Known hitherto for basic products predominantly, Bangladesh garment industry is fast moving up the value chain and lingerie is one such product category, which seems to have caught the fancy of many.
And there are reasons for it.
As per Statista, the global lingerie retail market was valued at approximately US $ 42 billion in 2020, and is forecast to reach a value of US $ 78.66 billion by 2027.
Given the opportunities on offer, garment makers are more than game to try their hands out in this promising product category even as established names are ramping up production capacities as they look to increase their share in the global market.
“If we can get hold of a portion of the global lingerie market, our exports will go up by at least several billion US dollars,” claims BGMEA Vice-President Shahidullah Azim, whose assertion is strongly backed by Akib Rahman, the Director of HAMS Group and Roshan Withanage, Managing Director of C J INTERNATIONAL LTD., who opined Bangladesh has a lot of potential to exploit the opportunities in the ever-growing global lingerie market.
Starting operations in Bangladesh in 2006, CJ International is a Swedish buying house whose Bangladesh operations (CJ International – Bangladesh) is headed by Roshan Withanage as the Managing Director.
Efforts on by garment makers to expand and excel
“Bangladesh as a player in the lingerie segment has a golden opportunity. Since the inception of the industry, it has predominantly been exporting basic products like shirts and T-shirts. In contrast, value-added apparel manufacturing has not flourished as expected. And without high-end apparel, garment makers cannot command better prices. Lingerie can thus be an apt window of opportunity,” underlines Akib speaking to Apparel Resources (AR).
Akib is not alone in thinking so; his opinion has been echoed by many in the industry.
“The margins for intimate apparel average 20 per cent to 25 per cent, compared to 10 per cent for T-shirts,” opines Mahbubur Rahman Russell, Chief Operating Officer at KC Lingerie, reinforcing the popular sentiment amongst those keen to move out of their comfort zone and try their hands in intimatewear to effectively deal with the shrinking profit margins in regular products.
KC Lingerie reportedly has capacity to produce 3.1 million pieces of lingerie items per month from its 57 sewing lines and caters to brands like H&M, COS, Okaidi, Auchan, etc., even if catering predominantly to the buyers from USA and Europe, HAMS Group’s 30-line lingerie unit, Victoria Intimate Ltd., established in 2019, manufactures a host of intimatewear including ladies’ panties (FOB price between US $ 1.2-US $ 1.5), soft bras (FOB price US $ 2 and above), men’s boxers (FOB price between US $ 1.62- US $ 1.9) and men’s briefs (FOB price between US $ 1.62 – US $1.8).
It is the strong desire to move up the value chain to attain long-term business sustainability, which led HAMS to get into the lingerie space.
This move of theirs seems to be auguring well for the company!
“Bangladesh as a player in the lingerie segment has a golden opportunity. Since the inception of the industry, it has predominantly been exporting basic products like shirts and T-shirts. In contrast, value-added apparel manufacturing has not flourished as expected. And without, high-end apparels, garment makers cannot command better prices. Lingerie can thus be an apt window of opportunity.”
“We are gradually expanding our capacities as more demands are coming in from the buyers,” Akib underlines.
The lingerie market is a bit different from regular garments as intimatewear has a limited usage period vis-a-vis other products, beyond which a customer has to change his/her undergarment; so, the demand for lingerie is constant and on the rise, observes Tihan Mahdeen, COO of Mahdeen Group.
A renowned name in the realm of sweater making, Mahdeen Group got into lingerie making led again by the urge to diversify product offerings and is today considered a major name in lingerie manufacturing in Bangladesh.
“When we started lingerie, there were a very few manufacturers,” says Tihan speaking to AR.
Today, Mahdeen is capable of manufacturing almost all types of intimatewear/lingerie and swimwear products except the seamless ones and boasts of in-house moulding capacity as its inherent strength in bra making.
Currently, Mahdeen runs 42 lines for its dedicated lingerie unit named Intimate Attire Limited, which it plans to increase to 62 lines by the end of next year given the pent-up demand as well as positive response from the buyers.
It’s just not Mahdeen and HAMS that are expanding their production capacity.
Not very long ago, Chorka Textile Ltd. (CTL), a sister concern of the Pran-RFL conglomerate and a major name in lingerie in Bangladesh, was planning to kick-start full-fledged double-shift production at its existing unit to meet the growing demand for knitwear, especially lingerie.
In fiscal 2020-21, the company exported lingerie worth US $ 90 million from its Narsingdi-based garment factory even if since its inception in 2013, CTL is said to have invested around US $ 70 million to enhance capacities.
Ananta Apparels is yet another name in this direction, which has invested in enhancing capacities after it pumped in a massive Taka 250 crore to establish a sophisticated lingerie factory in the port city of Chittagong.
“Although many factories are coming up, there are huge deficiencies in the supply chain. The lack of bra foam cup suppliers, availability of micro fabrics, and some fancy laces are amongst the major bottlenecks..”
Not to leave it at that, Ananta was said to be planning to add 20 new production lines in the unit.
What’s more, to provide the manufacturing unit with sufficient raw material support (accessories and fabric play a very important role in adding value), Ananta Apparels has been planning to come up with a synthetic fabric plant at the Mirsarai Economic Zone at an investment of Taka 400 crore.
Managing Director of Ananta Apparels, Sharif Zahir attributed the planned production capacity expansion to growing demand for lingerie even as Ahsan Khan Chowdhury, the Chairman and Chief Executive Officer (CEO) of Pran-RFL Group, on his part reiterated once more Bangladesh’s remarkable potential to grab bigger share in global intimatewear market.
Figures and market dynamics in perspective
According to the data analysed by Team AR from various sources, Bangladesh exported lingerie worth US $ 1.8 billion (approx.) in FY ’22 with USA dominating as the leading export destination accounting for around 40 per cent of Bangladesh’s total lingerie shipments followed closely on the heels by the European Union (EU) even if as per the Office of Textiles and Apparel (OTEXA), Bangladesh’s lingerie and shapewear exports to the US grew by 14.31 per cent in January 2022 alone.
Expected to reach US $ 78.66 billion in 2027, the global lingerie market is segmented based on regional analysis into five major regions- North America, Latin America, Europe, Asia- Pacific, the Middle East and Africa.
Of these, Asia-Pacific is said to have held the largest market share in 2020, in terms of revenue.
One must also admit only a few product categories have seen such significant shifts over time as lingerie, the growth of which was further accelerated by the so-called comfort dressing movement even if consumer demand for inclusivity in sizes and shades only added new dimensions to the growth of lingerie in the global perspective.
Growth drivers and challenges
Growing millennial population, increased purchasing power amongst women and rising awareness about the best fit, are some of the factors that would determine the growth of lingerie as a product category in the global market, say experts, who further underline the global market is also guided by the growing availability of a wide range of products in different designs for various purposes such as sports, bridalwear and everydaywear.
Further, the trend of comfortability, which has been gaining currency strongly for last many years, only continues to gather steam as lingerie styles have evolved centring around it while the Covid-19 pandemic added another aspect as millions of women started working from home and despite things returning to normalcy now, demand for comfort is said to be going strong.
Experts are also of the opinion that to trade in this space (lingerie) successfully, retailers need to champion sustainability and diversity. And as it would have been, brands and retailers are investing significantly on sustainable products like recycled bra and so on.
Yet, another factor driving the demand is increasing concern about the use of versatile fabric in lingerie. The use of fabrics such as nylon, polyester, satin, lace, sheer, lycra, silk and cotton is growing demand for the commodity while designers are emphasising lace, embroidery, luxurious fabrics and lighter hues, which is expected to boost the demand more, they say.
“Affordable labour market is a big advantage as it helps to keep the price points low especially when the shipping costs have skyrocketed and input costs are also on the rise.”
In terms of diversity, the popular opinion is that it’s paramount for retailers to embed diversity in all aspects of their business and not just as a box-ticking exercise even if in terms of body diversity, big brands have made greater effort to be more inclusive of fringe sizes such as 2XS, 2XL and 3XL although core sizes XS-XL remain the most catered-to, while men’s plus size underwear remains a relatively untapped space, underlined the pundits.
On the flip side, changing fashion trends, as well as a constant change in customer tastes and expectations have resulted in increasing prices for the lingerie market over time, resulting in rising production costs for the market, which’s having a negative effect on the global lingerie industry, say some.
Is it advantage Bangladesh in lingerie?
Even though China continues to still dominate the global lingerie market, lingerie business is slowly but surely shifting from China for a host of reasons which gives Bangladesh a leg up, says Akib, who observes that as the number of lingerie manufacturers increases in the country (Bangladesh), it will only boost the confidence of foreign buyers to procure more innerwear from Bangladesh.
Also, adding a new dimension in this regard is the ongoing trade war between China and USA, thanks to which, even many Chinese players are also looking at Bangladesh to invest as they plan to capitalise on Bangladesh’s inherent strength of cheap labour.
“Affordable labour market is a big advantage as it helps to keep the price points low especially when the shipping costs have skyrocketed and input costs are also on the rise,” explains Roshan about the lure of Bangladesh for overseas players that want to invest in lingerie making.
It may be mentioned here that Kaixi Fashion Bangladesh Co Ltd., a Chinese textile company has already announced investment of US $ 6 million for a new unit at Dhaka Export Processing Zone, which will produce around 24 million pieces of ladies’ intimatewear annually.
Kaixi’s new unit is expected to generate employment for 2,000 Bangladeshi citizens.
Established in 1995, Kaixi Fashion owns three subsidiaries (Shenzhen Kaixi Fashion Co., Ltd, Shantou Kaixi Lingerie Industrial Co.Ltd, and Myanmar Kaixi Lingerie Industrial Co., Ltd.).
They produce, distribute and sell products ranging from traditional knitting lingerie bra, panties, to ‘invisible’ bra pads and straps and export majority of the products to UK, France, Spain, Germany, Australia and Chile.
Notwithstanding various advantages, Bangladesh also has its own share of challenges when it comes to lingerie making.
“Although many factories are coming up, there are huge deficiencies in the supply chain. The lack of bra foam cup suppliers, availability of micro fabrics, and some fancy laces are amongst the major bottlenecks,” complains Tihan.
Then there are issues in terms of trained manpower, considered a must for lingerie manufacturing!
A critical product category as it is, lingerie calls for well-trained hands, which seems to be in short supply in Bangladesh currently.
“Bangladesh in general is still somewhat lacking in terms of value addition,” meanwhile claimed General Manager of SQ Group, Shahriat Hossain to AR earlier even as he added when it comes to value addition, which is a must for long-term sustainability, a lot depends on the proficiency and skill-set of the workers.
SQ Group is a leading garment manufacturer from Bangladesh and a renowned name in intimatewear, catering to a host of global clientele including Marks & Spencer, being a dedicated supplier to the British multinational retailer.
The dedicated lingerie facility of SQ Group, SQ Birichina Ltd., is built on a 128,000 sq. ft. area and had initial assembly capacity of 46 modules. However, to augment the style elasticity and cost competence, the company has invested greatly on capacity expansion and built additional 97,000 sq. ft. while extending the capacity to 110 modules from June 2014.
Not to be bogged down by lack of trained manpower, many in the industry have started operating in-house training facilities to address the situation.
“Lingerie manufacturing is an art. You need a mixture of highly-skilled operators along with a sound technical team,” says Akib, who runs an in-house training centre where HAMS select and train operators until they reach a standard efficiency level before being put into the production lines.
Mahdeen has also hired some training specialists and technical persons to deal with the existing scenario.
“Our Industrial Engineer conducts research and grades operators in accordance like A+, A, and so on and as per the ratings, we arrange their training on lingerie production,” elucidates Tihan, who is implementing 5S, Kaizen and Kanban in pursuit of smooth operations and manufacturing competence while HAMS banks on its expert production team to deliver optimum result and increase efficiencies.
Despite such efforts, some buyers still prefer to source lingerie from China like CJ International.
“We currently do not source lingerie/intimatewear from Bangladesh as it is difficult to procure smaller quantities especially for AOP (all over prints) which gives a better hand feel over the other print categories and is easily available in China,” claims Roshan, who called for investment from the Government and the private players in terms of R&D and technical trainings to address the manpower crisis even as he urged building in necessary flexibilities to successfully cater to the smaller orders.
However, given the momentum innerwear has gained lately — at least 50 apparel entrepreneurs in Bangladesh have either set up new lingerie units or shifted to making such women’s clothing in the hope of gaining a strong foothold in the global lingerie market — it would not be wrong to maintain lingerie is now the chosen product category for many, who see in intimatewear the future growth path.