The rise of COVID-19 in the past few months in India is quite raging, spreading like a wildfire. This disease has put all the sectors of our economy on a halt. The number of patients is not expected to go down by far. As the cure of this pandemic is still unknown, this illness is slowly pulling the world economy towards the biggest economic recession of all time. The major loss is being faced by is the fashion and retail industry. According to Bain Consultancy, the fashion industry will lose around 35% of sales due to COVID-19.With major fashion events like London Fashion Week or even Met Gala has been postponed. The world isn’t going anywhere near normal. So to sustain the business, upcoming designer labels, people need to realize this is the new normal.
The one thing COVID has done is to persuade us to think out of the box strategies. Such strategies are now being implemented in the current fashion scenario. Many notable brands are now changing their pricing strategy to compensate for the losses incurred and also too ripe the benefit out of the current situation at the same time. Recently I was scrolling the pages of the internet where I stumbled on an article telling how luxury brands are deliberating increasing the prices of their products even in this global pandemic. This may sound wrong and unjustified but this might be quite profitable. Chanel has increased the prices of luxury goods mostly leather bags by 17% in April (mostly in China). Not to mention, out of total revenue on luxury goods, 35% comes from China. A typical Chanel monogrammed bag cost 1320$ in October which is now being sold at 1500$ i.e 14% increase in less than a year. Followed by Louis Vuitton changing its pricing twice in a single year, with a 3% increase in March and 5% in May. I believe it is due to corona the price of raw material varies. As the raw material comes from different countries so the cost of gold, leather, etc so varies. Second is the production cost, suppose an Italian brand has outsourced its production in Bangladesh and assembles in London so, with the involvement of 3 different currencies i.e. wages, government taxes, customs duty, etc the cost has now been increased. If I am not wrong, I guess once the lockdown gets over, people will be splurging on clothes and luxury items. It has been observed in China, people were found to be standing in long queues outside stores in order to shop. French fashion house Hermes reportedly saw 2.7$ million sales in a single day it reopened in April. Companies are expecting the same from other markets too. British Vogue noted that people are now spending around 450$ on nonessential items like pajama just to feel less anxious and free. With cash still flowing in for some employed people, it might be true that people will go haywire on shopping.
As for the Indian fashion industry, many local brands and international are canceling their future B2B orders in production and even in some cases not paying for the current orders. H&M, Adidas, Inditex (Zara), etc have recently made a commitment to pay in full for all the orders completed and in production. Primark has said that they gonna pay but they have not made a full commitment yet. The factory workers, artisan, and craftsmen are the people who have been impacted severely. With no work and no hope in the near future, these jobless people are having a hard time putting food on the table. The industry needs to support such workers rather than doing unethical practices to save revenue. Due to which the livelihood of these workers are hanging by thread. Many notable designers have agreed not to cut the wages of their artisan in order to keep their life a little less affected by the pandemic.
The export promotion council for handicrafts (EPCH) spring fair 2020. Considered to be the most profitable platform for the artisan where they can get overseas orders has also been canceled. EPCH has an estimated loss of Rs 8,000-10,000 crore to the sector and shutdowns of 60-80% of the production unit due to lockdown. As the spring-summer season approaches in March all the artisan’s stock starts piling up due to so many orders. But as the lockdown was implemented, they have been with no work and their saving is not enough to help them in this crisis. The government needs to step up; action or relief funds should be released towards artisan. It is a crucial part as this sector contributes up to 2.2% in India’s GDP.
Designers, labels are in crisis too, with literally 2 months of no sales, rent piling up. They have been in a lot of stress. But in this time there is nothing that comes out from panic or stress. Take it as an opportunity to work on your collection, support your team, think of ways to connect with your audience. Be active on your social media accounts, some designers are selling homemade mask to locals. Engage with your audience, start sharing a little sneak peek of your work than just COVID related content. French fashion house Balmain’s Creative Director Oliver Rousteing always shares his sketches, his team’s work from home, everything to boost the morale of his workers in this pandemic. He never said fashion, corona, or pandemic. Just a simple little personal message and work to keep his followers motivated. And that is how everyone should be during this time.
We are all in this together, we need to support each other to get us out from these difficult times. Recently Lakme Fashion Week announced virtual fashion week to showcase the latest designer’s collection. And Chanel introducing its latest design on Instagram. Nothing has stopped, just the channels of marketing are changing. Let’s hope the world understands the outcome of this recession and does not cut the paycheck of people of every sector. That how we deal with COVID.