Lockdown 2.0: Impact of COVID-19 on Indian fashion retail

With major Indian cities, including the capital city–Delhi–and the financial capital–Mumbai–being designated coronavirus “red zones” by the Government depending on the level of infection, the impact of COVID 19 on retailers is far fromeasing out. Though the retail stores were shut in a single, they are definitely not start in one day. Fashion retailers are
anticipant a structured roll-out, but see less hope of business opening in the first week of May.

According to Retailer’s Association of India (RAI), Indian retail industry has more than 15 million traditional and modern retailers. Retail employs ~40 to 50 million people directly of which modern trade employs more than 6 million Indians equalling to almost 12 percent of the total retail consumption of the country.

Retail contributes around 40 percent to India’s consumption and ~10 percent to India’s GDP.

The lockdown implemented by the Government to prevent the spread of COVID 19 to prevent the spread of coronavirus in the country has greatly affected retail business. Most stores, except stores selling essential food and grocery, have been shut across the country.

Non-essential goods such as garments, electronics, mobile phones, furniture, hardware, etc., almost all stores are closed.

About 85 percent of the retail costs are fixed costs, which is putting several financial pressures on retailers. The industry is experiencing severe liquidity challenges, which can lead to large scale unemployment. The cash inflow of the industry has come to a standstill, while the fixed operating costs remain intact.