Due to the global spread of the epidemic and widespread control measures, significant changes have taken place in the apparel industry, both on the production side and on the distribution and consumption sides. According to Euromonitor International’s forecast, global clothing and footwear sales will drop by 17% in 2020, becoming one of the industries most severely affected by the epidemic. The apparel industry is an industry with a high degree of international division of labor. The decline in terminal sales has triggered an increase in risks throughout the industry chain.
Production link
From a production perspective, Southeast Asia is an important production base for the global apparel industry. Affected by the epidemic, orders worth billions of dollars in the region have been canceled or suspended. According to Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association, new orders fell by about 45% compared with the same period last year. From March to June, 179 garment factories in Bangladesh closed; more than half of the $3.18 billion in canceled orders came from European countries. According to statistics from the Wall Street Journal, about 250 garment factories in Cambodia have closed. The Vietnam Textile and Apparel Association (VITAS) also stated that clothing and textile exports in the first four months fell by 6.6% year-on-year, and the total import value fell by 8.76%. Exports of textiles and ready-made garments fell by 6% to 22% in the first four months.
Distribution link
At the other end of the industry chain, brands and retailers generally face inventory backlogs, cash flow shortages, etc. Troubled by problems. PVH Group, the parent company of Calvin Klein, announced to streamline its North American business and close 162 retail stores; more than 60% of GAP stores have been closed, and sales of all offline stores under the brand fell by more than 50%; H&M sales fell by 46%, and 3,778 stores were closed. . In addition, many clothing brands are disappearing. In April this year, French footwear brand Andre declared bankruptcy. In May, French women’s clothing brand NAF NAF and well-known American clothing brands J.Crew and John Varvatos all filed for bankruptcy protection.
Consumption link
From consumption From an end point of view, in addition to hindering purchasing behavior, shopping patterns will also undergo major changes. According to a Euromonitor survey in various industries around the world in July 2020, 64% of respondents believe that online shopping will undergo permanent changes due to the impact of the epidemic. Smaller retailers and brands can now use tools like Facebook Shops to sell their products on Facebook and Instagram without any fees.
Underwriting data
From an insurance perspective, PICC’s possible loss cases in the textile industry have The amount increased significantly year-on-year.
Industry Trends
In order to adapt to the new supply and demand relationship, many companies have begun to adjust their business strategies. Online sales, digital production, digital warehousing, digital logistics and digital settlement will all become the key to corporate survival. In 2019, American designer brand Tommy Hilfiger announced that it would only use 3D design to create, develop and sell samples for its spring 2022 collection. In addition, immersive technologies such as virtual reality (VR), augmented reality (AR) and live broadcast technology are also used on a large scale. For example, British online fashion retailer ASOS uses AR technology to display simulated models and brands, and Italian luxury brand Gucci has also launched a new live streaming shopping service, Gucci Live. </p
