Cambodia’s exports from January 2022 to August 2022 were up 26 percent compared to the same period in 2021.

The total value of the country’s international trade rose by 21 percent. Imports increased by 18 percent during the period. Exports increased by 37 per cent.

The US is the biggest market for Cambodia’s products. Vietnam and China are the second and third markets. Garment, footwear, and travel goods have the country’s biggest share of total exports, but the non-garment product exports are on a significant increase.

New factories opening up are viewed as investors’ high confidence. Promulgated investment law and free trade pacts bilaterally and multilaterally are also factors that have opened the markets for Cambodia-made products as well as attracted new foreign direct investments.

But due to the signs of an impending recession in the US and Europe, demand and purchase orders have seen significant drops in the second half of 2022.A quarter of garment manufacturers in Cambodia are looking to partially suspend operations in September or may require their workers to work less hours. Operations in some 100 factories are suspended, affecting around 10,000 workers.The entire sector, consisting over 1,200 garment, travel goods and footwear manufacturers, employs about one million workers.

Bangladesh expects to get a ten per cent share of the global apparel market by 2030.

This hope is based on the potential of the markets in Europe, the UK and the US amid a declining share of Chinese garments. But in order to reach the ten per cent target the country has to achieve an annual export growth of 11 per cent.

As Chinese apparel export share is declining in western markets due to the rising tension between the west and China, Bangladesh’s exporters are likely to take advantage of the situation to boost their products. China is moving away from low value-added apparel to more sophisticated items, and this can be an advantage for Bangladesh’s apparel exporters.

However Bangladesh has to deal with issues like logistics, port handling capacity and skilled labor, environment and labor rights. Bangladesh must focus on AI-developed equipment, skilled labor and labor wage satisfaction to face the challenges in the coming years.

In fiscal 2021-22 Bangladesh’s export share was up by 36 per cent year-on-year. Earnings from July to August grew by 26 per cent compared to the same period of the last fiscal year. Bangladesh’s apparel exports to the EU grew by 59 per cent in the January to June period of 2022.

American Eagle is no longer soaring high as it joins the growing list of premium clothing retailers reporting bleak earnings worldwide. The apparel industry is currently trying to figure out what the consumer wants in post-pandemic period with lower demand as inflation squeezes tight budgets of the average middle-class consumer.

Quarterly revenues lower than expectation

American Eagle recently suspended its dividends as in the latest quarter, it fell 6 per cent from a year ago The company echoed other retailers’ issues with excess inventory and joined the bandwagon of retailers like Macy’s and Nordstrom who have resorted to extreme markdowns to clear products off shelves.

Chief Operating Officer Mike Mathias points out, ‘slowdown in demand’ caused by the macroeconomic environment. Jen Foyle, Chief Merchandising Officer at American Eagle, says the brand’s priorities are “adjusting our assortments and rightsizing inventory.” The need for markdowns to move inventory has upset the bottom line of American Eagle, with the company posting earnings of 4 cents per share for the quarter ending July 30, which fell short of the 13 cents per share expected by industry analysts.

American Eagle Outfitters, the parent company to American Eagle, Aerie, Bodd Synder and Unsubscribed brands have all recently posted dismal quarterly results, falling short on both top and bottom lines but still beating analyst expectations for the three months ending August 1, 2022. Except for intimate brand, Aerie which continues to be the retailer’s crown jewel, the company seems to be flying in grey and troubled skies.

Brand revenues of American Eagle declined 26 per cent during the quarter, while Aerie’s sales surged 32 per cent. Meanwhile, revenues in the company’s e-commerce business grew 74 per cent, or 47 per cent at American Eagle and 142 per cent fir Aerie. App downloads also increased during the quarter by 45 per cent. Even then, the company as a whole lost $13.7 million during the quarter, compared with profits of nearly $65 million at the same time last year. That’s on top of the company’s $257 million loss the quarter before that.

Rival Macy’s also slashed its revenue and earnings forecast for the year, with Chief Financial Officer Adrian Mitchell noting it has had to take necessary markdowns necessary to help clear inventory in all segments as “weakening apparel sales over the quarter as the consumer faces higher costs on essential goods, particularly grocery”.

Other retailers including Walmart, Target, Gap, and Kohl’s have also faced similar problems with bloated inventories and are employing various measures to stay afloat in the post-pandemic inflation-wary consumer. Walmart has focussed on aggressive markdowns to move clothing off their shelves which have led to a significant cut in profit expectations. Gap and Kohl’s, meanwhile, are looking to avoid some markdowns with a “pack-and-hold” strategy for certain items, which allows them to reserve excess inventory until demand rises.

While physical stores are currently loss-making, American Eagle Outfitters has been in expansion mode having launched ecommerce businesses across Japan, Hong Kong, Australia, Malaysia, Taiwan, and Singapore, in addition to a shopping site in Mexico.

However, experts feel by 2023, retailers might be able to adjust more quickly to demand as the supply chain normalizes, although for now, they need to struggle to adjust their offerings. The focus will be on expansion in important international markets where there is significant opportunity for growth, even though these may be smaller countries that were not on the map in pre-covid times.

The Yuletide is a couple of months away and Indian exporters of Christmas offerings have reasons to deck their companies with successes. It has been reported that India now ranks among the top five countries that makes the festive season merry in the US with offerings of festive T-shirts and decorations. According to US Customs, the total value of festival-related goods has jumped roughly three times compared to last year, with a value of $20 million.

Indian exporters gain edge

India edged out fellow competitor Philippines as buyers spread out with their orders, prompted by China’s strict lockdown as Covid-zero regulation came in to force coupled with rising labour costs. As Amit Malhotra of Asian Handicrafts says, orders are up 20 per cent from a year ago and they have increased production capacity accordingly. This year they have shipped over 3.2 million Christmas products, up from 2.5 million last year.

Even though China exports a sizable portion of Christmas items, a lot of first-time customers have just begun approaching Indian exporters. India exported festive items to over 120 countries already and in 2020-21 (April-Nov), such exports were valued at $39.3 million. Indian government stats show, export of festive-season items increased over 54 per cent from the fiscal 2020 levels in the year that ended in March, while exports of handicrafts increased by about 32 per cent over the same period.

United Arab Emirates, US, Mexico, Thailand and Philippines are the top five importers Indian Christmas items together accounting for 43 per cent of exported items. As Siddharth Jain, Partner in Kearney’s operations and performance practice says, China’s continuous decoupling from the global economy and the post-pandemic recovery presents an opportunity for India to accelerate its investment in lengthy competition and prioritize ‘capable of winning’ areas.

Tapping a growing market

The opportunity doesn’t end with Christmas. Over the past three years, India’s export of handmade carpets has grown substantially. India accounts for roughly 40 per cent of global exports of handmade carpet exports worth $1.37 billion in FY20. From April 20 to February 21 India’s the total carpet exports stood $1.33 billion. It seems global markets have acquired a taste for handmade goods from India. The list includes: woolen, embroidered & crocheted goods, hand printed textile & scarves, brocade among others.

Indeed, India has the potential to overtake China in handcrafted items that not only bring merry during the holiday season but also throughout the year. The big companies that are importing from India include: Walt Disney, Target, Harrods in London and Dillard’s Inc.