The Impact of Covid-19 on the Footwear Industry

 

Fashion accessories and footwear are considered to be “non-essential goods” and have suffered a
significant impact from Covid-19.

As we inspect the epidemic’s effects, we see many retail stores being shut down, ongoing orders being
suspended, and manufacturing getting impacted worldwide.

Last year (2019) was the start of an industry-wide slowdown which continued throughout 2020.
Production of footwear had grown by 21% since 2010 with an average growth rate of 2.2%. But during
2019 and 2020, the footwear products and exports only grew a measly 0.5% and 0.1% respectively.

Many business outlets are facing closure and the footwear wholesale business has seen a 15-25%
revenue loss. This also has a pronounced effect on profit with minimal to no revenue during the
lockdown period. To reduce loss, the average selling price of products has been significantly reduced.

Transition to E-commerce
Businesses have shifted their listings to online platforms e.g., Wholesale Marketplace. E-commerce has
proved to be the saving grace for many in this crisis with no end in sight. With the social distancing
norms in place and people unable to step out of their homes, e-commerce will significantly increase
over time.

But it’s not all sunshine and rainbows as many companies are having trouble transitioning to an online
medium. Problems in order receiving, delayed delivery times, and items running out of stock are only
some of the issues out of many.

Bigger brands have a quicker recovery period if their supplier remains operational. That said, smaller
companies face tougher climates which makes their fight for survival harder.

Significant Reduction in Sales
The footwear industry faced a severe reduction in sales during the pandemic. The closure of retail stores
hit business growth for both retailers and wholesalers. As a result, the footwear business is rapidly
deteriorating.

Supply Chains in Trouble
Footwear manufacturing is facing many issues such as halt of operations and cancellation of orders. This
not only affected the footwear sales but also influenced the lives of artisans. Labor forces working in
smaller factories were evacuated with no means of earning a livelihood.

Recessions
Like many other industries, the footwear industry is also facing recession. Unlike many other apparel
businesses, the footwear market heavily depends on craftsmen. It also needs designers, leather/rubber
businesses, and cobblers. Because of this downward spiral, a huge number of workers are experiencing
economic decline.

The Designer Crisis
In the footwear industry, each shoe has at least 2-3 designated designers. Their role is to make sure that
the shoe is ergonomically fit, comfortable, and aesthetically pleasing. Since shoe Wholesale Businesses
are closing down one by one, it's putting talented designers out of jobs.

Ending Thoughts
Even when restrictions are alleviated by the government; the market will be slow to recover. Many
customers, after months of confinement, will still be afraid to buy goods physically.

Similar to post-traumatic stress, buyers won’t feel confident in purchasing goods manually in fear they
might get infected. There will come a time when industries will thrive once again and people will
embrace one another without fear. All we can do is hope for the best.