Assignment on

Impact of COVID-19 in Apparel Industry

Course code: 619.3
Course Title: Managerial Accounting

Submitted To

Fahmida Akhter
Assistant professor,
School of Business,
East Delta Universit.

Submitted By

ID Name Remarks
201003106 Md. Sumon
201007206 Mohammad Irshadul Haque Nahiyan
201004906 Sohel Mahfuz
201000706 Md. Anwar Hossain Khandakar
201006506 Nayan Kumar Das
191007906 S. M. Mushfiqur Rahman

Date of Submission: 10th April 2020

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 An Overview of Apparel Industry
i i i i

(Name: Md. Sumon, ID: 201003106)

i i i i

An ioverview iof ithe iglobal iapparel iindustry:

Initially iclothing iwas iused ito ishield ithe ihuman ibody ifrom ienvironmental iconditions. iLater ion, ias
ithe iwheels iof itime istarted ispinning, inew itrends iemerged iand imanufacturing iof ifashionable

igarments icame iinto iexistence. iApparel iindustry iproduces ifinished iclothing isuch ias ikid’s igarments,

imen’s iand iwomen’s iclothing, iand iother iintimate iapparel. iManufacturing iapparels iis ione iof ithe

imost iin-demand ibusinesses itoday. iFads icome iand i go, iparticularly iin ithe ifashion iworld. iIn iorder ito

iremain icompetitive, iapparel imanufacturers iseek ito iexpand itheir ibusiness iin ivarious iways. iFactors

isuch ias ishort iproduct ilife icycle, ivolatile ifashions, iunpredictable imarket itrends iand iimpulse

ipurchase inature iof ithe icustomer iare ito ibe igiven iutmost iimportance iby ithe imanufacturers iso ias ito

isustain ithemselves iin ithe iapparel isegment (Bhattacharya, D and M. Rahman., 1999). i

Growth iof ithe iIndustry:

Apparel iindustry iplays ia ipivotal irole iin ideveloping ia icountry’s ieconomy iin iterms iof irevenue
igeneration iand icreation iof iemployment. iThe iindustry iis iundergoing ia idrastic ichange idue ito iglobal

isourcing iand ihigh ilevel iof iprice icompetition. iFavorable idemographic ifactors, irise iin idisposable

iincomes, ichange iin iconsumer ibehavior iand ia isubstantial ishift itowards ibranded iapparel ihas iresulted

iin ia ipositive igrowth iin ithe iglobal iapparel imarket. iGlobal iexports iof iapparel iwhich iwas i108 ibillion

iUSD iin i1990, iincreased idrastically ito i453 ibillion iUSD iin i2004, iwhich iis ia ipositive iof i138%

iincrease iduring ithe ilast i14 i years. i Industry ileaders icontemplate ian iincrease iof i600 ibillion iUSD iby

i2014 iwhich ipromises ia ipotential imarket ifor iefficient iproducers. iAsian icountries icontribute ito ia

i50% iof ithe itotal iglobal iapparel iexports (Yamazawa, Ippei., 2015).

China:
China iis ithe ilargest iexporter iin ithe iworld iand iis ia imajor isourcing ihub ifor iapparels. iIts ieconomic
ipolicy iand iavailability iof icheap iand iabundant ilabor ihas imade iit iclimb iup ithe iapparel iladder. iTheir

iapparel iexports ihave iincreased iby i25% iin i2006 ifrom i2005. iEconomic ipolicies iregarding iFDI ihave

ialso ihelped iChina ito iincrease iits iapparel iexports ito ia iconsiderable iextent. i Investment iin

imachineries iin ithe iapparel isector iis i$ i1 imillion. iJapan, iHong iKong iand iUSA iare ithe ilargest

iimporters iof iChinese iapparels. iShort ilead-time, ilarger icapacity iand iwell-developed iinfrastructure,

iavailability iof iprofuse iand icheap ilabor iand imanufacturer’s iflexibility iin iproduct iofferings

icontribute ito ithe icountry’s isuccess (Steedman, H. and K. Wagner., 2008).

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An ioverview iof ithe iBangladesh iapparel iindustry:
The igarment iindustry iof iBangladesh ihas ibeen ithe ikey iexport idivision iand ia imain isource iof iforeign
iexchange ifor ithe ilast i25 i years. iAt ipresent, ithe icountry i generates iabout i$5 ibillion iworth iof iproducts

ieach i year iby iexporting igarment (Alamgir, Mohiuddin., 2010). iThe iindustry iprovides iemployment

ito iabout i3 imillion iworkers iof iwhom i90% iare iwomen. iTwo inon-market ielements ihave iperformed ia

ivital ifunction iin iconfirming ithe igarment iindustry's icontinual isuccess; ithese ielements iare i(a) iquotas

iunder iMulti- iFibre iArrangement1 i(MFA) iin ithe iNorth iAmerican imarket iand i(b) ispecial imarket

ientry ito iEuropean imarkets. iThe iwhole iprocedure iis istrongly irelated iwith ithe itrend iof irelocation iof

iproduction (World Bank, 2005).

Bangladesh's itextile iand iapparel iindustries ihave isuccessfully iovercome ichallenges iand iare inow
iflourishing idespite ithe iongoing iglobal irecession iand istiff icompetition iwith ia inumber iof icountries

iwith istrong ibackward ilinkage iindustries. iBig iexporting icountries ilike iChina iand iIndia ihave

irecorded islowdowns ior ideclines iin iexport iin irecent imonths, ifollowing idouble-digit iexpansion iover

ia iprolonged iperiod. iOther ieconomies ilike ithose iof iMalaysia, iThailand, ithe iPhilippines iand

iCambodia iare ialso iexperiencing idecline iin itheir iexports iof itextiles iand igarments idue ito ithe

ieconomic imeltdown iin iNorth iAmerica iand iEurope (BGMEA, 2012).

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 (Name: IRSHADUL HAQUE , ID: 201007206)

Trend Analysis 2020

E-commerce bond with Social Media

The World now-a-days is smaller than afore, thanks to technology. Android, IOS, and Windows
combined with the internet made it all easy for both consumers and companies. Start-up fashion
companies or retails need not invest enormous sums of money for building up their empire. Anyone
can easily start by introducing their business through an online platform, better known as E-
commerce. Because the barriers to entry are very low. Since this is a Red Ocean due to digitization,
the buyer power has exceeded limitlessly. On the contrary, many retail stores have shut down
resulting from this upgrade.

According to Nosto, followed by Shopify, personalization is going to be a critical buyer behavior

& marketing tactic in the foreseeable future. ‘Social Media Marketing’ is the perfect match for
‘Fashion Trends’. However, Instagram tops the list of average engagement per post with 13.71 per
thousand followers.

- Data via TrackMaven

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Polishing the Nature
Since the environmental pollution has gone to uncontrollable limits, an agreement was signed by
32 companies called the “G7 Fashion Pact”. Their goal is to have ‘Zero-Carbon Effusions’ by the
year 2050. This will be done by reduction of chemical waste passed through water passages to
oceans. Furthermore, by 2030, one objective is elimination of disposable plastics in Business-to-
Business & Direct-to-Customer; the other is attention towards climate change & biodiversity
because they are willing to shift to 100% ‘Renewable Energy’.

Apparel 4.0 (The Ultra-modern Technology)

● India (Raymond) - Sewbot Technology

● China - Augmented Reality, Smart Clothing, and 3D printing
● Vietnam - Additive Manufacturing, Radio Frequency Identification Device (RFID), and
ERP
● Bangladesh
○ Mohammadi Group - Automated Knitting Machines
○ Envoy Textiles Ltd. - Robotic Autoconers
○ DBL Group - Automated dyes and Chemical Dispensing System
○ Beximco Group - AI-infused ThreadSol

Amongst the above countries, some have already introduced and mastered advanced techniques,
while others are gradually adapting to Apparel 4.0.

Creative Technology
Through the use of ‘online sizing’ one can easily fit themselves by scanning them into the
software. This helps in real-time sizing, anywhere at anyplace. Taking measurements of old clothes
is backdated now.

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Rhone Apparel had an incremental revenue of 20.4% within a year by using this technology.

‘Onsite Search’ is another great Machine Learning & Artificial Intelligence technology. The
autocomplete of Fashion Nova makes it user-friendly for consumers.

Worldwide Digital Apparel

According to Statista, China and the US are leading the E-commerce market with tradings of $740
and $561 billion dollars respectively. $460 billion is the share of the remaining 8 countries, which
is lesser than the USA alone. Therefore, from this data it can be concluded that 73.88% of the E-
commerce trading happens in 20% of the countries (among the Top 10).

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The above statistic, taken from Statista, shows us an illustration of the power of online retail shops.
These are the Top 5 countries where at least 67% of the people chose e-commerce over physical
retail stores. People in Asia prefer home delivery the most.

Global Overview (Facts & Figures) [SOURCE: STATISTICA]

Revenue of Global Apparel, 2020: $1,939.448 billion

Average Revenue per Capita, 2020: $260.59
Demand of Global Apparel, 2020: Asia Pacific, 38% (2020)

Key Apparel Markets

❏ Largest Segment, 2020: Women’s Apparel {$994.321 billion}
❏ Highest Revenue Generation, 2020: USA {364.868 billion}
❏ Men’s Apparel Sales: $420 billion
❏ Female Apparel Market Profit (China): $117.6 billion
❏ Global Apparel Resale Market Value: $24 billion
❏ Largest Global Undergarments Market: China

Leading Companies
❏ Highest Global Apparel & Footwear Sales: H&M {$24.3 billion}
❏ Largest Apparel Company (by revenue): VF Corporation {$13.8 billion}
❏ Top Luxury Apparel Company: LVMH - Moët Hennessy Louis Vuitton S.E.
❏ Most Valuable Apparel Brand: NIKE (No.14 in World’s Most Valuable Brand 2019 -
FORBES)

The Forbes Global 2000 in 2019 charted Christian Dior (French) at no.143 in global leading
companies list. In the apparel world. With the sales rise of $55 Billion, in 2018, Dior is currently
at No.1 position. In the same year, with a 19% profit margin, Nike (USA) is 2nd on the list; the

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Spanish fashion leader ‘Inditex’, owner of Zara, had a 6% rise amounting to $31 billion, which
secured its position in 3rd place.

According to the above data of WTO, published during the end of 2019 fiscal year, it can be
denoted that China is the current market ruler having an export figure of $31.3 billion, even though
they didn't have any changes since the previous year. Ensuring its 2nd place on the list with $28.4
billion & 11% increase, the only exporters closest to China, is European Union (28). However,
EU’s data is a joint statistic of multiple countries. A subline of EU is Extra-EU exports, which
exported $6.8 billion with a 12% elevation. Following the EU is Bangladesh with an export share
of $6.4 billion. It might be 3rd on the list, but countrywise it’s 2nd. Threat to the Bangladesh
market is Vietnam because it’s closing its exports numbers. Only a monetary difference of 0.2
billion is left amongst them. It has gained alarming shares of 21% & 13% in 2017 & 2018, whereas
Bangladesh managed to gain only 2% & 11% respectively. In 2017 & from 2010-2018, Vietnam’s
market share gain was higher than any other country. Hong Kong is having a rough time; all of its
market trades have been declining. India has also lost 11% apparel shares. The last noticeable
country is Cambodia, which has been having significant escalation in the global scale. On page-
59 of the report, it was mentioned that the top export in Cambodia is ‘Apparel & Clothing’.

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The above statistic illustrates the giants in the Apparel import market. European Union (28) not
only exports apparel but also imports apparel. 2nd in Export & 1st in the Import market with a
share of $38.4 billion. Their subline, extra-EU (28), also contributed an amount of $20 billion. The
USA might be 10th in the export market, but it is 2nd in the import market. Japan is the 3rd giant
with a contribution of $5.7 billion. Amongst the top 10 market importers, Republic of Korea
(16%), China (14%), and Switzerland (13%) have the highest import climb compared to previous
year.

According to the World Trade Profiles 2019 (Closing Date 31 May 2019)

Cambodia apparel and clothing top export pg 59

Top10 exporters and importers of clothing WTSR-2019 pg 120

Domestic Apparel Overview [SOURCE: BGMEA]

The market of apparel has expanded dramatically in Bangladesh. It has grown to have 4,621 RMG
factories in 2018-19 from 384 in 1984-85. This segment that generated only 3.89% of the total
export back in 1984-85; currently, is the backbone of the country contributing to 84.21% of the
total country’s export as in 2018-19. Out of the total RMG export of $34,133.27 million, Woven
& Knit exports are of $17,244.73 million (50.5%) & $16,888.54 million (49.5%) respectively.
The major apparel items exported are:
★ Shirts - $2,324.85 million
★ Trousers - $6,939.61 million

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 ★ Jackets - $4,384.81 million
★ T-shirts - $7,011.26 million
★ Sweater - $4,255.91 million

The Top 5 Manufacturers of Bangladesh [SOURCE: DHAKA

INSIDE]
➢ Ha-Meem Group
➢ Standard Group
➢ Beximco Group
➢ Palmal Group
➢ Nassa Group

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 “Analysis of COVID-19 effect on Apparel industry across the Globe“
(NAME: MD. SOHEL MAHFUZ, ID: 201004906)

Global Apparel industry get paralysed amid the ongoing deadly COVID-19. Top 3 leading
countries in apparel industry are starting to losing their shares in Apparel industry across the globe.
Amid the Coronavirus outbreak, This year is being nightmare and full of fears for the RMG
industry. Since brand stores are closed down all over the world and production has halted across
the globe. Buyers are cancelling the orders and manufactures remains in great tension with
production cost, raw material cost and mainly the wages cost of labour. Due to that pandemic
epidemic , Global supply chain has been disrupted heavily. As china has become the hub of raw
materials, most of the RMG companies are felt in shortage of raw material which severely will
effect on RMG production. Given below the havoc come towards the RMG industry :

1) According to the CEO of Spanish Taxtile giant Inditex (owner of ZARA) the company had
to shutdown temporarily 3785 boutiques from 7469 boutiques across the globe in 39 markets.
The company has earned profit for 3.6 billion euros in January-End which was expected around
to 3.8$ billion. Profit slashed in around 6%.
2) H&M the renowned Apparel company CEO, Helena Helmersson said that they have closed
down 3441 stores from the total 5062 stores across the globe. They are in nightmare for declining
their operation due to Coronavirus pandemic. Since they are broadly connected with chinese
market.
3) Adidas anticipates severe impact of epidemic outbreak on china sales based on information on
their fingertips.. A spokesman of Adidas narrates that revenues in china republic may in 0.8€
billion to 1€ billion decrease in the first quarter of 2020 compare to the previous year. Similarly
Profit generate in china forecast to decline 0.4 billion euro to 0.5 billion euro. Gross margin of
adidas anticipated to decrease 52% which is amounted to 2.1 billion euro to 2.16 billion euro .

4) Dublin based Apparel industry Primark has to close down all stores they are operates in every
country. They have lost sales of £650 million in a month according to a spokesman of Primark.
5) Vietnam’s garments maker will be worst sufferers amid the virus outbreak due to shortages of
materials supplies. As they imports 50% of raw materials from china. They key suppliers of
vietnams garments manufacturers are china , japan and south korea. The deadly COVID-19

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imposed all their key suppliers into lockdown due to countries safety issue. Last yer they has
imported 456.25$ billion as rose of 7.2% of their export.
6) Around 30% employers is to be lay off in Srilanka amid the Coronavirus havoc according to
Srilanka Apparel exports association (SLSEA) .
7) Amid the Ongoing outbreak of Novel Coronavirus, Indian Textile importers has been warned
that they could be in materials shortage by Clothing Manufacturers Association of India
(CMAI). Every year india exports cotton yarn $450 million cotton yarn to china. On the other
hand india imports $350 million synthetic yarn and fabric. India also imports 140$ zippers and
buttons from china. Having the ongoing tension of pandemic epidemic , The price of finished
goods will ruse 3%-5% due to crisis of those textile raw materials from china. Reported by P.
Chandrasekharan, secretary, CMAI.
8) European union and US are the biggest export market for Cambodia. Since the ongoing
Outbreak, Cambodia has to suspend their operations in 57 factories due to raw materials shortage.
In this unrest situation manufacturer Companies have laid off 15,000 workers in Cambodia.
Cambodia has 200 factories and 1,60,000 employers across the country. 80% of export earnings
comes from RMG industry and 16% gross domestic production (GDP) from this industry.
9) RMG industry is the spine of nation economy of Bangladesh which is horribly dented due to
massive expansion of ongoing pandemic epidemic. The Novel Coronavirus has forced to close
down almost all stores across the globe. In that ongoing situation Buyer Companies are not
accepting the orders made by 1059 Bangladeshi suppliers amounted to 920 million Pcs worth
2.90$ billion. In Bangladesh, already 4million workers have lost their job which is more than one
quarter of total manpower. According to BGMEA, cancellation of this huge orders already has
been havoc for national economy.

I
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10) BGMEA president Rubana haq has requested to fashion brands to be with their agreement
with garment factories. Only 6 brands Marks and Spencer, Inditex, H&M, kiabi, PVH, Target
have been response positively amid this Virus outbreak. They assured to pay and not to
cancellation of order.
11) Several company had cancelled their orders made on earlier including Tesco 550$million and
immediate behind Primark $273million worth. This is going to be very worst so far for the
suppliers. Fashion brand C&A also refused their order $166million worth and the company is not
paying Cost of raw materials and production cost which incurred for their orders. Scenario yet to
be shown, Spanish fashion giant Inditex (owner of Zara) has cancelled orders worth $109 million
and also not put any reply to mail.
12) Myanmar has shuttered about 10,000 employers and 20 factories has closed. Since Myanmar
imports 90% of its garments raw materials from china. Due to deadly COVID-19 china has stooped
to supplies those materials. Myanmar Garments Manufacturing Associations (MGMA) made alert
that 500 factories are to shut down due to materials crisis as situation get worse.
(S. M. Mushfiqur Rahman
ID: 191007906)

Recent Eurostat information show that the European apparel industry went through a tough year
in 2019, despite smart retail sales and export performances. This trend obtaining worse a lot
of and a lot of in 2020 because of the coronavirus happening.
A European Union poll with its members shows that eightieth of firms are already scraping
off employees for the protection of the workers; quite 1/2 them expect a call sales and production
by over five hundredth, making huge money disturbance. Data for 2019 show associate
degree economic retardation in Europe, with producing remaining struggling from Brexit and
trade frictions.
If we the figures for the apparel industry and article of clothing trades are in line there
with general situation. Employment has declining and so the European Union turnover evolution
turned adverse for the first time since 2012-2013 with a -2% opposite for this particular industry,
and a -1.3% for apparel industry, compared to 2018.
Because of the coronavirus’ happening, scenario can go a lot of and a lot of worse than we are
able to even imagine, as in March 2020 trade confidence fell dramatically. EURATEX is
conducting a survey among European companies: preliminary results indicate that quite 1/2 the
businesses expect a call sales and production by quite five hundredth.
Moreover, virtually nine out of ten firm’s are on the brink of face major money downside as a
result of the case and eightieth of firms is quickly peeling off employees. Each one out of four is
considering closing down the corporate. As we can see from the following chart just when this
industry in this region just starting to gain some momentum covid19 hits hard. Its going to fall
down dramatically.

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As the voice of the EU textile and clothing industry, EURATEX works to realize a
positive surroundings inside the European Union for style, development, manufacture
and selling of textile and article of clothing merchandise.
The EU textile and article of clothing trade, with over € fifty billion of exports, may be
a world player with success commercializing high accessorial worth merchandise on growing
markets round the world. Operating in conjunction
with EU establishments and alternative European and international stakeholders, EURATEX
focuses on clear priorities: associate degree formidable industrial policy, effective analysis,
innovation and skills development, free and truthful trade, and property provide chains.
Director General Dagger Vantyghem commented: “The EU and its Member States should do all
it takes to avoid wasting our trade. At constant time, this crisis is a chance to develop a brand
new blueprint for our sector; the Commission’s new EU Industrial Strategy offers a basis for
rethinking our business model.”

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EU, as representative of this industry and article of clothing sector, thinks about the crisis and
therefore the pressure on the functioning of the inner market. Border controls inside the EU
have inflated sharply, resulting in delays
in provides however conjointly cancelling of orders, therefore exacerbating the economic
impact. Several firms within the T&C sector work beneath robust world pressure,
with restricted absorption capability for such a crisis, and this survey shows that measures got
to be taken right away. EURATEX already asked the EU Commission to foresee commercial
enterprise and money relieve, guarantee a coherent approach across EU Member States and
avoid limitations to the free movement of products and of the manpower.

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Corona iVirus i(COV19) iimpact ion iApparel iIndustry iin iBangladesh
(Name: Md. Anwar Hossain Khandakar, ID: 201000706)
Bangladesh iApparel iIndustry iconsists iof iclothing, itextile iand iready-made igarments
iAccumulated ifor i77% imerchandise iexport. iWe ican isee ithe iglobal iapparel iexport imarket
ishare itop icountry iare: i

Year
Country 2015 2016 2017 2018
China i 39.3 36.4 34.9 31.3
Bangladesh 5.9 6.4 6.5 6.4
Vietnam 4.8 5.5 5.9 6.2
India 4.1 4 4.1 3.3
turkey 3.4 3.4 33 3.1
From ithe iabove idata, iBangladesh ilost ia imarket ishare iof ipercent iin ithe iglobal imarket
i(6.5-6.4) i=.01 ipercentage ito iwhen iit’s iclosest icompetitor iVietnam igains i6.4 i% inewer
ishares iof iits imarket iin i2018. i
However, iin ithe i2018-19 ifiscal iyear, iexport iearnings ifrom ithe iclothing isector iposted ian
i11.49% igrowth ito i$34.13 ibillion ifrom i$30.61 ibillion iin ithe iprevious ifiscal. i
We ihave ialready iseen ithat iCOVID-19 ispread iglobally iChina, iItaly, ithe iUSA, iSpain
iinfected ithousands iof ipeople iare ino imore. iNow iit iattack ion iBangladesh, ifor ithat ireason
iour igovernment ilock idown ithe icountry iso ithat iit iwill ireduce icommunity imovement. i
iThe isituation iwith iregard ito iCOVID-19 ihas ibecome imuch iworse. iI iwill ioutline ihere ia
ifew iways iin iwhich iRMG imanufacturers i(Apparel iindustry) iin iBangladesh iare ibeing
iimpacted.
 Decrease iin iour iexport iGDP: iByers iorder icannot iclearing iand iforwarding idue ito
ilock idown ifor icoronavirus. iBangladesh iexport isector, ithe iRMG, iposted inegative
igrowth iover ithe ifirst ieight imonths iof iFY i2020 i(-5.5 ipercent) icompared ito ithe
icorresponding iperiod iof ithe iprevious iyear. iADP ipredicts ithat iBangladesh ilost i$3
iGDP i(1.10 ipercent idecline).
 iDecrees iin iour iImport: i50% iof itextile igoods iand i40% iof icapital imachinery iare
iimported ifrom ichina idue ivirus iit iwill ishortfall iour idomestic imarket. iGrowth iin
iimport ipayments ihas ialso ibeen iin ithe inegative iterrain i(-2.2 ipercent igrowth iin ithe
ifirst iseven imonths iof iFY i2020).
 The iDecrease iin iour iRemittance: iAbove10.0 imillion iworkers ioverseas, iwith ia
imajority iin ithe iMiddle iEast iand ithe iUS, iUK, iand iMalaysia iin ithe iworld
imaximum icountry ilockdown iso ithat islowdown itransaction imoney iand ilabor.
 Impact ion ithe iprivate isector: idue ito iCOVID-19 iFinancial iintuition, isuper ishop,
ian ionline ishop iis iclose idown iso ithat itransactions iare iclose iit iwill idefinitely
iimpact ion ithe ieconomy. i

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  iImpact ion iSupply ichain: iDue ito ithe iCOVID-19 isupply iof isuch imaterials ibeing
isqueezed iglobally, iprices iwill ihigher iin ithe idomestic imarket iBangladesh idue ishort
iof iraw imaterial. iDisruptions iin ithe isupply ichain ileading ito ia ifinancial iloss iworth
iBDT i14-15 ibillion ifor ithe igarments iaccessories.
 Unemployment iwill iincrease: i40% iof iindustry iworkers iare iinvolved iin ithis
iindustry. iAs ia iresult ithe isalaries iof itheir iemployees, ibusiness irates iand iinsurance,
iwhereas ithere iis ino iturnover iThe isituation igives irise ito ithe ireal irisk ithat, iin iorder
ito ireduce iimmediate icosts, imanufacturers imay istart iby ireducing ithe inumber iof
iworkers ithey iemploy.
 Reduction iSME iBusiness: iDue ito iCOVID i-19 iVirus iMany iof iour ibuyers ifacing
ichallenges iand iasked ito ithe isupplier iasking iif ipayment ifor iproducts ican ibe
idelayed iby iup ito i30 idays iand iwill iprove iparticularly iproblem ifor iSMEs iwith
ilimited icash ireserves iand ipoor icash iflow igenerally. i
 Reduce iProduction: iMost ifactories iare itrying ito icope iwith ithis isituation ithe ibest
ibut iour igovernment ilockdown ipeople iso ithat iproduction ishortfalls iand iruns ithe
irisk iof ihaving ito isuspend iproduction.
 Reduce iRetail isales: iConsumers iare iremaining iat ihome, iin imany icases iunder ithe
iinstructions iof itheir ination's igovernment iwhich, iin iturn, iis ihaving ia idramatic
iimpact ion ithe iretail isales iof ibrands istore iand ialready isales ireduce ion ithe iApparel
iindustry.
 Mass iimpact ion iworking iEnvironment: iCOVID-19 irepresents iand iunderstand ithat
iit iis ia ihuman itragedy iforemost ifirst ibecause iit ispread ilike inucleus ione ito imass
ipeople.NO ione ican isay iwho iis ithe icarrier ithe iso ithat iit ican imass iimpact ion ithe
ienvironment.

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 Name: Nayan Kumar Das
ID: 201006506

Threats of Corona Virus on Apparel Industry:

 Bangladesh: Bangladesh highly depends on the China for the RMG textile and textile
related accessories. Over
40% textile related products and textiles come from China which mostly support the exports
demand. They provide us with the heavy garments machineries and equipment which covers nearly
to 30%. Bangladesh’s garments sector has already been lacking for raw materials. Besides, price
of these materials have been increased which affecting the manufacturing cost. If this epidemic
continues, it will be a nightmare for our RMG industry. Bangladesh has no alternative to China, if
it continues not only RMG it will affect maximum of our industries.
The second most raw materials supplier for Bangladesh is India. India Supplies textiles and other
related raw materials of garments which is nearly 14%. Because of global lockdown all types of
import are now closed. As a result, raw materials are now becoming scarcity. Coronavirus
epidemic is creating a global supply chain imbalance for manufacturers.

Bangladesh's readymade garments division makes around 80% of the nation's manufacturing
income and around 4 million workers rely upon it. Despite the fact that the quantity of COVID-19
cases isn't excessively high in the South Asian countries, the pandemic represents an incredible
hazard to this economic sector and the livelihood of clothing labourers. This country’s RMG
division relies enormously upon export orders, which have dramatically diminished because of the
rise of the Novel Coronavirus cases worldwide, including Europe and the US. Until now,
Bangladesh has lost around 3.08 billion US dollar, which is affecting over 2.21 million workers
livelihood. Outside brands are progressively postponing and cancelling orders which is impacting
on garments industries very badly and garments companies are facing loss for this reason. Because
of increasing of COVID-19 cases in Europe and the US, Bangladeshi factories are losing around
$100 million every day. Various news media and associate personnel confirmed that Bangladeshi
garments have already lost export orders until June. Now, it is a matter of time, the companies to
be bankrupted. If, this continues many factories will be shut down and majority of the workers will
lose their job. Cancellations of orders are not just impacting the RMG site, it is also bringing a
devastating consequence for the RMG linkage small and medium industries, who depends on the
orders of International buyers to the garments. Our RMG depended economy is going to face a
great down fall impacting GDP and foreign currency. Bangladesh remittance has dropped to
$1638.53 Million from 1691.68 in December, which is the effect of RMG export decrease.

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 Remittance of Bangladesh
2000
1800
1600
1400
1200
1000
800
600
400
200
1,434.05 1,748.16 1,368.02 1,597.69 1,444.75 1,476.91 1,641.67 1,555.23 1,691.68 1,638.53
0
Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20

 Global: The main market for the every exporting country is US and Europe. But the matter
of great regret that Europe and America is now fighting against the corona virus for the last few
months. For which they are forced to lockdown their transportation and daily life activities which
involves closure of the malls, markets, and supermarket. As a result, EU and US brand giants are
failed to clear their existing stock which leads them to suspensions or cancellations of existing
orders. Many manufacturing companies and their following related small and medium industries
now facing serious problem to cover their materials bills and worker wages. Countries like India,
China and Bangladesh will be facing unemployment problem. Global economy is now at stand
still. Against this quickly evolving situation, experts have been attempting to turn out how the
spread of the coronavirus is probably going to affect brands, merchants and buyers. China is a
developing business sector for universal brands and retailers, yet the shutdown of urban
communities and transportation frameworks as the coronavirus spreads is probably going to
negatively affect deals, investigators state. The coronavirus will probably have the biggest negative
effect on merchandise and ventures segments inside and outside of China that depend on Chinese
buyers and delegate items. The effect on disconnected retail deals is probably going to be cradled
by the quick move to online deals in China over the previous decade.
China is one of the world’s largest raw materials and electronics and RMG machineries suppliers.
Because of this epidemic, all types of trades across the world except medical equipment are now
at halt. Global supply chain is in a great imbalanced situation which is causing manufacturing
process more insecure and intermittent. Import depended countries on China like Bangladesh and
India are facing shortage and price hike of raw materials making a great barrier for their own
economic growth. Threats of coronavirus on apparel industry are now definite and it cannot be
recovered until this epidemic gets normal.

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Recommendations
(All Members)
Corona Virus has not only impacted the apparel industry, but all other industries across the globe.
The role of supply chain managers is crucial in the current situation. The spread of the virus was
from China, and it spread globally because most of the apparel industry depends on China (as
stated earlier). The manufacturers of apparel industry might look for better sources around the
globe. They might also go for local sourcing instead of international. If the center of attention can
be shifted from one single country, such kind of incidents will not occur later on. It will provide
safety for the global supply chain.

This is a wakeup call since the world had previously been affected by Influenza “The deadliest
virus” in history. All the institutions in the world should prepare themselves for anything in the
future like such viruses. The global supply chain should align together to combat the virus.

Since most of the countries are in lockdown, the operations are paused in those countries causing
them a huge fortune. The smaller companies will be the highest affected, and some might declare
bankruptcy. The developed countries should invest in healthcare currently, to cease the pandemic.
Apparel tycoons like H&M, Inditex, Dior, Nike, etc. can contribute by making PPE’s and Facial
Masks according to WHO standards. The International Apparel Federation could hold a number
of conferences to analyze the losses and recovery options available.

The World Trade Organization can help fund the underdeveloped countries, otherwise the large
scale of Apparel manufacturers will cease to exist. It will ultimately cause a recession in the Global
Apparel Industry.

Just like the US, other developed countries should also support their countries trading backbone
financially. And, according to the humanitarian supply chain policies, a company can provide
employee benefits instead of raising the unemployment figures, only if it's possible.

Automation, even though it’s expensive, can avoid anything compared to humans. With all the
new upcoming technologies, labor demand is decreasing day-by-day. If the world was completely
automated, the workflow of the companies would never stop. However, it is not possible to reach
that milestone so soon. Companies can gradually upgrade to newer methods of production with
artificial intelligence softwares & machines. Apparel 4.0 is just one such technology.

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Conclusion:
(All Members)

Covid-19 epidemic is causing a great disturbance to human life, lifestyle and world economy.
World trade and economic activities are stopped due to lockdown, which is affecting
manufacturing industries like apparel. Due to lockdown, European and USA markets are closed
and there exists no demand for such products at all. As a result importers of EU and USA are
cancelling orders, which affecting the manufacturers like China, Bangladesh, and India. Renowned
brand are losing their commitment, manufacturers hang up with due payment. Apparel Industries
is the major sector of exporting and source of remittance for Bangladesh. Because of transportation
lockdown, importers are facing complexity in bringing raw materials of production. Production
severely hampered because of materials crisis. Now, it is losing millions of dollars every day and
making workers jobless related to it. Domestic manufacturers are not able to pay wages properly
for the ongoing disaster. Bangladeshi industries like apparel are now suffering so much.
Even though the corona virus doesn't discriminate between leaders and defenders of the markets
but in this situation the market leaders who are technologically advanced are now going to get an
advantage in rebooting their operations smoothly. Since most of them have already adapted to
smart technologies, they might be willing to dig deeper and go for complete automation. It might
not be cost friendly but such kind of crisis can easily be dealt with. However, the human race might
drown under the shower of unemployment.

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