Bangladesh has come out ahead in the race for the world’s No. 2 clothing exporter after China—at least for the moment.
After ceding ground to Vietnam in 2020, the South Asian nation clawed back its lead in the first seven months of 2021, dispatching $18.8 billion worth of apparel exports versus its rival’s $16.9 billion, according to trade data from the two countries. The Covid-19 pandemic continues to weigh heavily on their bottom lines, however. Compared with the same period in 2019, Bangladesh and Vietnam underperformed by 7.7 percent and 7.3 percent respectively. The numbers are liable to be worse following the onslaught of the delta variant of the virus, which has disrupted shipments from South and Southeast Asia due to widespread lockdowns.
The situation is especially fraught in Vietnam, where daily positive cases continue to average at 12,000 and more than half of its 98 million population is under stay-at-home orders. Investment firm BTIG predicted this week that Nike has already sacrificed 80 million pairs of shoes to two months of “virtually no unit production.” Another four months or so of 50 percent production capacity could cost the sportswear juggernaut 160 million pairs in total. Retailers from Chicos to Dicks to J.Jill to Lululemon are also wrestling with sourcing headwinds from Vietnam‘s production woes.
On Monday, the Vietnamese government said it was accelerating its vaccination program in a bid to ease restrictions by the end of September. While some cities are better at getting shots in arms than others—roughly 80 percent of Hanoi’s 5.7 million adults have received at least one dose, for instance—the country’s overall vaccination rate remains low, with 28 percent of its 98 million-strong population receiving one jab and just 5.2 percent getting both. To cope with supply shortages, which have stymied progress, Vietnam’s health ministry has approved combinations of different two-dose coronavirus vaccines. Prime Minister Pham Minh Chinh has also urged Covax, the vaccine-distribution program directed by the World Health Organization, to deliver shipments of the vaccine “in the fastest manner and with the largest volume possible.”
The transformation has been a sudden and dramatic one for a country that until April was praised for maintaining one of the world’s best containment records. Among the top five garment exporters, it was the only one not to have scuppered production last year. It was also only last month that the World Trade Organisation’s World Trade Statistical Review declared Vietnam the David to Bangladesh’s Goliath for amassing $29 billion in apparel exports in 2020, or 6.4 percent of the global market, up from 6.2 percent in 2019. Bangladesh, on the other hand, racked up $28 billion and a 6.3 percent slice, down from 6.8 percent the previous year.
Vietnam has since logged more than 610,000 positive cases and 15,000 deaths, most of them since May. Ho Chi Minh City, a business hub and the country’s outbreak epicenter, has accounted for half of those infections and 80 percent of deaths. As a result, one-third of the country’s apparel and footwear factories has been forced to suspend operations.
State media reported this week that Vietnam’s economy will rally between 3.5 percent and 4 percent this year, well below the government target of 6.5 percent, as a result of pandemic-induced pressures. The country had finished 2020 with 2.92 percent growth.
Meanwhile, Bangladesh is seeing a light at the end of its long tunnel. It recorded 35 deaths from Covid-19 on Tuesday, its lowest in a single day in three months. To date, the nation has seen 1.5 million infections and more than 27,000 deaths. Schools in Bangladesh have reopened after over a year and a half. Inoculations continue apace, though vaccine shortfalls are again causing a bottleneck. Some 8.2 percent of Bangladesh’s population of 163 million people are now fully vaccinated, and more than twice that number has received at least one jab.