The second largest apparel exporter globally after China, Bangladesh is making steady progress in fashion retail!
“Bangladesh is known for being one of the top apparel manufacturing countries. This has led the new generation of entrepreneurs to aspire to enter the fashion retail scene, as a lot of them have strong support of family-owned apparel manufacturing units,” holds Shah Rayeed Chowdhury, Director of Evince Retail Limited, in an interview with AR.
Evince Retail Limited is a part of the Evince Group, one of the leading and most diversified independent manufacturing conglomerates in Bangladesh apparel and textile industry, and credited with introducing two very famous brands- Miniso (master franchisee of Japanese designer brand, which boasts of 4000-plus stores globally by the end of 2019) and Noir (an in-house brand of Evince Group).
Noir is a niche premium brand, which aims to present high-quality, high-street fashion while maintaining international standards at reasonable price points and in extremely limited quantities (per style) to maintain the element of exclusivity.
Says Sanjeev Rao, CEO of Being Human Clothing, “Bangladesh has a flourishing economy, which has grown strongly throughout the previous decade. Factors like surging economic activities, increased disposable income, improved living conditions and exposure to international community have led to Bangladeshi customers asking for better products and experience. We see immense potential in the aspiring middle-class population. Adding to this are the millennials and GenNext, who have studied abroad and are now returning to the country to contribute towards the growth of their country.”
Being Human Clothing is amongst the latest from overseas to enter the exciting Bangladesh fashion retail sector.
The brand has forayed into the country through its Bangladesh franchisee – Being Human Bangladesh – which is owned by two dynamic young entrepreneurs, Rehan Rahman and Mohaimin Mostafa, who are also the co-owners of the popular Crimson Cup Bangladesh and several other ventures.
Figures tell it all!
According to Statista (the online platform specialised in market and consumer data and offering statistics and reports, market insights, consumer and company insights), the organised apparel retail market in Bangladesh has been valued at US $ 9.34 billion in 2022 and is slated to grow annually by 4.31 per cent (CAGR 2023-2027).
Though the country is majorly banking on the domestic labels/brands in its burgeoning fashion retail segment, the growing per capita income and consumers’ inclination towards international brands has set up a promising platform for overseas fashion brands and retailers to venture into the country as well, which experts believe will lead to maturing of the industry.
One of the fastest growing globally, Bangladesh’s economy is reportedly the 35th largest in the world in nominal terms and 25th largest by purchasing power parity.
It is also the second-largest economy in South Asia, which in the fiscal year 2021–2022, registered a GDP growth rate of 7.2 per cent after the global Covid-19 pandemic.
That apart, in 2021, Bangladesh surpassed both India and Pakistan in terms of per capita income.
Meanwhile, as per the Boston Consulting Group (BCG), a global management consultancy firm, with an average annual growth of 6.4 per cent between 2016 and 2021, the South Asian nation has outpaced peers such as India, Indonesia, Vietnam, the Philippines and Thailand even as its domestic consumer market is set to become the ninth-largest in the world with a rapidly expanding middle and affluent class, projected to rise substantially (between 2020 and 2025).
“The country could have easily been overshadowed by its neighbour to the northeast — China — or its continental cousin to the West — India — but in this region of economic powerhouses, Bangladesh stands tall,” underlines the BCG.
Domestic and foreign players in mix of things
Adept at catering to the global bigwigs (brands/retailers), Bangladesh garment exporters know too well the inner dynamics of global fashion retail even as they have come to recognise the true potential of the thriving fashion retail sector of Bangladesh lately.
As it would have been, many of them have floated their own brands, launched products that are of international standards, fashionable yet competitively priced, to capitalise on the opportunities on offer.
And the number of such players continues to grow by the day.
Names like YELLOW (from the house of BEXIMCO), Smartex (belongs to Giant Group), Rise (Standard Group), Sailor (Epyllion Group), SaRa (Snowtex Group), Smartex (SM Group), Amber Lifestyle (Amber Group) OCode (from the house of Energypac), Sailor, Klubhaus, Noir, etc., are just cases in points.
YELLOW, in particular, is not only popular within Bangladesh but has managed to transcend the boundaries of the country as well, and with great success.
Meanwhile, launched in 2015, Sailor is another very prominent and stylish lifestyle brand in Bangladesh that owes its origin to the Epyllion Group, a very renowned garment-making entity.
What sets Sailor apart is its distinct aesthetic and wide range of offerings (trendy clothes and accessories), designed for people of all ages.
“I personally feel why local retail and multinational brands will flourish is because of the change in the mindset of the people,” opines Rakibul Islam Khan, Managing Director of Pakiza Knit Composite.
Established in 1982, Pakiza Group has predominantly been a fabric manufacturing giant, which entered into garment production subsequently and eventually took a plunge into fashion retail with Pakiza Attire in 2019.
As the domestic players continue to consolidate their position, overseas companies of the likes of Uniqlo, Decathlon, Being Human, just to name a few, are entering the exciting fashion retail landscape to heat up the competition.
Labels by established and young designers add to market vibrancy
Disrupting a market founded on ready-to-wear and prét fashion labels and brands, many designers are taking a leap of faith by introducing their own labels, especially catering to the often overlooked category of menswear, functional styling and sustainable, ethical fashion.
GUZEL (incepted with a vision to set a standard in modern fashion); Sahar Rahman Couture (projecting itself as a designer label which aims to provide high-end customisation services along with an exclusive boutique experience to its clients); Zurhem (the one-stop solution for today’s picky customers offering from bespoke to ready-to-wear men’s suits, jackets, trousers, polo necks, T-shirts, bandhgalas and sherwanis to women’s evening gowns, cocktail dresses and ready-to-wear workwear and partywear); Studio MM (established by designer and fashion influencer Muddasir Ahmed Anik, Studio MM, is known for its bold prints, modern aesthetics, functional details and quirky colours targeting the youngsters and acts as a one-stop fashion studio solution for all fashion needs); ROZEN ( founded by Saiyara Roja Islam in 2019 with a goal to make available to customers, products and styles that are not easily accessible in Bangladesh, and aims at re-establishing norms of fashion while keeping the entire process ethical and the products sustainable) are a few such examples.
“At LoveGen, we are persistently working towards breaking the barriers to entry through an unconventional strategy that would challenge the status quo of fashion in Bangladesh,” says Ghulam Sumdany Don, Managing Director of LoveGen Bangladesh, a fast fashion brand designed in Spain and manufactured in Bangladesh, which primarily targets today’s youth who want to live on their own terms and invest in stylish clothing.
E-commerce: A double-edged weapon for fashion retailers?
According to recent market research, the business-to-customer e-commerce market in Bangladesh is expected to grow by 17.61 per cent on an annual basis, standing at about Taka 56,870 crore in terms of market size and expected to reach around Taka 1.5 lakh crore by 2026.
This has proved to be a great accelerating factor for fashion retail in Bangladesh.
However, despite the massive potential, e-commerce has hit a roadblock early on in face of the alleged malpractices by some of the players, so much so that it compelled the Government to intervene to clean up the act.
“Despite the rising popularity, the scams that had hit the sector in the recent past have impacted the online business as customers are apprehensive of buying online,” opines Zainab Maqsood, who established one of the most happening brands in Bangladesh currently, named AMIRÁ.
In 2018, the Government published a digital commerce policy as a guideline for e-commerce websites and to ensure consumer rights even as in June 2021, the Bangladesh Bank introduced the payment gateway ‘escrow service’ to ensure customer rights and stop fraudulent activities.
“Our fashion e-commerce industry has just come into the limelight. It is still not mature enough. Around 60 per cent of the market is captured by the unstructured business entities even if the Covid-19 pandemic has proved that e-commerce/digital selling platform is the only way to keep fashion business growth sustainable,” observes Shoriful Islam, Assistant General Manager (Head), Marketing & Home Delivery Service at Grameen UNIQLO, who further adds a survey carried out in this regard found, before the pandemic, online apparel clothing sales consumed 6 per cent of total sales, while in post-pandemic, the number grew to almost 10 per cent.
Had it not been for the so-called malpractices, experts hold e-commerce could have proved to be a game changer for the fashion retailers, who are yet to spread their wings beyond Dhaka and Chittagong, in terms of reaching out to the potential customers in other parts of the country.
“Online shopping is gaining popularity across the world and it is but natural the sector will also flourish in Bangladesh in the years to come,” in the meanwhile opines the Executive Director of the Policy Research Institute of Bangladesh (PRI) Ahsan H Mansur, who felt the fragile consumer confidence on account of the alleged malpractices can prove to be a major challenge nonetheless.
Policy Research Institute of Bangladesh (PRI) is a private, non-profit and nonpartisan research organisation dedicated to promoting greater understanding of the Bangladesh economy, its key policy challenges, domestically and in a rapidly integrating global marketplace.
Mall culture missing in the equation!
Globalisation and shopping mall culture are the important characters of the post-modern era.
In the Indian sub-continent, shopping is just not an activity but an experience to savour. It is the strong emergence of malls which made shopping, watching movies, playing games, catching up with friends and acquaintances over some coffee possible in one place.
Rightly so, the contribution of malls behind giving a boost to fashion retail, especially in countries like India, cannot be ignored.
Even though the strong emergence of e-commerce managed to somewhat take the sheen of the thriving mall culture, it still continues to play a very important role in shaping up the fashion retail industry.
But when it comes to Bangladesh, despite the presence of some decent malls of the likes of Jamuna Future Park, Bashundhara City, Mouchak Market, New Market, Rajlaxmi Complex, etc., especially in Dhaka, many brands still prefer standalone stores.
And there seem to be good reasons for it.
“We have 15 outlets of restaurants, so we know how important it is to select the right location. In Bangladesh, we have a ‘building culture’ where a lot of shops are established. There are a couple of malls as well, however, Being Human would not get an exclusive space in this format of real estate. Therefore, we wanted an independent location with parking facility, so we kept the store away from main road in the market-friendly area like Banani,” opines Rehan Rahman while Shehryar Burney, Executive Director of YELLOW on his part says, “The biggest challenge continues to be that of high-potential retail locations. Bangladesh is a country with a very high population density where land is used for residential purposes mostly, leaving very little space for malls and high-street retail. There is also a lot of competition for high-quality retail real estate and it tends to be very expensive.”
Other challenges remain too!
“Compared to other Asian countries, retail is not yet an established segment in Bangladesh,” rues Faheem Mosharraf, the CEO of Rise even as Sandeep Golam, the Director Operations Rookies, Bangladesh on his part adds, “A large part of retail sector is still unorganised and this section is moving slower than one would like towards becoming more organised and streamlined.”
As an international brand, Rookies Jeans believes in cross-border presence in growing markets, which is why Bangladesh has been the first country where it established its presence.
Then there are issues pertaining to supply chain and logistics.
“Most of the logistics companies lack digitalisation in their service when it comes to tracking the product, from packaging to delivery,” explains Shoriful Islam of Grameen UNIQLO, who feels the backend support system needs to be strengthened further for better customer service and increased brand value.
Notwithstanding the bottlenecks, stakeholders are, however, unanimous when they maintain after manufacturing, retail is the next big thing for Bangladesh and, it is here to stay!