Due to the impacts of the Covid-19 pandemic, traditional markets of the garment industry, such as the US and Europe, which account for up to 70-80 percent of Vietnam’s garment exports, were almost paralyzed while the number of orders from the Asian region was small. Many garment enterprises have not received high-value orders, including suits and high-class shirts, while face masks and protective clothes, which are considered as life-saver for many enterprises, have seen sharp decreases in their prices due to excessive supply worldwide.
According to forecasts, if the situation does not improve soon, there will be about 60-70 percent of micro and medium enterprises facing the risk of closing down. Chairman of the Vietnam Textile and Apparel Association (Vitas) Vu Duc Giang said that the Covid-19 pandemic has caused a change in consumer culture as people have shifted spending on essential products instead of laying too much emphasis on shopping as before. To manage to survive, many garment enterprises are returning to the domestic market, but domestic demand is also weak because people are tightening spending.
According to the Ministry of Industry and Trade, in the first seven months of the year, textile production increased by 1.8 percent, clothing production decreased by 4.6 percent compared to last year. Garment and textile export turnover in the first seven months was estimated at US$16.18 billion, down 12.1 percent; fibers and yarns of all kinds decreased by 20.9 percent over the same period last year. It is forecasted that the total export turnover of the industry this year will be about $32.75 billion, down 16 percent compared to last year.