COVID-19 cases were first detected in March this year in Bangladesh, leading to countrywide shutdown that forced garment manufacturers in the country to wind up operations for almost a month before resuming work, but on a limited scale.
Elsewhere, especially in Europe and the USA, by then the epidemic had started to show devastating ramifications both economically as well as in terms of lives lost. Consequently, a large number of brands and retailers had to close down their stores with business taking a back seat.
Luxury apparel maker Canada Goose closed all its retail stores in North America and Europe from 17 March, Japan’s Fast Retailing temporarily closed all Uniqlo clothing stores in the United States, GAP closed over 100 stores, GUESS closed all its retail stores in the United States and Canada from 17 March, Zara owner Inditex temporarily closed its stores in Spain from 14 March while Levi Strauss & Co. closed all its stores in the United States and Canada on 16 March. Similar was the case with all other big names that wound up businesses temporarily, thereby disrupting supply and production chains.
A few months down the line, now as things have started improving in many parts across the globe, businesses are slowly resuming operations. But consumer sentiments being low, demand hardly showing any signs of bouncing back amidst job and salary cuts, the demand-supply scenario is anything but normal. Also to be considered is the loss that brands and retailers had to incur due to the prolonged business disruption. All these seemed to have changed the market dynamics, which if at all, will take some time to be back to normal again.
“There is a very cautious approach by brands and retailers. They are trying to reduce inventory, determine consumer demand and cut cost,” Zakariah, Director, Posh Garments told Apparel Resources, adding that consumer spending is at an all-time low and may even remain the same for some time now, as people’s prime concern would be on other necessities that are vital for survival.
Consequently, Wasim feels there would be change in sourcing strategy whether it is in terms of quantities or price points.
“My premonition is buyers and retailers will reduce order quantities and price to reduce inventory, and will to try increase the demand,” explains Wasim, to align with which he thinks manufacturers would have to take in more orders with reduced quantity per style and try to cut cost.
Rumana Rashid of East West Industrial Park agrees with Wasim’s views, “Yes, there will definitely be reduction in order quantities for few quarters. Market will be slow and price point will be more competitive.” She is hopeful that a little cooperation between the buyers and suppliers and changes in credit term policy could help the industry make it through the trying times.
Wasim is of the opinion that garment makers in Bangladesh may have to make some necessary changes in business approach while being more cautious to be able to withstand the recurrence of pandemic-like situations in the future.
Seeking insurance cover for raw materials and garments in event of any loss, increasing use of special fund to import raw materials instead of deferred letter of credit, and increasing storage facility of finished goods (garments) are some of the aspects Wasim thinks are very much needed now from a manufacturer’s perspective. On the other hand, Rumana feels variation in product offerings with an addition of virus-protective clothing needs to be considered for the future now.
Also, that Europe and the USA are two main apparel export destinations for Bangladesh, both of which have been hit hard by COVID-19 and may very well go into recession in the immediate future, Wasim is of the opinion that market diversification would be of significance in the days to come.
China, India, Russia, Australia and Scandinavian countries may reap good dividends in the post-pandemic period, claims Wasim, indicating towards the fact that garment makers in Bangladesh are very much in cue with the changing times and not only that they are trying to be versatile and flexible enough to go with the new world order that might emerge after the epidemic is over.