The full report is available HERE. Key findings:
1. The garment industry in the Asia-Pacific region is particularly vulnerable to the adverse impact of COVID-19 because of the size of the industry present and the high stakes involved. Notably, garment workers (over 60 million in total, including 35 million women) accounted for 21.1% of the manufacturing employment in the region as of 2019. Over 60% of the world’s apparel exports currently come from the Asia-Pacific region.
2. The cumulative impacts of COVID-19 on garment supply chains have been both far-reaching and complex: 1) As of September 9, 2020, more than 31 million garment workers in the Asia Pacific region were still affected by factory closure (i.e., mandatory closures of non-essential workplaces). 2) The drop in consumer demand and the decline in retail sales in the primary apparel consumption markets across the world have affected garment workers in the Asia-Pacific region negatively. As of September 9, 2020, 49% of all jobs in the Asia-Pacific garment supply chains (29 million) were dependent on demand for garments from consumers living in countries with the most stringent lockdown measures in place. Another 31 million jobs (51%) depended on consumer demand that is based in countries with a medium level of lockdown measures in place. 3) COVID-19 has further caused supply chain disruptions and prevented imported inputs into garment production from arriving in time. The heavy reliance on textile raw material supply from China makes many apparel producing countries in South-East Asian countries highly vulnerable to shortages of inputs.
3. The world apparel trade has fallen in the first half of 2020 sharply. This includes a 26% YoY drop in the US, a 25% drop in the EU, and a 17% drop in Japan. However, the timing and magnitude of these import declines vary significantly — China’s exports started to drop first at the beginning of the year,2020. Then, the exports from Vietnam, Bangladesh, Indonesia, and India began to decrease also since February (a joint effect of the shortage of raw material + decreased import demand). Data further shows that the drop in world apparel trade has been more significant than other products in the first half of 2020.
4. Apparel suppliers in the Asia Pacific region have been struggling with order cancellations AND longer payment terms insisted on by Western fashion brands and retailers. Garment factories say that they don’t have the leverage to ‘push back’ against these changes to contract terms and buyer policies.
5. Thousands of garment factories in the Asia-Pacific region closed at least temporarily because of COVID-19, some of them indefinitely. For example, In Cambodia, approximately 15-25% of factories had no orders at the end of the June 2020. Likewise, around 60% of garment factories in Bangladesh reported closing for more than 3 weeks. Related, layoffs have been widespread. For example, according to Indonesia’s Ministry of Industry, approximately 30% of their apparel and footwear workforce had been laid-off by July 2020 (812,254 in total). In Cambodia, approximately 15% of their garment workers (more than 150,000 workers) were reported to have lost their jobs during the pandemic. Further, garment factories have been operating at reduced capacity during the pandemic. For example, in Bangladesh, as of July 2020, the proportion of workers returning to work after re-opening was only 57% of the pre-pandemic level. Similarly, in Vietnam, as of July 2020, the proportion of workers returning to work after re-opening was also just around 50% of the pre-pandemic level.
Related reading:
- International Textile Manufacturers Federation (ITMF) 5th Covid impact survey (September 2020)
- World trade by sector (including textiles and clothing) in Q2 2020 (World Trade Organization)
- USFIA 2020 Fashion Industry Benchmarking Study (US fashion brands and retailers’ response to the COVID as of July 2020)
- What next for Asian garment production after COVID-19? The perspectives of industry stakeholders (ILO, September 2020)
FASH455 Global Apparel & Textile Trade and Sourcing 
While not very surprising, it is very unfortunate for me to see that the garment industry is struggling so much. The amount of lay offs in the Asian Pacific region is upsetting because the industry makes up such a large part of the economy there and is the source of income for many citizens. The fact that only 57% of garment industry workers are back to work in Bangladesh is also disheartening. I am hopeful that as the world continues to recover and reopen, the garment industry will recover as well and more Asian Pacific people will be back to work.
A big problem that I have noticed personally and from reading different articles is that since these retail companies and consumers are geographically far away from the places their clothing is made, they do not see first hand how their actions are affecting others. This is causing a lot of problems because retailers are not taking responsibility for the payments they owe which is causing a lot of workers to lose jobs and factories to go out of business. I wonder what would happen if retailers really paid attention and realized how big of an impact they are having on foreign markets and factories where they get their clothes from. I also think the effects of Covid are going to be very long lasting. As mentioned in the key notes, consumers have not been shopping as much since lock-downs in their countries were delayed compared to countries like China. Even though China has been able to get back on its feet sooner than countries like the U.S., it still has huge impacts on both countries. I wonder how things would have been different if globalization was not as prevalent in the fashion industry. I am curious to see what happens moving forward, even after the pandemic comes to an end. I think the effects will still be felt around the world.
I noticed the same trend of many companies being far away geographically from the country they source from. To me, it seems like many companies are using the “out of sight, out of mind” logic so, like you said, since they can’t see these effects, it’s not on their priority list. In addition, many companies are suffering as well from the effects of COVID-19 so I would assume that many of these companies are just trying to keep their own heads above water making it harder to worry about the other parties they’re affecting. I still think this is an unacceptable and unethical business practice because I feel like if these companies are going to outsource their production, they need to take responsibility for the work done and pay the workers. I can’t help but wonder what would happen if U.S. companies weren’t paying U.S. factories for the work done. It seems to me that if fashion brands were producing their products domestically, or even within a FTA region, this would be a much bigger issue and the companies would have higher consequences for not paying the factories. COVID-19 has raised a lot of questions about the ethics and sustainability of globalization. Like you said, I’m also very curious to see what will happen with these brands moving forward once the pandemic is more under-control or over.
It is sad and challenging to see how the garment industry is struggling, right now more than ever. With Western fashion brands and retailers, I feel as if they do not 100% know or understand exactly what goes into play in order for their products to be sourced and manufactured. They do not see first hand the experience that the workers and factory owners are going through. If they want to source their products from other countries outside of their regions, then they should also uphold their side of the agreement or deal and pay the workers, who are ultimately their workers too, for the products that they made for them no matter if they choose to cancel an order or not. US fashion brands and retailers in specific should educate themselves more on their own sourcing practices as well as the sourcing practices from where they are sourcing from and not decide on anything if their intention is to not pay or cancel orders.
I agree with you, it’s very upsetting to see the industry we love so much struggle right now. Seeing factory workers and owners first hand would definitely open peoples eyes up to the travesty that’s occurring. I agree 100% with the statement you made about upholding their side of the agreements to pay workers who didn’t have a choice in the cancelation of orders. It’s so frustrating to watch people not get paid for something that’s out of their control and I hope this all gets resolved soon!
It is inherently concerning that retailers have either canceled sourcing orders or failed to pay their overseas manufacturers for the materials that they have already purchased to start producing their garments. I saw this firsthand when I worked at a small boutique this summer. The COVID-19 pandemic has hurt the apparel industry in Asia to a great extent, as these companies are left facing the financial burdens that US retailers and other large-scale fashion brands have placed onto them. US retailers should be held accountable for refusing to pay their overseas manufacturers, as it is selfish and unruly. Understandably, this is a concerning time, but it does not mean that it is only concerning for those retailers. Asian manufacturing companies are facing serious financial struggles, and it is important for there to be a compromise. Instead of failing to pay, I think an agreement should be made that the manufacturers could discount the price of the garments to the retailers, making it so that they still will want to buy and sell their product (even on sale so customers want to buy) and overall diminish the need for them to not pay at all. US retailers should place themselves into the shoes of overseas factories and educate themselves on the real effects they are causing rather than refusing to pay.
I agree that is is not surprising that these effects are taking place amid the COVID-19 Pandemic, however it is devastating to see. It further shows that developed countries are using developing countries as a means to an end. Although many brands and retailers are claiming to obtain corporate social responsibility, many of their decisions do not keep suppliers at the center of their decision making. For example, many Western and European brands and retailers have refused to pay suppliers for garments that were already produced or in production when the outbreak started. As restrictions lightened, still so many people were affected. Fortunately, brands and retailers are aiming to adjust their sourcing strategies in the near future, however the need to support the lives of garment workers are increasingly important in present times. I believe brands and retailers should show more support and appreciation to their suppliers because at the end of the day, they are who make an idea come to life for the company. Knowing that their living situations are much more difficult, brands and retailers should do everything in their power to send aid to their suppliers and work with them to prevent any supply chain disruptions in the future. This is a wake up call for brands and retailers to own up to their responsibilities as a company and help to improve the human lives embedded in their supply chain.
I think it is so important that you mentioned how vastly different the living conditions are in the apparel manufacturing countries vs the countries that the companies are based in. Just because some Western apparel companies are struggling due to the pandemic, their workers are still able to go home to a solid roof over their heads, livable wage, and disposable income. That is a luxury that these production countries do not have.
With many countries entering new waves of the pandemic, I forsee these trends of order cancellation and decreasing demand to persist. Especially since the U.S. has an incoming shift in political power, which will alter the way the country will enfore COVID-19 restrictions, I think that longer payment terms, order cancellation, and other means of extending contractually-bound relationships will increase. Clearly, garment workers and factories in Asia received the adverse effects of Western companies actions during the first wave. Outsourcing has a lot of ethical and socially responsible detriments, and companies should only outsource their work if they can support all of their workers. Although factories operating at reduced capacity is a way of protecting garment workers health and safety, like Bangladesh only having factories at 57% capacity, these strides are not enough for garment workers wellbeing. Job insecurity during the pandemic hits underdeveloped nations harder, especially when those nations are so reliant on the garment industry for employment. In class, we discussed how globalized trade is shrinking due to the pandemic and regional supply chains are successfully keeping things running in the garment industry. Asian countries have one of the more efficient regional supply chains, so I hope that this helps these factories stay afloat during the continuing pandemic.
It’s sad to be associated with an industry that continually takes such a selfish approach when looking at these situations. Like one of my classmates said, there’s an “out of sight, out of mind” approach in which the western hemisphere, being that if the west doesn’t see it first hand or have it affect them first hand, they don’t really care. Developed countries are completely exhausting developing countries and just because a western brand is struggling from the pandemic doesn’t mean they don’t have to pay their bills, which in turn will affect the workers, which then affects their economy. It’s time to wake up and think about the damage these western brands are causing and to take a step back and really realize the impact they in turn have on developing countries citizens and economies.
It is surprise for me that the order cancelling can cause such a huge impact for the suppliers in the Asia. The decrease of demand is a main reason that causes this situation. It is hard to say that the fashion brands and retailers are doing or handling this situation in a wrong way. Each side need to think about their own profit. However, in order to maintain the relationship with suppliers, brands and retailers do need to consider and think about the difficulties that are faced by their suppliers and the workers in other countries. Since the suppliers and workers are located in Asian countries, so it is hard for others to actually feeling and seeing their currently situation and experience under the affect of COVID-19. This pandemic is a difficulty that needs to be overcame by the world as a whole.
I found this topic important of discussion and reflections. The impacts of canceling orders in countries that are still developing can have a drastic impact compared to a country that is more advanced and further developed. There would be a bigger loss on their economy and people working when they cannot receive the pay checks that they depend on. I think the impact of the cancellations should have been thought about in a more ethical manner and the people should be put first. This can also ruin relationships with suppliers in the longer run when they do not get the payments which they deserved for fulfilling the orders prior to the cancellations.
The comment made in point number 4 really resonated with me. “Garment factories say they don’t have the leverage to push back against these changes to contract terms and buyer policies”. This is upsetting to me because it points out the struggles that the factories in these developing countries have been facing as a result of the covid-19 pandemic. Not only were many of their orders canceled from fashion retailers, but also many factories were forced to close. This is extremely detrimental to those factories and the economies of the developing countries because they do not have the means to pay in order to support themselves and prevent going out of business in the same way that many fashion retailer’s may be able to. It aggravates me that fashion retailer’s are able to bully these factories into doing exactly what they want. The pressure that the retailers put on the factories forcing the factories to compromise on things that they may not have the ability to do. However, since retailers are able to threaten to leave and go elsewhere, these factories panic and agree to things just to ensure that the retailers might want. This hurt many factories during the pandemic because they were fearful that their fashion retailers would leave and use other suppliers if they were not able to meet their demands. In the end, I believe it was the factories that suffered the most as a result of this pandemic because they suffered from order cancellations and covering the costs of production for items that were not sold. Overall, the covid-19 pandemic was very detrimental to the apparel and textile industry. However, I believe it had the greatest impact on garment factories and it is going to take a long time for them to be able to recover.
It is very sad to see the major impact Covid-19 has had on the factories in Asia. A large portion of their population relies on factories for jobs and the industry for their economy. Especially for these already struggling countries, it will be harder for them to rebuild their economy after this. Although the whole world has been effected by this pandemic, being in the U.S. we truly don’t really see or understand how damaging is actually is to other countries. The fact that the U.S. has played a part in order cancellations and lagged payments shows the disregard for the wellbeing of Asia. Hopefully when factories can open back up, they will have the opportunity to rebuild themselves and their relationships with other countries.
It is truly heartbreaking to see that a country like America with so much economic power doesn’t hold their domestic retailers accountable to ethical standards of paying all contracted international garment workers for their product and time. I understand the detriment this pandemic has put on US fashion retailers, but to put millions out of work from the region with the largest number of global apparel exports (over 60%) because you didn’t plan ahead and have enough OTB balance to pay them is truly the definition of unethical. These actions further prove America’s elitist attitude when it comes to trade and showcase that American retailers only participate in trade to boost their own economy and not to create a mutually beneficial agreement.
Olivia- I completely agree. Its been so sad to hear all of these stories on how factories, workers, and small businesses are grappling with the effects of the pandemic, but its even more sad that these multi-million dollar companies aren’t holding up their end of contractural agreements. When I hear that thousands of garment factories in the Asia-Pacific region have closed, and some of them indefinitely, I think about all of the millions of factory workers who aren’t being paid and directly rely on their already-below living wages. I think what you said about America’s elitist demeanor is spot on, and while I hope the new Biden administration will help ground the US in a global setting, I think the pandemic has really shown the true, and ugly colors of the American fashion industry.
It is so sad to see that some factories in other countries have closed indefinitely because of the Coronavirus. One statistic that blew me away from the points was that in Indonesia, 30% of their footwear and apparel workforce has been let go. That will extremely impact the country for an unforeseeable amount of time in the future. It is unfortunate that the U.S. as a country and the world as a whole could not figure out a better way to keep companies in business and keep jobs for millions and millions of people. Especially in Asia, the garment industry is huge and now will take many months and possibly years to go back to normal. Only 49% of all jobs in the garment industry in Asia rely on imports to countries with a strict quarantine policy. This has greatly halted production.
It’s not suprising that obviously COVID has negatively effected the industry. I can understand how businesses are going out of business and it is hard to keep up with orders. What I don’t understand however is how these brands can just cancel on the production they had already made. They obviously need to plan ahead and start producing early but I feel it is very unfair that these producers and now stuck with inventory that brands had made already. I feel it is the brands duty to buy back what they had made. Other than production problems COVID has caused a lot more problems in the apparel industry and I am really curious to see what might happen if a second wave comes.
It is really tough to read and see with my own eyes how the industry is changing due to COVID. With Asia relying on factories for mass production, it’s severely hurting their economy with factory shutdowns and sourcing issues. It has also left hundreds without jobs and any form of income. The United States unfortunately handled this situation very poorly, by not being as prepared as they should have been when the virus hit. We as a country and industry hold so much power, but continue to misuse it. It is only going to hurt our relationships with other countries if this continues. By cancelling orders with allies, it breaks trust and professionalism. It is going to be much harder for countries like Asia to rebuild and get back where they need to be after this pandemic. Since the US isn’t seeing these problems with their own eyes, I don’t think it is affecting them as much as it should. At the end of the day the factories are getting hit the hardest in this situation and I wonder if it will ever be the same after COVID dissipates.
Although it is not surprising to see that corona virus is still impacting the factories in Asia and the Pacific, it is surprising that western brands are cancelling orders and demanding later payment. So many garment workers are negatively affected by these cancellations when some workers do not even make a fair wage. I believe that these brands need to be held accountable for the work completed in these factories. I am curious to see just how many garments and textiles were abandoned by brands because of the pandemic. I hope that sustainable and smaller brands are able to purchase these abandoned garments so that they do not end up in a landfill. With COVID-19 numbers rising again in the US, I cannot help but wonder what will happen with the “second wave”. I hope that western fashion brands avoid this situation again and that US consumers will continue to shop for the holidays to boost our economy.
Unfortunately, I am not very surprised that so many garment factories in the Asia-Pacific region have closed or that the world apparel trade has fallen due to COVID-19. A large majority of, if not all, apparel products are made from materials from all over the world and usually assembled in Asia. With a global pandemic going on, trade and travel have become concerning and inconvenient with lengthy shipping times for products. Additionally, I learned in one of our class readings that many large apparel companies/brands have decided to cancel orders that they sourced from factories in the Asia-Pacific region or chose to not pay for the products that were already manufactured. COVID-19 has drastically affected the apparel industry supply chain and, bottom line, the economy. The issue here is that these large companies are trying to make decisions that will help them financially but in return, these companies have essentially messed up the business/finances of the factories they source from. In my opinion, these large fashion companies have tainted their reputation and may now lose a sourcing relationship which could backfire when things begin to normalize. It was also a very bad business move to back out of a deal or agreement that was made prior to the pandemic.
It is not surprising to me that COVID-19 is impacting factories in Asia and the Pacific because Coronavirus has been a huge crisis for the garment industry as a whole. Even if factories have not closed they still have to work at reduced capacity to stop the spread of the virus which means many people have lost their jobs which is devastating. Millions in Asia have their jobs which effects their livelihood. This is why I feel this is a very important subject due to the pandemic, especially since this is being faced all over the world since the world apparel trade has plummeted in 2020. Asia and the Pacific are being hit this hard because in this region garment workers account for over 20% of manufacturing employment. What isn’t helping is the western-hemisphere fashion companies pulling out of contracts due to the pandemic and leaving manufacturers in Asia and the Pacific in economic trouble. I think fashion brands and retailers have a social responsibility to pay for their existing orders and honor contracts if they are financially able to do so.
Reading through this was painful. Although I think that Western countries are very dependent on the third-country, labor-intensive environments, but as much of the things that we hear about their working conditions and their unlivable wages, they are very dependent on businesses to keep them afloat. So when COVID-19 halted everything for them, all of a sudden they were out of work. Atleast with the Western countries, they have government subsidies and help that they can get to keep themselves afloat, but from what I have learned, a lot of these factories don’t have that luxury. Even as restrictions lightened, not everyone went back to work, and not everyone got work. As a student reading this, I always think that capital-intensive countries always get the better end of the stick, even in sticky situations.
Reading this article was disheartening to say the least. The Asian Pacific region is specifically responsible for a large portion of the trade and apparel industry. As a result of the pandemic, the apparel industry has taken a huge blow. China’s textile industry experienced billions of dollars in deficit from the start of the virus outbreak in February. As more Asian officials come forward stating that buyers have not been upholding their ends of trade agreements, adding additional stress to the COVID-related shortages, tensions rise even further. Asian countries are experiencing huge economic downturn, the apparel industry is largely responsible for asian economies’ income, this deficit has proven to be quite crippling. It is crucial that US fashion retailers adequately compensate their suppliers and complete any and all existing payment contracts so that we can continue to have stakeholders in these Asian countries that singly fuel our textile and apparel industry. Fashion brands and retailers need to stay true to their trade agreements and follow through on payments so that Asia can continue to facilitate the textile and apparel industry supply chain. We need to work on helping those experiencing shortages/deficits so that we can balance out the supply chain and regain balance within global economies.
Like many of you, I find the impact the pandemic has had on manufacturers in Asia to be extremely disturbing. Although I do understand that the pandemic was completely uncontrollable, the way in which fashion brands have been handling it has been disturbing, to say the least. As we have learned in class, garment workers who depend on these brands to sustain themselves are completely crushed by these losses. The majority of these developing countries’ economies rely almost entirely on these large brands. Every day they put themselves at risk in (most likely) poor conditions where their lives are at risk, yet they get barely anything in return. Although I understand that they are a developing country, there has to be a better way to do things, especially in 2020. This reminds me of when the Kendall and Kylie brand had been called out for not fulfilling orders in Bangladesh. Being a billionaire without a single care in the world financially, you would think Kylie (and Kendall) would be more proactive. Not to mention, the pressure these brands place on producers to finish orders is immense, yet their eagerness to pay them for their work is nowhere to be found. At a certain point, government administration is needed to solve these problems, yet we haven’t seen that either.
I was very angered and concerned reading this as I see many of my classmates feel as well. In Asia right now many livelihoods are being jeopardized because of the coronavirus pandemic. This all seemed to begin back in February due to fabric supply shortages as the virus dramatically hit China’s textile sector. Many orders have been cancelled due to more than a million workers being fired in Bangladesh. Companies must make sure that they as best as possible work to minimize the harsh impacts on suppliers and accept goods that have already left the factories. Companies must at least try to deliver as many orders as commercially viable to keep these jobs for these hard workers in tact. This is irreversible damage we are looking at that could hurt the garment industry for years to come. It is important that companies take on a role of almost being human rights activists and think of the sake of the factory workers. It is important that fashion companies do not just think of their survival of a whole, but the people all the way at the bottom of the chain who are reaping the harsh results the most. Buyers need to take responsibility and cover production costs and already purchased raw materials before cancelling orders as this does not just not affect anyone. The people who made these raw materials aren’t getting the compensation they deserve! Instead, they are just getting laid off and sent home without pay- this is not livable! I believe it is absolutely the fashion brands’ responsibilities to continue to pay suppliers for work that is completed or in progress and accept orders that have already been shipped- it is only fair. Companies must show compassion and understanding during these difficult times and understand that everyone is trying to survive right now- we must work together better.
As I read the article, I thought about the ripple effects that the Xincrown outbreak might have on the Asian textile and apparel supply chain, which relies on China for its supply of fabrics, textile raw materials, and apparel accessories. The new Coronavirus (COVID-19) epidemic has put unprecedented pressure on the supply chain and retail side of the textile and apparel industry. In previous assignments, I have learned that as consumers have shifted their spending to necessities during the recession caused by the epidemic, the impact on the industry has been exacerbated by the fact that apparel is not an indispensable part of life. Many companies have gone bankrupt or announced mid-course withdrawals, all of which have dealt a blow to the apparel manufacturing industry.
I think that this topic is an extremely important one to be acknowledged, as the affects of COVID-19 have heavily impacted the T&A Industry all around the globe. I was very sad to read all of the negative impacts that the current pandemic has had on garment workers in Asia and the Pacific. When things started to get really bad here in the US back in March, I never would have imagined that things would get to the point where permanent damage would be done to the world T&A Industry. I feel as though it will take a very long time for things to recover, and unfortunately, garment workers in the Asia-Pacific region will continue to be negatively affected because of capacity reductions, layoffs, longer payment terms, and order cancellations that have come from Western fashion brands and retailers. Though it is understandable that amidst a pandemic, consumers are less likely to spend money on clothing or luxury goods because of undetermined financial stability, I think it is important to consider the people who are suffering overseas. I think it especially important for western fashion brands and retailers to consider garment workers that are affected by their actions, such as order cancellations and longer payment terms.
This was a very interesting report and I like how it was described as a ripple effect. Covid has impacted our world dramatically and things in our world have had to change because of it. We did see that the garment industry in the Asia-Pacific region was hurt. Consumers were no longer buying as many products, so countries were not producing as much or cancelling orders all together. This then hurt the workers in these factories. Countries like the US also were wanting to have production move closer to home to avoid production delays due to shipping and worsening covid conditions in other countries. Covid has changed the apparel industry and hurt it so much and it will most likely take years to recover and adapt to our new normal.