the functions of a particular distribution organisation will be linked with up-or-downstream organisations with the same kind of specialisation. It is also possible for a given organisation to take over (some of) the functions of the latter, in order to improve competitiveness (vertical integration). For instance, manufacturers, agents and retailers may also function as importers, while wholesalers may also be manufacturers (vertical integration).

Each of these groups has a different approach to business and the market, with its own specific interpretation of the marketing mix.

The writer is an international consultant of United Nations Industrial Development Organisation posted in Dhaka. Bertorelli can be reached at [email protected].