Will Delta Variant Cause Sneaker Shortages?

Already handicapped by semiconductor shortages, world trade is now threatened by the cascade closure of hundreds of factories in Southeast Asia where are produced clothes, shoes and other sports or fashion accessories consumed on the planet. Relatively spared in 2020, countries such as Vietnam, Thailand or Indonesia, still very little vaccinated, find themselves paralyzed by the rapid spread of the Delta variant and the soaring number of contaminations and deaths.

In Vietnam, the health crisis, which has worsened particularly since mid-July, has forced the authorities to put in place strict measures restriction of movement, particularly in industrial zones in the south around Ho Chi Minh City. After having lived for months without ever spotting more than 10 contaminations per day, the country of 98 million inhabitants now identifies more than 8. new cases daily. And 85% of 1. 306 deaths caused by the virus were recorded during the only

To put down the epidemic, the authorities further extended their control measures to several provinces at the beginning of August, pushing suppliers of the brands Nike, Adidas, Uniqlo and even Gap to close new factories and extend the shutdown of several sites.

Less “living at work” On the spot, many companies also have to give up their strategy of “living at work”. They had pushed their employees to stay, sleep and dine in the factories, in a form of “health bubble”, to avoid contact with the outside world, but dozens of outbreaks of infection still appeared in their teams. “Vietnam is a key player in the textile, clothing and footwear sector with a global market share of 7.7%. These plant closures will therefore have repercussions on a global level, ”recalls Natixis economist Trinh Nguyen. “These are failures in the supply chain that appear when the situation is already very tense”, adds the expert who points to the congestion on the main Asian maritime transport lines.

Brands are particularly concerned about supplying Western markets. If it does not communicate on the current state of its production chain, Nike admits that nearly half of its shoes were produced in Vietnam during the fiscal year 2020 . Adidas is also on the alert with 75 of its 500 suppliers installed in the country .

In early August, the American Apparel and Footwear Association (AAFA), the American industry lobby, called in an open letter to President Joe Biden to come to the aid of the Vietnamese government and industrialists . “I ask you to immediately speed up the distribution of surplus American vaccines to Vietnam and other key partner countries,” wrote Steve Lamar, the lobby’s chairman, recalling that Vietnam is now providing 20% of all U.S. imports of clothing and footwear. Currently, only 4% of the population is fully vaccinated against Covid – 10.

Tension in Bangladesh The brands are looking to redeploy their productions but the process is laborious and the other nations of the zone, specialized in the manufacture of textiles and shoes, are also in difficulty.

Another major player in the sector, Bangladesh has more than 000. 000 positive cases per day, compared to less than 1. 500 he two months ago. With only 2.5% of inhabitants vaccinated, the authorities are tightening the containment rules but have nevertheless yielded to the lobbies and authorized, despite significant health risks, the factories of the export sector to resume work in early August, in an attempt to save a little growth. The country must send this summer the deliveries that will supply stores in the West at the end of the year. In the months of June, July and August alone, the country generates 40% of its annual textile exports.