Digitalization and its Impacts on Labour in Garment Industry: A Case Study of H&M

Abstract

In recent times, digitalization has become an integral part of our lives, impacting every aspect of our daily tasks, including the textile industry. Over the past decade, the incorporation of digitalization in the textile industry has transformed the entire dynamics of the Global Value Chain. This transformation has impacted all stages, from production to final sales, as technology continues to revolutionize the sector. While digitalization was gradually gaining momentum in developing nations like India, the process was hastened during and after the COVID-19 pandemic, when lockdowns were implemented globally, and consumer preferences shifted to online platforms. People had no choice but to shop online and even the people unfamiliar with the internet and skeptical of shopping online came onboard. Even after the lockdown was lifted consumers preferred shopping online because of two aspects i.e., convenience and heavy discounts. One of the major drawbacks of shifting online for fashion brands is the constant pressure of giving out huge discounts and sales, frequent returns and closure of offline stores and loss of jobs for in-store employees. This has impacted profit margins, leading to losses for the brands. To overcome these losses, brands are expanding their production units in developing nations where labour is cheap, and labour protection laws are inadequate. Unfortunately, despite promises of living wages, workers in these countries often receive minimum wage or lower, which impacts their livelihoods. To sustain their basic needs, most workers have to work overtime (14-16 hours), leading to potential exploitation and poor working conditions. It is crucial to implement labor welfare programs to ensure digitalization works in favor of both the textile industry and its workers. This thesis will take up the case study of leading fast-fashion brand H&M to understand the same.