After the outbreak of the new coronavirus, the transfer of international purchase orders outside China may indicate that the Indian subcontinent, especially India, will benefit from it, and the market demand for Indian cotton will increase.
The outbreak of novel coronavirus has aroused great concern in the global financial market. Shares of Chinese brands fell 9%, while Italian brands are expected to fall 1.8% in the first half of 2020. Several high-end Italian brands have closed their Chinese stores, raising concerns that the industry will lose a lot of sales if the virus is not contained quickly. Carlo Kapasa, President of CNMI, Italy's national fashion chamber, worries that the outbreak could cause the industry to lose 1.8% of its turnover in the first six months of this year. As a precaution, Italian brand Ralph Lauren shut down half of its 110 stores in China, while Tiffany shut down 70 of its 240 under government orders.
Turkey is the most desirable and profitable market
Because people can no longer leave home, the outbreak of the virus has brought garment production to a standstill in several provinces of China. This is prompting them to look for alternative markets to make aparelles. An emerging market is known as Turkey, which is one of the most desirable and profitable markets because of its impeccable quality, high production speed and low price. Most brands and chains are expected to move to Turkey soon.
Orders from China to Bangladesh for aid industry
The Indian subcontinent, including Bangladesh, India, Pakistan and Indonesia, is likely to enjoy rapid growth momentum due to increased demand for raw materials. In particular, Bangladesh may benefit from the fact that China's immediate orders may be transferred to the country. However, the country needs to quickly back up alternative resources that it predicts potential demand. Some of the upcoming exhibitions may also be moved to Bangladesh to attract foreign tourists to the country. This could open up future business opportunities for the country.
The gospel of Indian industry
On a positive note, the virus is proving to be a boon to Indian industry, as it will enable Indian exporters to target markets previously dominated by Chinese exporters. If China fails to resume production within 30 days, its major customers in Vietnam, Cambodia, Thailand, South Korea and the European Union may turn to India for finished products, clothing and fabrics. As the fourth annual fashion status report of fashion business and McKinsey, Indian clothing market is expected to reach 53.7 billion US dollars in 2020, becoming the sixth largest clothing market in the world.
This surge will also make India's textile industry more prosperous. Cotton stocks in the country are expected to account for 16% of global stocks in the quarter. Last year, India exported 800000 to 900000 bales of cotton to China. In the first four months of the year (October January), 600000-7 million bales were shipped to China, and another 300000 bales are expected to be exported soon.
Currently, India exports $223 million of leather tanning and dyeing extracts to the global market. If China's exports of these goods are affected, Indian industry may fill the gap and look profitable. However, it will take a while for India to match its China counter segment, as Indian traders do not have the same type of self-discipline, liquidity, scale and scope that China offers.
