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MONDAY, JUNE 16, 2025
Covid-19 second wave hits RMG: Recovery depends on how quickly you react

Panorama

Nabeel ud Daulah
28 November, 2020, 12:35 pm
Last modified: 28 November, 2020, 09:48 pm

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Covid-19 second wave hits RMG: Recovery depends on how quickly you react

After the punishing experience of a first wave of the pandemic and a looming second wave, the question now is, how do you react to a situation like this?

Nabeel ud Daulah
28 November, 2020, 12:35 pm
Last modified: 28 November, 2020, 09:48 pm
Illustration: TBS
Illustration: TBS

The world was unprepared when the first wave of Covid-19 hit, because we had never seen a pandemic like this in our lifetime. We did not have a template on how to react.

The quick reaction and policies put in place by our Honourable Prime Minister Sheikh Hasina helped us overcome the initial crisis. Moreover, the guidance and support of BGMEA, under the leadership of Rubana Hoque, helped us to take quick and decisive actions on vital issues such as factory closure and ensuring the health and safety of our workforce.

The degree of disruption garment factories experienced during the first wave of the pandemic was largely dependent on the profile of their customers.

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Some factories saw more cancellation than others. In our case, orders dropped more than 30 percent overnight.

After the punishing experience of a first wave of the pandemic and a looming second wave, the question now is, how do you react to a situation like this?

You can panic, or you can focus on taking positive steps.

Illustration: TBS
Illustration: TBS

If you take us - DIRD GROUP - as an example, we challenged our teams to introspect and come up with ideas that would help us overcome this difficult period.

From a marketing perspective, we tried to support our customers as much as possible. In a situation where all stakeholders are severely affected, the only way to survive is to work together.

The customers and sellers of goods and services are supporting each other. We negotiated the deferral and cancellation with them in a way we can come out of the situation together.

With the second wave looming, countries like Canada and the United Kingdom are imposing lockdown again. Although this lockdown will almost definitely affect the business volume, the other perspective is that customers have also become partially acclimatised to this situation.

Our customers are aware of the imminent second wave, but they are also more optimistic that the effects on business may not be as severe and protracted as the first wave.

This can partly be credited to the e-commerce section that moved to the mainstream during this period. On the other hand, our customers are more used to the situation than before, and therefore less panicked.

Many customers are saying that even if there is a slowdown, it won't be as drastic and dramatic as the first wave. Having said that, without exact knowledge of how long this pandemic is going to go on, it is difficult to predict how severe that slowdown might be.

As there is some positive news on the horizon with the vaccine arriving, people, in general, are more optimistic about the future.

In terms of feedback we are receiving from our customers, we haven't so far faced cancellations. This could also be a result of the hard work we have been putting in following the first wave.

After the first wave hit, we went for an aggressive marketing drive. We focused on diversifying our revenue streams by extending the range of customers we were serving, increasing our product range, and also diversifying the number of countries we have been exporting to. 

Whereas in the past around 90 percent of our products were exported to Europe, the United States, and the United Kingdom, we are now serving a much more diversified customer base. For example, we are now exporting to countries like Chile, Dubai, Ecuador and India. We have added all these new countries after the first wave of the pandemic.

We realised that all countries are not going to react to the pandemic in the same way. Some economies are going to recover a lot sooner, while others might get into a protracted slowdown. To hedge our risk, we wanted to diversify the export base. As a result of diversifying the export countries, there is a balance in the risk now.

Photo: TBS/ Salahuddin Ahmed
Photo: TBS/ Salahuddin Ahmed

So, when Europe is going through a slowdown, in South America, or India for that matter, the slowdown is not that extensive. Thus, diversifying export base helped us in balancing the risk and ensuring that one particular country doesn't severely impact the export of our factory.

We are quite positive that, no matter what happens, we are a lot more aware of the situation. Both workers and the management are aware. This, however, is not industry-specific. This is about our organisation and the strategy we took, which worked for us.

Now how the second wave will hit the RMG sector at large depends on the customer base that you serve. For example, if you have more fashion-driven products, then they might get affected more severely than the lower-priced products. Without recognising which segment of the population your customers are serving, it is tough to predict how severely they are going be affected.

For any factory, irrespective of the strategy they have taken and businesses that they have been doing, if the customers that they have been serving cannot come out of the situation well, then as their supplier, you are going to be negatively affected.

While there are abundant examples of how the industry has been affected negatively, there are also examples of some customers, Walmart for an example, who did better even during the pandemic. So the companies in Bangladesh who served these customers were able to come out of the situation comparatively better.

File Photo: Salahuddin Ahmed/TBS
File Photo: Salahuddin Ahmed/TBS

The industry as a whole has indeed contracted and that is going to impact some companies in Bangladesh negatively. But it is the companies that are the most agile and able to think of creative solutions that will be able to cope with the challenges most effectively and prepare themselves to take advantage of the inevitable opportunities that present themselves when the recovery finally begins.

During such risky times, you have to be responsive to the market and inward-looking, to explore how you can improve your facilities and productivity. Unless you are proactive and making positive changes, you will end up waking up to a situation where it is too late to make the changes necessary.

If you are a healthy company, you should also prepare some buffers so that you have enough breathing room to navigate recovery in case the unexpected occurs. When bad times come, all you can do is prepare for the worst and hope for the best.

Thoughts / Top News

RMG / RMG industry / Apparel industry / Apparel makers / Apparel Hub / Covid-19 second wave / Coronavirus Second Wave / Covid-19’s second wave / Economic Effect of Covid-19 / RMG Sector of Bangladesh / Bangladeshi RMG Sector

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