Between January 2022 to July 2022, Cambodia’s exports rose 47 per cent compared to the same period a year earlier.

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, making it the largest employment segment in the country.

Although demand for garments is usually inelastic, or less sensitive to changes in income, sharp drops resulting in a global recession would be felt in small nations, such as Cambodia. A multiplicity of negative factors ranging from geopolitical tensions to economic uncertainty to extreme weather patterns suggests that the next six months look bleak for global growth and Cambodia’s garment exports to the US and EU.

Though the outlook is grim, as reflected by the western purchasing power and a slowdown in purchase orders, diversification of export markets and production are key to avoid similar problems in future. While Cambodia’s growth has been remarkable, it is insufficiently diversified in products, markets, and factor inputs.

India has the potential to be one of the world’s largest exporters.

The value of festival goods and accessories sent by sea to the US in August 2022 from India was roughly three times what it was at the same time last year.

Even though China exports a sizable portion of Christmas décor items, a lot of first-time customers have begun approaching Indian exporters. Exports of Christmas decorations climbed by more than 54 per cent from the fiscal year 2020 levels in the year that ended in March, while exports of handicrafts increased by about 32 per cent over the same period.

Not just Christmas items are popular. Orders from the US and Europe have sharply increased for the third-largest economy in Asia, with the increase focused on labor-intensive, low-cost industries, including apparel, handicrafts, and non-electronic consumer goods.Taiwan, the EU, the US, and Japan are eager to give India another chance.

Buyers have diversified their supply sources in response to rising labor costs and disruptions from China’s strict Covid-zero regulation. India is now among the top five countries sending T-shirts and holiday decorations to the US.India has passed El Salvador to rank among the top five producers of cotton T-shirts for the US this year.

Several factors, including a ban on all cotton products from China’s Xinjiang area due to claims of maltreatment of its ethnic Uighur Muslim minority, are responsible for this.

China’s continuous decoupling from the global economy and the post-pandemic recoverypresent an opportunity for India to accelerate its investment in lengthy competition and prioritize capable- of-winning areas. India is predicted to have the greatest labor-force density in the world by 2030 and may contribute more than $500 billion yearly to the world economy.

Even though the US-China trade war began with supply chain diversification in 2018, India hadn’t made much progress at that time since Vietnam had monopolized the majority of the orders that were flowing away from China.

Companies land big orders

Order books for medium- and large-export companies increased by 30 per cent to 40 per cent in the previous fiscal year. This upswing will be more apparent in the current fiscal year, which ends in March 2023.

Cost barriers

However non-labor costs remain a barrier to the expansion of low-value-added manufacturing. The main issues include the past issues with contract enforcements, tax transparency etc. These problems must be rectified in order for India to fully realize its potential as a manufacturing hub because they do provide a barrier to its manufacturing goals.

Euromonitor International’s latest research shows, future prospects for global luxury goods and fashion industry appear bright despite current political and economic instability and the ongoing global pandemic. Key players continue to navigate challenges by reassessing their priorities and operations and meeting consumer’s evolving needs. Recovery across regions appears uncertain despite the current positive outlook on account of rising interest rates, inflation, supply chain issues and the Russia-Ukraine war. Key players are being pressurized to adapt to new consumer lifestyles and changing retail preferences with a greater importance being placed on offering value and sustainability on both a social and environmental level.

The pandemic has brought the luxury goods and fashion sector under scanner besides highlighting the plight of textile workers around the globe. Fashion leaders across the world are focusing on diversity, equity and inclusion (DEI) with consumer consciousness rising to new heights.

Luxury consumers voice opinions on social media

Consumers of luxury and fashion products are being vocal about their political views on social media. To cater to their evolving demands, fashion and luxury houses are adopting a more diverse and inclusive world with some high-profit brands featuring different sized models, embracing all cultures and races.

The concept of diversity is based on various identity theories established by psychologists since the 1970s. It is also based on the eight ‘socially constructed identities’ established by American psychologist Allan Johnson in the 2000s. This model comprises eight major identity traits that help individuals understand who they are and where they come from. The traits allow individuals and corporates to better understand themselves and others by exploring memberships of main social groups and creating more inclusive spaces.

Disconnect between companies’ promises and reality

Fashion brands and companies across the board have pledged to adopt more inclusive hiring practices and hire more people from diverse backgrounds in their marketing campaigns. However, may brands fail to adopt inclusivity indicates survey reports of influencers and industry leaders. There remains a notable disconnect between consumers desires, companies’ initiatives and reality across their business modes. This disconnect threatens their customer retention rates. Indeed, many consumers, influencers, employees and others still fail to adopt diversity despite pledges to create more sustainable and inclusive business models.

Embedding diversity through internal communication

Diversity, equity and inclusion needs to be embedded into a company’s culture through internal communication and employee training. Being transparent also helps build a positive brand image and consumers valuing the company’s efforts and integrity. It also boosts customer loyalty and companies’ commercial success.

Aware of this, corporates are including inclusion and equity into their diversity theory. They are hiring diverse talent, or featuring diverse models to create a sense of belongingness amongst all consumers and provide them with fair and appropriate opportunities to achieve their full potential.

Focusing on consumers, the concept of diversity, equity and inclusion also encompasses the entire planet. To make them successful, companies needs to integrate them into all aspects of the business lifecycle.

A two-year long pandemic followed by an ongoing war has shaken the global economy. Inflation, economic volatility seems like the new norm as consumers worldwide rethink purchase of non-essentials. In the global apparel reselling sector, the emerging picture is many shades of grey. Are apparel resellers distraught with new consumer decisions or are they not affected? In 2021, the global market value of secondhand and resale apparel was estimated at $96 billion and predictions are positive that in the next few years, it would be valued at $218 billion.

Seconds records good growth in 2022

A distinct trend has emerged where pre-loved fashion items are being purchased at a much higher rate than before as consumers cash in on the supply of much-loved items flooding the market. A perfect example of the state of the sector is Poshmark, Inc., a leading social marketplace for new and secondhand style. In mid-May, it announced Q1 financial results. The company clocked in net revenues of $90.9 million in the first quarter of 2022, 13 per cent year-over-year increase from Q1 of 2021. Manish Chandra, Founder and Chief Executive Officer of Poshmark feels investments in product innovation and marketing contributed to record active buyer growth to 7.8 million in the first quarter, up 16 per cent from the same period last year.

Meanwhile, The RealReal, the world’s largest online marketplace for authenticated, resale luxury goods reported financial results for Q1 ended June 30, 2022 and Robert Julian, Co-Interim CEO and Chief Financial Officer is upbeat. The 2022 second quarter gross merchandise value (GMV) and total revenue increased 30 percent and 47 per cent respectively, compared to the second quarter of 2021. Julian says during Q2 of 2022, The RealReal continued to see strong demand in business, especially for women’s apparel, shoes and handbags.

However, Thrift brand thredUP hasn’t fared well. Its Q1 2022-23 results revealed revenue stood at $72.69 million, a downslide of $20.71 million, registering a 29 per cent profit loss. The problem stems from this thrift app’s inability to change the Gen Z mindset towards accessible fast fashion. Gen Z forms the bulk of its customer base and thredUp is trying hard for college students to ditch fast fashion and value luxury items. Success has been limited and thredUp is currently rethinking its communication program. A thredUp survey indicates 2022 will be the fastest growing year for the reselling market, pegged at 24 per cent growth.

The story is slightly different for the niche second-hand luxury goods. Its transition into digital and online selling platforms is providing a greater access as the luxury consumer demographic undergoes change. While the second-hand luxury goods niche sector is still less than 4 per cent of overall market, according to Statista estimates, second-hand luxury has the potential to become more relevant in the future, growing at 8 per cent 2022 onwards.

Positive predictions are keeping expectations buoyant as the conscious consumer is leaning towards second-hand items as socially-conscious purchases will ensure sectorial success.