Even as China continues to maintain its dominance as the world’s largest garment exporter, the fight for the second position has been an interesting one, with Bangladesh fighting it out with its closest competitor Vietnam, for this coveted position with none of the countries having an absolute sway for too long it seems!
If one may remember, it was not so long ago that Vietnam surpassed Bangladesh as the second largest garment exporter globally. According to the data from the World Trade Organization or WTO, in 2020, Vietnam sold US $ 29 billion worth of apparel merchandise to the world while Bangladesh’s garment exports were valued at US $ 28 billion even as Bangladesh’s share in global garment exports slipped to 6.3 per cent in 2020 from that of 6.8 per cent a year earlier. While on the other hand, Vietnam’s share improved to 6.4 per cent from 6.2 per cent even if garment shipments by both the nations, declined in 2020 due to the COVID-19 although Bangladesh’s fall was at a faster pace than that of Vietnam.
“Trade began to recover as of mid-2020, but the effects of COVID-19 have varied significantly across countries and regions. In volume terms, which strip out the effects of fluctuating prices, Asia’s merchandise trade was down by only 0.5 per cent in 2020, compared to the global decline of 5.3 per cent,” underlined WTO Director-General Ngozi Okonjo-Iweala in the report.
As importers began diverting orders from China at the onset of the COVID-19 pandemic early in 2020, the Southeast Asian nation (Vietnam) quickly grabbed the opportunity with strong control on the outbreak in the country even if it reported the first death from Coronavirus on 31 July, 2020 when Bangladesh just began easing restrictions after the first round of its pandemic lockdown.
It may be mentioned here that in 2010, Bangladesh overtook Turkey as the second largest apparel exporter with 4.2 per cent contribution to global garment exports even as India was fourth on the list at that time with 3.9 per cent share of the market while Vietnam had 2.9 per cent.
Last year though, besides the pandemic affecting Vietnam less than it did Bangladesh, the Southeast Asian nation had two more advantages, according to the President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Faruque Hassan, who underlined how Vietnam has been capitalising by producing apparels from non-cotton man-made fibre to strengthen its position while also taking advantage of its preferential trade agreement with the USA, due to historic reasons; a country which is very vital for Bangladesh as well in context to apparel exports.
However, despite Vietnam overtaking Bangladesh, neither the BGMEA President nor others in the industry seemed worried then and, hoped it was just a matter of time before Bangladesh dislodged Vietnam to regain its position as the second largest apparel exporter globally.
“I hope Bangladesh will soon regain its position,” expressed Faruque hopefully even as Vice-President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Fazlee Shamim credited Vietnam for being able to cut down on the lead time with infrastructural development, to make business gains. He underlined, “They have progressed much in diversifying products. And they also have duty-free access to the US market.”
The hope of dislodging Vietnam, as expressed by the industry, does not look without reasons if one takes into account the export performances of both these countries in the first seven months of 2021.
As per the figures of Bangladesh’s Export Promotion Bureau (EPB), Bangladesh’s apparel export value in the January to July period of 2021 stood at US $ 18.79 billion, up 23.91 per cent (Y-o-Y) basis while as per Vietnam’s Ministry of Finance, Vietnam’s apparel export value stood at US $ 18.46 billion (up 13.20 per cent on Y-o-Y basis).
Even though, Vietnam’s Ministry of Finance was yet to release data separately for fabrics and apparels at the time of filing this report, considering that fabrics generally constitute around 6-7 per cent of total textile and garment export of Vietnam, we can say Vietnam’s apparel exports in the Jan-Jul. ’21 period valued around US $ 17.36 billion (up around 13 per cent on Y-o-Y), if we consider that fabric category shared about 6 per cent of total value.
Meanwhile, according to the BGMEA, Bangladesh exported apparel products worth US $ 18.80 billion during the period, against Vietnam’s exports worth US $ 16.86 billion, which helped Bangladesh to regain its position as the second largest apparel exporter by earning US $ 1.94 billion more than Vietnam in the first seven months of this calendar year, underlined the garment makers’ body.
However, it may be mentioned here that in the period under review, both Bangladesh and Vietnam perceived a negative growth of 7.66 per cent and 7.30 per cent respectively, compared to the same period of 2019 even as speaking to the media, BGMEA Director Mohiuddin Rubel reportedly said that as per the official data of Bangladesh Government and the official data of Vietnam, Bangladesh clearly stayed ahead of Vietnam during January-July period of 2021.
“The official export of Vietnam during this period stood at US $ 16.86 billion, while for Bangladesh it was US $ 18.80 billion. So, Bangladesh earned US $ 1.94 billion more than Vietnam by exporting apparel goods,” maintained Rubel even as according to the General Statistics Office (GSO) of Vietnam, the country earned US $ 18.46 billion from textile and garments export during January-July period of 2021, commenting on which the BGMEA Director said that the Vietnamese Government aggregates their textile export with garment while publishing data, so the data they publish is not exclusively apparel export.
“But the WTO calculates the textile and apparel sector separately, and that is logical. We can confidently say that Bangladesh will remain the second largest garment exporting country by the end of 2021,” expressed the Director of the garment makers’ body confidently even as BGMEA Vice-President Shahidullah Azim, maintained: “We expect Bangladesh to export about US $ 4 billion more than Vietnam by the end of this year, as the factories have enough purchase orders. At the beginning of 2021, exports to EU countries were slightly lower but the exports have started to increase in this destination at a significant rate,” he added.
The BGMEA Vice-President further added if Bangladesh can improve its position in the Ease of Doing Business and achieve the desired target in all the parameters associated with it, the country will earn US $ 3-US $ 4 billion more from apparel exports than the set target even as he added that there were various complications still at the port, and complications related to bond facility, and infrastructures while underlining that these types of complications at various points were hindering exports severely.
“Moreover, utilities such as electricity and gas pose various unwanted problems. If all these problems are solved, and if we can improve our Ease of Doing Business ranking, our exports will increase even more than our target,” expressed Shahidullah Azim.
However, it is also to be taken into account that earlier when Bangladesh was grappling with the pandemic and the country was under lockdown, the garment industry in Vietnam has been operating almost unhindered even if now as Bangladesh seems to have got a grip over the pandemic to a great extent even as vaccination of garment workers and general populace have been going on in the right earnest, Vietnam have had to deal with a crippling bout of the pandemic, which almost brought its industries to a standstill.
As per recent reports, from shoes to garments to car parts and coffee, Vietnam’s strict and lengthy Coronavirus lockdown has sparked product shortages among worldwide brands such as Nike and Gap which have grown increasingly dependent on the Southeast Asian nation’s manufacturers — as the Coronavirus tore across the globe, Vietnam was hailed as a bright spot for its rock-bottom caseload and strong economy. Over 15 months, only 3,000 infections and 15 deaths were reported in the country. But during the summer, the delta variant erupted among a population that was almost entirely unvaccinated. Now, the caseload has surged past 766,000 and the death toll is nearing 19,000 —even as the recent surge in COVID-19 cases in Vietnam has forced factories to either close or operate at severely reduced capacity.
Now if Bangladesh would be able to maintains its lead over Vietnam by the end of the year or if it is Vietnam, which would claw back to the coveted position of the second largest apparel exporter globally, remains to be seen. Irrespective of the positions, one has to agree and accept such a healthy competition between Bangladesh and Vietnam only helps the countries concerned to excel, which at the end of the day is beneficial for both in terms of further growth and development!