Skip
"We are open" at a door of a shop
Back to overview

Industry News: Harvard Business Review, Bain & Company

The New Normal

Is the economic recovery faster than forecast? In China, shops have reopened, and people are beginning to find their bearings in the new normality: Two months on from the first outbreak of COVID-19, China appears to be in the early stages of recovery. A reason for optimism, in the fashion industry too.

April 2020

Lockdown is over: People are tentatively leaving their homes, factories are resuming production, business are opening long-closed doors. China is gradually returning to some kind of daily routine. The first cases of COVID-19 were officially recorded in Wuhan, China, in late January 2020. According to the WHO, by mid-February the number of confirmed cases in China had increased to more than 60,000. The government responded with a strict lockdown and motorway and shop closures. This was a shock for the global economy, especially since China holds the second-largest share of the global retail market at around 21 per cent.1

But the drastic measures have been effective, and the curve of new infections has flattened out. Dr. Gauden Galea, WHO representative in China, told UN News: "This lesson in containment, therefore, is a lesson that other countries can learn from and adapt for their own circumstances." But what other countries can also see is that the economic recovery is starting sooner than perhaps expected. "Only six weeks after the initial outbreak, China appears to be in the early stages of recovery", notes a report in the Harvard Business Review on 10 March 2020. Many Chinese businesses have already transitioned from crisis measures to a state of economic recovery. From Apple and H&M to IKEA: hopes are up after many retailers reopened nearly all or all their shops in China.

A report by Bain & Company forecasts that when the pandemic is over, consumption will "largely follow patterns similar to the 2002-2003 SARS outbreak". At that time, expenditure on food and cosmetics quickly returned to normal levels while the demand for clothing even increased to above pre-pandemic levels. However, Derek Deng, Bain & Company Partner in Shanghai, warns against overly optimistic activity: "Consumer sentiment is still in the process of returning from panic to normal or a new normal". Quite when a total recovery will occur remains to be seen. China remains wary of the potential of new infections and the economic repercussions are not yet entirely foreseeable. However, if the current developments in China continue, nothing should stand in the way of trade shows like Cinte Techtextil China from 2–4 September 2020.

No doubt there are further lessons to be learned from the developments in China, Korea, Italy and the USA. Agility and adaptation: characteristics that should be maintained in a rapidly transforming word, also above and beyond crisis management. "Considering the time it takes to formulate, disseminate, and apply new policies in large companies, recovery planning needs to start while you’re still reacting to the crisis," states the report in the Harvard Business Review.

 

#Coronavirus #WHO #World Health Organization #Economy #Trade #Harvard Business Review #Bain & Company #H&M #Apple #Ikea #Coronavirus #COVID-19 #Cinte Techtextil China #Shanghai #China

 

Find out more here:

1 Statista (2020): Retail industry in China - Statistics & Facts

Tags

  • Industry news

Messe Frankfurt uses cookies to provide you the best possible browsing experience. By using our services, you consent to our use of cookies. More information