An Assignment on

The effect of COVID-19 on Bangladesh’s Apparel Industry

Submitted To:

Muhammad Intisar Alam

Associate Professor
Department of Marketing
University of Dhaka

Submitted By:

MAVERICKS
 GROUP PROFILE

Id Name
03 Tanvir Ahmed
09 Jannatul Ferdows Riya
11 Syeda Nishat Tabassum
21 Ekram Uddin
31 Labib Hasan Shadhin
39 Md. Abdur Rahim Rahat
81 Kamron Naher
103 Afroza Mamataz
163 Mirajul Islam
171 Ferdouse Sultana
175 Mohammad Muddassir

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Table of Contents
Introduction......................................................................................................................................1
How retailers are continuing their business in Bangladesh during the COVID -19 period?...........2
What are the future prospects of Omni-Channel marketing in Bangladesh due to COVID-19?....4
Prospects of Omni-channel in Bangladesh and its people behavior............................................4
Do a PESTLE analysis of the impact of Covid-19 in the retail industry of Bangladesh?...............6
Political Factors...........................................................................................................................6
Economic factors.........................................................................................................................6
Social factors...............................................................................................................................7
Technological factors...................................................................................................................7
Legal factors................................................................................................................................8
Environmental factors..................................................................................................................8
After five years from now, how the retail market of Bangladesh will perform?.............................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
The report aims to provide a comprehensive idea regarding the effect of COVID-19 on
Bangladesh's apparel industry. It will examine how retailers are continuing their business in
Bangladesh during the COVID -19 period. It will also analyze what would be the prospects of
Omni-channel marketing in Bangladesh due to COVID-19. It will outline a pestle analysis
explaining the external factors related to the COVID-19 that could impact the retail industry of
Bangladesh. It will also explain how the retail industry of Bangladesh will perform in future,
after struggling with such unpredictable pandemic.

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How retailers are continuing their business in Bangladesh during
the COVID -19 period?
The year 2020 starts with the news of the pandemic of Covid-19. Initially, it has not been taken
as the topmost factor in Bangladesh. But day by day the impact of Covid-19 has risen and it
having a negative impact on different sectors of our country. The Covid-19 has caused
distractions to global trade, business and education. Due to worldwide transportation shutdown,
the entire of the global supply chain has been interrupted. That’s why the economic
consequences of the Covid-19 outburst are tough to handle.

The unprecedented virus has caused chaos on apparel brands and retailers, as shops are forced to
shut down, consumers are in the lockdown at their home and the sales of apparel products are
sharply declining. So the Coronavirus epidemic poses a hazard to the country’s apparel sector.
The economy and employment generation of Bangladesh mostly depend on garment
manufacturing and exports. In March when the manufacturing factories had to be closed to slow
down the spread of the Coronavirus, Bangladesh’s apparel industry has touched a new loss.
Garments exports, which account for 84.20% of the total export, in May, cut down by 62%. Dr
Rubana Huq, President, Bangladesh Garment Manufacturers and Exporters
Association(BGMEA) mentioned that revenues from global sales of could incline by 27% - 30%
due to coronavirus in 2020, which might bring down Bangladesh’s export earnings during June-
December 2020 by 30%. (Apparel Resources, 2020)

As Coronavirus is spreading in massive way Bangladesh, China, Europe, Italy, Spain, France and
other countries have expanded their lockdown. As the retail outlets are considerably closed,
international brands have either cancelled or halted the shipment of the product. Even they are
not taking the ready products that were ordered before. As postponed or cancelled orders are
piling up, manufacturers facing complications in disbursing their workers or employees and this
will directly affect the livelihood of the garment workers. If payments are not being received
within the time frame, it has a direct effect on the manufacturer’s cash flow and is forced to
delay payments to their suppliers. (Uddin, 2020) Manufacturers are even facing difficulties to
pay their operational cost. Due to this around 419 garment manufacturing remain closed since

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the last couple of months. And the most horrifying thing is that out of these 409 units, 100 units
have closed their operations permanently. (Economic Times, 2020) BGMEA President Rubana
Huq stated that every manufacturer should contact with their buyer and try to persuade them to
not cancel the order. She has even sent a letter to the global buyers urging them not to cancel the
orders so that at least they can pay wages to their customers.

It is not possible to shut down factories until the virus dissolve. BGMEA has issued some
general instructions to the member factories regarding reopening the factories. They have to
prioritize workers that live neighboring. Those who returned from their villages should be
discouraged to come to the factories. They should not welcome those workers who are at risks,
such as a pregnant woman or workers age over 50. They should consider compensated leaves for
these workers. This guideline procedure also related to social distancing, use of PPE and masks,
sanitation, hand washing, having a medical team and isolated place for those who are suspected.
BGMEA has set up a testing lab for workers to be tested for Coronavirus. (“how coronavirus is
impacting the global apparel industry”, 2020)

Moreover, in response to urgent pleas, many of the international brands like H&M, INDITEX,
Target, KIABI, M&S, C&A, PUMA have agreed to take deliveries of their preceding orders.
(Economic Times, 2020) The brands have also agreed that they will pay as their previous terms
and agreements. Government has given 5000 crores to reduce the damage of the RMG sector.

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What are the future prospects of Omni-Channel marketing in
Bangladesh due to COVID-19?
COVID-19 pandemic has changed the business landscape. As it has started impacting the global
business and economy, it is a challenge for the marketers to survive in such a crisis. The
pandemic is radically shaping consumer behavior. According to first insight, more than 40% of
shoppers say fears have already impacted their buying decision. More specifically, 29% are
using buy online services to have products delivered to their homes, while 18% preferred
curbside pickup. (The Loadstar, 2020)

Most of the customers are going for online digital marketing. Sellers can’t sell their products
from brick and mortar store. Most of the customers are buying products online. As customers are
going from offline to online, companies have to effectively maintain their Omni channel
logistics. It provides customers with a seamless experience from online to the mobile device, to
brick and mortar, to phone chat with the company’s customer support teams. (Clont Font, 2020)
Every channel is being affected due to COVID-19.

Prospects of Omni-channel in Bangladesh and its people behavior 

Buy Online, Pick-up in Store: In the nearest future of Bangladesh, people will not gather in the
store like grocery, pharmacy and big-box retailers because of COVID-19. More than 8 people are
gathered in one store where are going to come under pressure to expand their throughput of
customers and orders. For diminishing, risk customer will order and make payment online and
pick-up the product from the store at a certain time. 
Door to Door Services: People will not be interested to pick the product from a particular store.
They won’t like to go outside their home for this product because of infecting COVID-19. So
they would like to door services. They make payment and give shipping charge to bring the
product at their home. 
Mobile point and Sale Programs: When restaurants and retail locations are closed to foot
traffic for containment, then drive-thru or drive up becomes the only available option, and
standing up a device that can take orders and payment at the same time offers the ability to
continue to transact business.

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Brick and Mortar Store: Some people are not interested to buy products from the physical
store. People will go store but not as much as before of COVID-19. It will very be challenging
for both of them. Consumers will avoid crowded stores and will prefer low exposure, contactless
shopping. Hygiene-level of stores will be the key differentiator for customers.
Omni-channel will become the way of life and secondary packages are going to be reconfigured.
Flexibility around that will enable better stocking and larger distribution on the retailer’s end.
This situation will fall in the huge impact on Omni-channel marketing and will be changed the
whole marketing strategy. COVID-19 changes the consumer’s behaviour and their buying
process. 

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Do a PESTLE analysis of the impact of Covid-19 in the retail
industry of Bangladesh?
PESTLE analysis is a framework to analyze factors like political, economic, social,
technological, legal, and environmental (Frue, 2020). This framework will be used to analyze the
impact of Covid-19 pandemic regarding these factors in the retail industry of Bangladesh.

Political Factors
The profitability and revenue of the retail industry are affected by government policies (Levy et
al., 2019). The decisions are taken by the government regarding the COVID-19 pandemic impact
the economy, consumer buying habits. The government of Bangladesh has taken numerous steps
from the beginning of this pandemic. Almost all the production in all sectors of the retail
industry was closed around one month. All the educational institutions have been closed since
18th March and the impact of this situation causes irrecoverable loss in the retail sector (Natives,
2020). The import and export business of all products except pharmaceutical products have been
stopped from the beginning of this pandemic. It is a big challenge for the government to control
the consequences of this pandemic. It will take a long time to ensure the stability in this industry
after the pandemic. The government distributed 12.5 billion takas among 5 million poor people
as a donation. Besides, 50 billion takas were declared and distributed as incentives for only
garments industry and 7275 billion takas have been declared as incentives for the selected
businesses around the country ("Covid-19 and its impact on Bangladesh economy", 2020). Thus
retailers are still fighting with these types of help from the government.

Economic factors
According to the IMF, there may be a 2% decrease in the growth of GDP of Bangladesh in the
current fiscal year. The economic value of Eid-ul-Fitr is around 2,000 billion takas (Express,
2020). According to the Bangladesh Dokan Malik Somitee, the amount of economic transaction
during Eid season in retail stores is around 600 billion takas. But the pandemic causes a severe
loss of around 560 billion takas during this Eid season. In readymade garments industry, nearly
1.6 billion dollars of the order has been cancelled during this pandemic (Natives, 2020). This has
a direct impact on millions of employees. According to the Bangladesh Tour Operator

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Association, there may a loss of around 57 billion takas (including 20 billion losses in Cox’s
Bazar during Eid season) loss in this year and this will have a great impact on 40 million people
who are connected to the tourism sector. More than 5 million people dependent on the driving
rickshaw, CNG, motorbike for livelihood are deprived of from income. Around 50 million
people working informally directly suffer because of this pandemic. According to the World
Bank, remittance earning of Bangladesh decreases by 18% in this fiscal year. The increase in call
rate up to 33.25% in the budget impacts the purchasing ability ("Covid-19 and its impact on
Bangladesh economy", 2020). Many retailers cannot pay their store fare as they have a few
business activities. People are losing their jobs at an alarming rate that increase the
unemployment. These issues have a direct connection to the income of the people of Bangladesh.
Thus their purchasing ability is decreasing with an alarming rate. Moreover, the price of
consumer’s products is also increasing because of high production and transportation costs. The
price of pharmaceutical products goes beyond the ability of general people. However,
Bangladesh Krishi Bank has declared a special package for poor farmers and Bangladesh bank
has also developed 380 billion takas as refinance fund (Natives, 2020). These types of steps help
people to fight during this pandemic.

Social factors
From the beginning of this pandemic in Bangladesh, the buying habits of people are greatly
influenced. People across the country focus on purchasing foods and pharmaceutical products.
Income source of most people has been stopped for a long time. The purchasing rate clothes,
shoes, luxury products are very low compared to other products (Natives, 2020). Thus the
production of these types of products is decreasing. As a result, the scope for retailing in many
sectors has been diminished. By thinking about the consequences of this pandemic, numerous
social voluntary clubs are helping people by providing free medical services, foods, money etc
(Express, 2020).

Technological factors
The technological environment provides the best support for retailers in this pandemic regarding
restaurants, organic foods and fruits, clothes, shoes, ornaments, bags etc (Frue, 2020). Though
in-store retailing has been closed for many retailers, they can use the technological platform to
sell their products. Mobile banking helps most in this regarding. For example, most of the

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transactions of 40 billion takas during this Eid season was done through mobile banking. 12.5
billion takas that were distributed by the Government to the poor has also occurred for the help
of Bkash ("Covid-19 and its impact on Bangladesh economy", 2020), Nagar, and other online
banking methods. Evaly, Daraz and other online platforms are doing a great job to sell products
through the internet. But, a few cases like the home delivery employee of restaurant affected by
Covid-19 have become a major concern for the customers. However, the significance of
technological factors in the retail industry is critical.

Legal factors
The rules and regulations regarding retail business in Bangladesh are not very much strict. One
can easily start any retail business in any place across the country by taking a trade license. As
this pandemic creates a barrier to continue retailing, introducing new business is difficult
("Covid-19 and its impact on Bangladesh economy", 2020). But one can easily sell many
products by using the internet. In fact, in this age of globalization, many people are selling
products on Facebook. Pharmaceutical products have a lifetime demand and people are buying
medicines and other instruments from Facebook. But, the Government charges 15% VAT on
Facebook boosting that pushes a great impact on the retailing business by increasing retail price
(Express, 2020).

Environmental factors
Though the emerging of Covid-19 in Wuhan, China, it has been impacting across the world.
Almost all the countries are the victim of this pandemic. The virus that emerged in a city affects
all the businesses globally. But it also shapes a new level to the pharmaceutical and online-based
businesses (Frue, 2020). In-store retail business in Bangladesh is passing a severe time but
retailers are doing a great job through the internet. This pandemic proves that businesses have to
do many things for the environment. Many large business corporations like Bashundara Group,
[Link] Group are doing their best for the people by providing medical services, helping people
with foods, money as a part of the Corporate Social Responsibility (Natives, 2020). The
Government forces the retailers to ensure the safety of the products by packaging goods
properly. People are also becoming aware of while receiving products from retailers. Super
shops, banks, even small retailers are ensuring the safe environment of their shops by providing
hand sanitizer while entering their shop and many more activities (Express, 2020).

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After five years from now, how the retail market of Bangladesh will
perform?
The retail industry of Bangladesh going to have a huge change due to the outbreak of COVID-
19. The economic consequence is tough to handle as the entire of the global supply chain has
been interrupted due to worldwide transportation shutdown. The decline in national and global
demand for manufactured goods, particularly in the garment sector, risks creating unemployment
and deepening poverty. Till now, the Bangladesh readymade garments (RMG) industry has
received work order cancellations of nearly $3 billion. Around 2 million workers in the
industries are being affected by this. Around 4 million people are directly engaged with the RMG
sector e.g. Backward linkage industries, accessories and packaging factories and transportation
sector. (Economic Times, 2020) Bangladesh’s export earnings are increasingly becoming
dependent on the readymade garment (RMG) sector as 84% of the country’s remittance comes
from this sector. Foreign buyers already have started cancelling their orders. According to
BGMEA said, more than one thousand RMG factories received order cancellation from buyers

which is worth almost us$3 billion. (Textile Today, 2020)

It is expected that shopper traffic to discretionary store formats will be slow to trickles even if
there is not a total lockdown because people are now avoiding public ways. Many retailers
already shutter stores temporarily, some may never re-open. So, retailers need to find an
alternative way to run their business. In Bangladesh, people are not yet habituated with online
shopping. They are used to buy from physical stores. Many mom-and-pop businesses won’t
survive in future because they rely on foot traffic and don’t have a strong online presence.
(Economic times, 2020)

So, e-commerce will be a net beneficiary as the crisis is pushing more people to shop online and
some will likely keep buying online at elevated levels once shops reopen. The retail industry
needs to evolve new ideas to win people's trust and confidence so that they will feel encouraged
to buy from online sites. They need to adopt Omni-channel marketing to ensure customers
convenience and comfort. In this situation the Bangladesh government can give retailers big
rumination to overcome this pandemic situation, if they can use this properly, they can minimize
the loss. Bangladesh government should adopt expansionary fiscal policies combined with the

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monetary stimulus to keep credit flowing in the economy. Traditional retailers need to adapt to
changing patterns of consumer behaviour. They need to develop a sustainable model for growth
in productivity and performance.

Bangladesh economists suggest some policy for future so that retail sector can run smoothly. The
proper implication of the policies can help to overcome the current loss. We are too much
depended on other countries like China, USA to collect raw materials. That’s why whenever
there happen any issues that directly impact on our retail sector. We need to reduce dependency
on other countries and upgrade the textile sector to produce domestically the needed things. We
need to ensure the fullest utilization of our manpower. People will be more dependent on digital
technologies for purchase and payment. According to some economists, people will eventually
go back to their same shopping patterns, once they get back to normal life. In a developing
country like Bangladesh, it is not easy to change people’s traditional behaviour, after five years,
it is difficult to say whether people will fully rely on online shopping. But the retailer needs to be
proactive. (Dhaka Tribunes, 2020) They should pay high importance to people’s health and
safety to ensure a sustainable future. They need to be adoptive with emerging technologies to
minimize loss from such unpredictable situations.

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Conclusion
Regarding the answer of these questions we can come to a conclusion that this pandemic has
already made a big loss in apparel industry. If this pandemic exists a long time, apparel industry
has to think about their survival. They have to take sustainable decisions to run their business.
Government should also help this country to survive. Because as a developing country working
together and making sustainable decisions can bring out this industry from the great loss.

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References
Apparel Resources. (2020). [Link]
industry-policy-support-product-diversification-tackle-situation/?
fbclid=IwAR1hjAAZD_LaAURuI9MrlYN7LSwRKq3C3pwLuOkyL_OOihsUuZ31Td97c1w.

BANGLADESH RETAIL CONGRESS 2020: TRAVERSING FUTURE OF RETAIL. BBF BLOG.

(2020). Retrieved from [Link]
retail.

Covid-19 and its impact on Bangladesh economy. The Business Standard. (2020). Retrieved 26
June 2020, from [Link]
69541.

Economic Times. (2020). Bangladesh garment factories reopen, defying virus lockdown.
[Link]
factories-reopen-defying-virus-lockdown/75401684.

Express, T. (2020). COVID-19 and its impact on Bangladesh economy. The Financial Express.
Retrieved 26 June 2020, from [Link]
on-bangladesh-economy-1592580397.

Frue, K. (2020). PESTEL/PESTLE Analysis of The Retail Industry. PESTLE Analysis. Retrieved

26 June 2020, from [Link]
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[Link]
industry-free-to-read_id138313.aspx. (2020). [Blog]. [Link]
how-coronavirus-is-impacting-the-global-apparel-industry-free-to-read_id138313.aspx.

Levy, M., Weitz, B., & Grewal, D. (2019). Retailing management (9th ed.). McGraw-Hill
Education.

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Natives, D. (2020). Covid-19 impact and responses: Bangladesh – Fair Wear. [Link].
Retrieved 26 June 2020, from [Link]
production-countries/covid-19-impact-and-responses-bangladesh/.

Omni-Channel Experiences. (2020). [Blog]. Retrieved 3 July 2020, from

[Link]

Textile Today. (2020). Bangladesh textile and apparel industry during COVID-19.
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The Loadstar. (2020). Bangladesh in lockdown as virus halts business and threatens the
economy. [Link]
the-economy/.

Uddin, M. (2020). Crippling Bangladesh’s apparel industry. Dhaka Tribune.

[Link]
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LpCXHaVu1LLfquV7dC4yRx07FqqRd1LMVk.

Vijayvergiya, A. (2020). A 4-Step Approach to Drive Omni-channel Retail Excellence. BBF

BLOG. Retrieved 3 July 2020, from [Link]
retail-excellence.

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