One of the biggest questions in the Indian apparel export industry at present is – how is the current order situation? And despite the availability of orders currently, what are the overall changes in these unprecedented times? Exporters involved with various products across different hubs have different opinions on this. To bring a clearer picture, Apparel Resources conducted a survey across the country and asked various questions to the apparel exporters in this regard.
The survey covered exporters from across the country, and exporters especially from apparel manufacturing hubs like Tirupur, Bangalore, Delhi-NCR, Jaipur, and Ludhiana responded. The scale of responding companies and their client base is also different; these companies cover prestigious brands, departmental stores, wholesalers, and importers.
The good thing is that 25 per cent of exporters in this survey accepted that fresh orders have started coming, while 25 per cent respondents said that orders are available but those are not fresh. 30 per cent of the companies shared that despite the availability of orders, they are very less in numbers.
On the other side, 20 per cent exporters believed that there have only been discussions so far, and no order booking has taken place.
Some exporters also shared that whatever orders they have received or will receive in 2020, it will only be 60 per cent of the orders received last year.
It is also pertinent to mention here around 50 per cent of exporters believed that the currently available orders are not season specific. Truth be told, the industry is receiving almost the same number of orders for both Autumn/Winter ‘21 and Spring/Summer ’21.
Looking forward, it will be interesting to see how order booking will grow in the next 2 months. Based on discussions with the buyers and keeping the overall observations in mind, 50 per cent of the respondents said that as far as order booking in the next 2 months is concerned, they are hopeful, yet aren’t very sure. On the other hand, 30 per cent exporters underlined that they are certain they will have more orders in the next 2 months. However, 20 per cent of the respondents maintained they didn’t have any such indications.
Ravi Poddar, MD, Cheer Sagar, one of the most respected export houses of Jaipur, said that the situation about the overall business should be quite clear by November 2020.
Another interesting angle to add here is that the exporters are receiving orders from across the globe; even the EU and the US are placing orders from India. Apart from these two traditional markets, Indian exporters are also receiving orders mainly from Australia and Japan. 40 per cent exporters said that their orders are mostly coming from the EU, while 30 per cent are positive about the US market.
“While few companies like Otto Germany do not show much difference as compared to the pre-COVID-19 order volumes, a majority of buyers are lagging behind,” said an exporter working with 100 per cent EU-based buyers. He also added that there are no new developments. Some of the European buyers are forced to take holidays in August. Moreover, buyers are reluctant in placing new developments owing to the market conditions abroad.
As now the conditions have completely changed at all levels – be it consumption in the Western world or manufacturing destinations, it is natural that there must be some differences in new orders. These changes are, in fact, challenges for apparel manufacturers, as there are more styles now as compared to the overall order size which is less; 50 per cent of the respondents showed their consent with this perception. At the same time, timely delivery – which was already a huge challenge for India – is now going to be even stricter, as 24 exporters informed that now the lead time is even lesser. 25 per cent exporters shared that they have booked orders on reduced prices in the last few weeks.
“I’m facing various challenges, as styles are more and overall order size is less; orders are for very basic products (can’t have more margin in such products); price as well as lead time are also less now,” stressed Ankur, Blooming Apparels, Delhi.
Challenges have always been a part of the apparel export industry; in fact, these have grown with time, be it at the internal or external levels. Even today, 30 per cent exporters are facing labour shortage. At the same time, 90 per cent of the respondents agreed that due to social distancing and other factors, the cost of running a factory has now become very high.
“The price demand made for job workers for dyeing/printing of the fabrics, transportation, sewing, embroidery, etc. is much more now, and factories are forced to get goods made at a premium. We have recently shipped air cargo of over 1,500 kg at Rs. 400 per kg, whereas this used to be well under Rs. 110 per kg for Europe during the pre-pandemic phase,” informed Ashem Yadava, Ess & Bee International, Gurugram.
Ravi highlighted another issue, “The challenge we are facing is that apart from low orders, the supply line is also disturbed, as we are dependent on many areas and suppliers are all over India. Due to COVID-19, many areas are still under lockdown and they are not operating, and even if they are operating, it is at a much lower capacity.”
Looking forward, the markets are expected to pick up once we will be able to win the battle against coronavirus. It is widely perceived that ultimate solutions like an effective anti-COVID vaccine will gradually help the industry see a positive impact. However, not everyone in the industry thinks alike, as while 30 per cent exporters said that the market will indeed be up for a positive impact, as many as 70 per cent exporters felt it’s too early to assume anything.
All said and done, the world is completely unpredictable. The US elections are approaching in the next few months; bilateral relations are changing between various countries which have a strong impact on trade also. So, all in all, the Indian apparel industry must to be fully flexible and geared up to survive and grow. Let’s hope for the best.