The fashion industry was already looking to downsize its China sourcing, and it seems the novel coronavirus has quickly fueled further supply chain diversification.
At Sourcing at MAGIC this week, exhibitors from India, Bangladesh, Mexico and the U.S., in particular, “reported record shows,” according to Chris Griffin, president of international business development for Sourcing at MAGIC.
“The misfortune China is experiencing right now obviously will create opportunity for other countries. The supply chain is very fluid in that way,” he told Sourcing Journal. “The coronavirus outbreak has accelerated that diversification into non-China suppliers and it makes sense…India has capacity, they cover the broadest number of categories. Mexico, Made in USA speak to the reshoring trend and shorter lead times, being closer to home, being more nimble.”
And as the number of people infected with the virus swells—reaching 31,481 both in and outside of China, an 11.3 percent climb over the day before, according to the World Health Organization—scaling back on China-made goods will be an ongoing trend, particularly as tariffs remain on the table and a full, phase two deal feels far off.
“Unfortunately, I don’t think the issue in China will resolve in the near term and these other countries will be the beneficiaries,” Griffin said.
Despite the pall the coronavirus has cast over the world and the problems it has already posed for supply chains, Griffin said Sourcing at MAGIC booths were still bustling and he was “pleasantly surprised with the traffic in the pavilion.” Chinese exhibitors, albeit a trimmed cohort, amounted to “over 200 booths,” which, according to Griffin, “along all categories, whether it was footwear or denim or apparel, had a strong show, with no one wearing masks and no one coming to us with any fear.”
While the coronavirus certainly introduces new risk for supply chains, Griffin believes it’s a storm the industry will weather.
“People on the sourcing side are a hearty bunch…we survived SARS, we survived Ebola,” he said. “They’ve been through a few things and they’re not faint-hearted.”