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“China’s superiority may remain unchanged even after COVID-19”

Akira Kawashima, Senior Director, Japan Fashion Week Organization/Textile Division

Akira Kawashima Senior Director“Due to the turmoil caused by COVID-19, global apparel and textile industry has been greatly affected. In Japan, many people are forced to work from home and consequently not only individual workers (including freelancers) but also company employees are frightened of large-scale personnel-cuts. Incomes have reduced to 60 per cent of normal. Amid such a situation, people’s desire for ‘dressing’ is low. This tendency will continue for a while even after COVID-19 is over, which will lead to local small-mid-sized textile companies suffering from lack of funds, as they cannot wait for recovery, causing more bankruptcy and/or voluntary closures.” 

How will COVID- 19 impact Japan’s apparel & textile industry’s business in the mid to long term? What is the most critical aspect?

Due to the turmoil caused by COVID-19, global apparel and textile industry has been greatly affected. In Japan, many people are forced to work from home and consequently not only individual workers (including freelancers) but also company employees are frightened of large-scale personnel-cuts. Incomes have reduced to 60 per cent of normal. Amid such a situation, people’s desire for ‘dressing’ is low. This tendency will continue for a while even after COVID-19 is over, which will lead to local small-mid-sized textile companies suffering from lack of funds, as they cannot wait for recovery, causing more bankruptcy and/or voluntary closures. 

Obviously, industry may not get back to ‘business as usual’, what according to you will be the key changes and in what areas?

In Japan, textile industry is organized through division of labour. Therefore, once some parts/companies of the supply chain disappear, it will be difficult to produce fabrics under the same conditions like before. The textile regions will be greatly affected due to the closure of some small-mid-sized companies in the region. Definitely, the industry will not recover previous state of business. 

Emotional and economic backlash on China, how would that change global supply chains?

Due to the outbreak, the risk of China has become clear once again. However, since there are no other countries that possess big market with well-developed production infrastructures like them, it is most likely China’s superiority will remain unchanged even after COVID-19 ends. In terms of products such as uniforms, however, it seems certain that more production will shift to ASEAN countries instead of China via trading firms. 

What is the impact on upstream/downstream across the supply chain and on retail and above all what are the changes in consumer behavior?

Working ways of people will be reviewed; working style (work from/at home) will be normalized due to COVID-19, and there will be more tele-working/remote working even after the pandemic ends. Consequently, the occasion to go out will reduce and people will be less conscious of how they look, which will be a tremendous disadvantage for the fashion industry. Consumer activities will increasingly focus on online shopping, which will considerably diminish the need for real stores/shops. There will be clearer products uploaded on websites, which will be an unfavorable situation for Japanese fabrics whose specialty is ‘delicate and nuanced texture’ therefore, demand will fall. After COVID-19, people’s desire will mainly shift to travelling, sports with companions, eating out with friends/acquaintances etc, also equally important will be ‘how to spend a comfortable and pleasant life at home’. In that regard, an interior-field is promising probably some local textile makers/companies might shift from making fashion textile products to interior applications.

What is your advice, how should companies face the future?

In the beginning of 1990’s, the scale of Japanese apparel market was the largest, double the size of the US. It was partly due to the bubble economy, but it was clearly abnormal even in comparison with the US population. At that time, most Japanese apparel/textile companies with big domestic markets used to concentrate only on domestic competition, without aspiring for exports. Although domestic market has slowed down over the years, taking a long time view, the change after this COVID-19 will occur instantly and dramatically. Therefore, only companies that ride the wave with a positive attitude will survive, while the passive ones will not.

 

 
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