Standing second in apparel export to the global market, Bangladesh’s apparel industry is still flourishing on the export of five apparel items. While these items have popularised Bangladesh as a sourcing destination, product diversification is vital for sustainability.
According to data from Export Promotion Bureau, over 73 per cent of the total apparel export of Bangladesh comes from the manufacturing of shirts, t-shirts, trousers, jackets, and sweaters. The remaining 25 or more types of apparel items that Bangladesh produces, take up the remaining 27 per cent of the industry that is currently worth over US $ 30 billion.
In fiscal 2017-18, Bangladesh earned US $ 30.6 billion from apparel export. Among them, knitwear exports fetched a total of US $ 15.18 billion and woven exports fetched US $ 15.42 billion. Data shows, among these, the five categories of items – shirts, t-shirts, trousers, jackets and sweaters alone fetched over US $ 22 billion.
Majority of the money was brought in by the segment of trousers at US $ 6.38 billion. This was followed by t-shirts – a segment where Bangladesh stands at the top with over 18 per cent market share, remaining ahead of China – with US $ 6.29 billion, jackets at US $ 3.9 billion, sweaters at US $ 3.6 billion, and shirts at over US $ 2 billion.
It is to be noted that the first and foremost barrier towards product diversification is Bangladesh’s choice of fibre. The country is more than 80 per cent reliant on the use of cotton for production of apparel. Coupled with reputation and popularity in producing apparel with cotton yarn, Bangladesh finds little to venture elsewhere. However, now, there are few factories coming up with investment in man-made fibre.
Mohammed Nasir, Vice President (Finance) of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Apparel Resources that the reliance on such a limited array of products is very risky for sustainable business. He said, it is imperative that Bangladesh must come away from dependency on these five items and explore other options. But, limitations are, entrepreneurs are wary about the concept of exploring.
“It is true that the business entrepreneurs still prefer investing in traditional garment factories – which produce these five items. The one very big advantage it has is that there is a large labour pool who are experts in producing them. But for anything new, you would have to create a base of labour force, you need to train them. This becomes a very big challenge for the entrepreneurs,” he said.
He added, despite such adversities, Bangladesh is moving forward and exploring into new product options like suits, blazers, lingerie, swimwear and other types of apparel products. “We have to work with more diversified products. On the ground, we are working with the development of new and diversified products,” he said. “The government is arranging incentives for entrepreneurs who are developing diversified products.”
It is true that Bangladesh is moving ahead with production of alternative product segments – the best of them being suits, blazers, and linergie. In the suits and blazers segment, now, there are about six companies exporting about US $ 200 million in men’s suits and blazers alone. And coupled with women’s formal attire, the total export value from Bangladesh is somewhere around US $ 400 million and growing, industry insiders say. Lingerie currently rakes in well over US $ 700 million annually now, what was well below US $ 100 million five years ago. According to latest data from the Export Promotion Bureau, items of women’s or girls’ panties and similar articles, knitted or crocheted, fetched over US $ 676 million from July-May 2018.
Brig Gen Aftab Uddin Ahmed, Chief Executive Officer (CEO) of Centre of Excellence for Bangladesh Apparel Industry (CEBAI), a research and development institution focusing on the apparel industry, particularly stressing on diversity, tells Apparel Resources that Bangladesh is risking sustainable business by making traditional products. “Bangladesh must pursue higher-end products for sustainable business.”
According to him, the major barrier towards ‘going non-traditional’ is the available labour force. His recommendation is, the entrepreneurs must venture into producing diverse products and the Government must arrange a centralised and systematic training for the garment industry workers to reap the benefit of business opportunities.
Nazneen Ahmed, Senior Research Fellow of state-run think tank Bangladesh Institute of Development Studies (BIDS), has reportedly said that Bangladesh must not overlook the traditional items, for which Bangladesh has achieved expertise and markets, while looking to diversify apparel produce. However, she underlined that diversification is vital.
DIVERSIFIED MARKET IS ESSENTIAL TOO
A common understanding among industry stakeholders is that the supply side is largely driven by the demand. This effectively means that Bangladesh will venture into diversifying its apparel products and ‘go non-traditional’ if there is a demand from the buyers. This would mean that Bangladesh would need to look for fresh markets.
According to export data and industry stakeholders, an overwhelming over 84 per cent of overseas apparel export of Bangladesh-made garment products was within three major destinations – the European Union, United States, and Canada. These markets are happy to source the traditional woven and knitted apparel items from Bangladesh.
BGMEA Vice President Mohammed Nasir says market diversification is equally important for Bangladesh to go for product diversification. “We need both market diversification and product diversification. Our garments business will only become sustainable when we can shift our dependency on a small array of products and markets.”
It is true that the emerging market of Japan has got the apparel manufacturers focusing on quality commitment. Japan, a country that demands high-end apparel products, registered a very impressive 13 per cent gain on importing apparel from Bangladesh – what was worth US $ 845 million in the fiscal 2017-18.
The rising opportunity has driven manufacturers to pursue quality in products, which will ultimately lead to production of high-end products – bringing the desired product diversification. More markets like Japan will surely encourage the export of non-traditional products.