The huge changes we are seeing in the global apparel industry right now are bewildering and unsettling for many of us. A tsunami has swept through the Bangladesh apparel sector and it is hard to believe that things will ever be quite the same again in our industry. Perhaps I am wrong, although whatever happens, the scars from the pandemic and the damage it has inflicted on our business community will be long-lasting.
Moreover, the pandemic is far from over. Across Europe, our main export market, countries are still opening and closing, locking down one week, opening up the next. Spikes in coronavirus cases have got governments everywhere running scared, while consumers are staying at home, worried about heading to the high street for fear of catching the deadly disease.
This all impacts us as manufacturers. It would be remiss of me to even attempt to estimate what Bangladesh RMG exports will be over the next few months and how much of a fall-off we may see over a 12-month period. Every business in our industry is struggling right now and double-digit falls in production are inevitable.
All that said, history tells us that from crisis, comes opportunities—it is just a matter of who is ready to take them.
One thing I think we will see more of in the coming months and years is the growth of grassroots success stories. It used to be that if you wanted to have influence, you needed size and scale, and the apparel and textile industry is a classic example of that. Size has traditionally mattered.
Moving forwards, I sense this picture may change. One of the problems with being a large business is that it is difficult to respond quickly to sharp economic shocks, the likes of which we are experiencing at the moment. Few would want to be steering the ship of a global retailer right now. Beyond the largest companies of all, the fact is that ALL companies are vulnerable, and I include the apparel industry in that. Many will go to the wall in the next 12-months simply because their overheads are so high, and they cannot afford to continue incurring losses of major markets going on lockdown.
As the market changes, as powerful market dynamics sweep through the industry, this will create opportunities for small, nimble players. That's why I talk about grassroots organisations—businesses that can get up close and personal with their customers and take advantage of the uncertainty in the marketplace.
Social media marketing makes it relatively easy right now to spread the word about a small business and quickly to create a brand and win a loyal following.
In the apparel industry this could bring serious opportunities. There has been talk for years of apparel manufacturers selling directly to end consumers. This has never really taken off in the way it should have as manufacturers have found it easier to deal directly with brands, where they don't have to worry about issues such as marketing, PR, dealing with end consumers and so on.
I think now is the time that a business model of apparel manufacturer selling directly to end consumers could take off. Such a model could start small but think big. A couple of years ago, when the market was stable and conservative with small quantity, I would not have seen such a model gaining much traction. Ironically, at a time when there is so much uncertainty around, I believe this type of model has the greatest chance of working. Let us be honest—many of our manufacturers have very little to lose at the present time; at the very least, they could be exploring such an approach.
I don't see this pandemic going away soon and the worst thing that any business could do would be to sit and wait for it to pass over, hoping it will be business as usual in 2021.
History tells us that many of the most successful businesses were formed during the darkest days of recessionary periods. While some business owners sit licking their wounds, mourning for the good old days, the movers and shakers of this world are looking for the next big opportunity. That's not to be flippant and make light of our current woes, rather, to point out that there are opportunities out there, new ideas are gaining traction and the world is changing before our very eyes.
I believe that being small and starting from not very much at all need not count against you in this brave new world. In fact it might be an advantage, providing the fleetness of foot required to go out and seize the day in this most strange and challenging of economic environments.
Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the Founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).