European Union’s EU4Business Initiative Helps Armenian Fashion Industry Overcome COVID-19 Challenges

ArmInfo.Since the Soviet times Armenia was noted for its textile industry. Armenia's second largest city - Gyumri, home to a big textile factory - had a whole district called "Textile".

These days, fashion, with its major potential, is becoming a force of its own along with the textile industry. The EU-funded Eastern Partnership: Ready to Trade EU4Business initiative supports the development and exports of local companies. The project is implemented by the International Trade Centre.

"Armenia has always stood out for its quality clothes and footwear. Manufacturers in Armenia have significant competitive capacity both in the local and international markets. To realise this potential they need an efficient business plan and a marketing strategy," notes Anoush Gasparian, Co-founder and Commercial Director of a famous Russia-based Fashion Consulting Group, Consultant for the International Trade Centre and the European Bank for Reconstruction and Development (EBRD). Anoush has over 20 years of experience in fashion marketing.

Within the frames of the Eastern Partnership: Ready to Trade EU4Business initiative Anoush has provided one-to-one and group consultations to over 20 SMEs looking to improve competitiveness and access international markets. The seminar was organised by the International Trade Centre (ITC) and the United Nations Industrial Development Organization (UNIDO).

"52% of local products are exported to the Eurasian Economic Union, 45%- to Europe and 3%-to other markets. Drawing on its vast experience, UNIDO chose topics aimed to provide local companies with deep insights into market specifics and tailor their resources to improve exports," UNIDO National Project Coordinator Araksya Grigoryan says. Since 2014 UNIDO Project "Improving Competitiveness of Export-Oriented Industries in Armenia through Modernization and Market Access" helps Armenia promote production and exports of clothing and footwear.

In the course of the six-day seminar the international expert deconstructed a number of issues - price segmentation, effective use of communication and promotion channels, as well as exports and economic challenges in times of the COVID-19 pandemic. Anoush provided participants with valuable roadmaps to tackle problems their businesses face and helped identify competitive advantages to capitalise on. The event brought together over 40 participants, among them - heads of companies, sales and marketing specialists and designers from 23 SMEs.

"To succeed, every company should learn to play by the rules of a specific market. This means having a clear idea of one's own position in the sector, as well as ability to target potential clients or consumers and implement an effective pricing strategy. It is also increasingly important to build a brand awareness and implement aggressive marketing strategies if necessary," the expert notes.

To the companies looking to export their products Anoush recommends careful research of the export market and their potential competitors.

"Many local companies consider Russia as a primary export market. They should realise that Russia comes second after the UK in terms of diversity of brands, so it’s important to offer competitive products," says Anoush.

The flexibility of a marketing strategy is key for every sector, and the fashion industry is no exception. It is one of the industries in the world that has been most affected by COVID-19 crisis. According to Fashion Consulting Group, the average market value of fashion companies dropped by 40% in January-April 2020. Sberbank reports 90% loss of income by trade centres in Russia.

COVID-19 upset the plans of both international and local companies, causing suspension of many orders. The 2020 crisis showed that companies that applied both offline and online communication tools were better able to weather the storm through the use of augmented and virtual reality (AR, VR), automated tools for customer service, gamification, and influencer marketing. A survey by Collective Bias revealed that 30% of customers focus on products advertised by bloggers rather than industry leaders.

"As recommended by Anoush, we are switching to online platforms and large-scale trade shows. With the support of the UNIDO project, we are getting ready for an online expo," administrator at Texas LLC Anna Muradyan says.

The RA State Revenue Committee reports exports of more than USD 214 million in clothes and footwear in 2018 and more than USD 167 million in 2019.

Since 2017 the Eastern Partnership: Ready to Trade EU4Business initiative has been providing customised solutions to the local SMEs by helping them produce value-added goods in line with international market standards and linking them with buyers from global value chains and markets, in particular within the EU.

This publication was produced with the financial support of the European Union. Its contents are the sole responsibility of the International Trade Centre and do not necessarily reflect the views ofthe European Union.