Many clothing and shoe shops are expected to shut down in the upcoming period due to ‘the unprecedented lack of demand as well as the unfair competition’ markets are witnessing nowadays, an official in the commerce sector warned.
Asaad Qawasmi, a representative of the clothes, garment and jewellery sector at the Jordan Chamber of Commerce (JCC), told The Jordan Times on Sunday that based on a request from the Ministry of Trade, Industry and Supply, the chamber had sent a document containing the challenges facing the sector as well as proposed solutions that could mitigate the burdens weighing the sector down.
Recently, the JCC held meetings with officials at the ministry to discuss these challenges, Qawasmi said, noting that there will be a meeting soon with the Industry, Trade and Supply Minister on the matter.
The challenges facing the sector include illegal e-commerce and ‘mail package’ trade that abuses regulations that allow entry of personal goods with exemption from customs fees, Qawasmi said, noting that these two main challenges have weakened the market and the purchase capability with unfair competition in regards to costs, fees and clashes with consumers.
Qawasmi told The Jordan Times in mid-July that Prime Ministry regulations allow anyone with a passport and a national identification number to order up to five packages totalling JD200 a month, which enter the Kingdom exempt from customs.
However, some people abuse these regulations and use friends’ passports to order goods without having to pay extra customs or taxes, and then sell these goods at low prices, Qawasmi claimed, adding that this is an illegal form of trade known as ‘mail package’ trade.
Therefore, Qawasmi urged the government to expedite the process of establishing certain conditions and regulations for mail packages that enter the Kingdom as well as e-commerce, which allow people to have virtual shops without having to pay operational costs, taxes and other fees and costs as a committed trader would, damaging those adhering to the laws and working properly.
Another challenge Qawasmi highlighted is the spread of haphazard markets and random licences that caused an overflow of shopping malls in areas that are very close to each other.
Therefore, he called for studying commercial locations and putting mechanisms in place that regulate which spaces can be used commercially.
Other challenges include the customs fees and taxes imposed on the sector, which reach 47 per cent, causing the Kingdom to lose its competitive edge in the region regarding shopping tourism, Qawasmi said.
‘The government is working hard to address the matter and we need to speed up the discussion and implementation of solutions before many shops start shutting down as even during holidays the demand has become very low compared to previous years,’ he concluded.
President of the Textile and Readymade Clothes Syndicate Muneer Deyeh told The Jordan Times last week that clothing sales during Eid Al Adha went down by 50 per cent compared to the same period in 2018.
At the time, he said the figures were ‘shocking’ even in regards to the challenges that the sector has faced over the past few years, especially the very low demand during June and July this year.