At a time when overall apparel exports went through a turmoil situation in 2020, Bangladesh beat its competitors in the US market and became the largest denim exporter to the country.
Bangladesh is also the number one denim products supplier to the European Union, which imported over 65% of the clothing products of Bangladesh.
According to the US Office of Textiles and Apparel (OTEXA), exporting denim products to the US market Bangladesh earned $561 million in 2020, down by nearly 4%, which was $585 million in 2019.
However, Bangladesh’s market share in US denim products rose to 20.03% in 2020 taking the first position from Mexico. Mexico holds the second position with a 16.74% market share followed by China 11.85%.
In 2019, Bangladesh’s market share was 15.7% and she held the third position in terms of exports value of denim products, while Mexico’s share was 21.50% and the largest exporter followed by China’s 18.64%.
In the last five years, Bangladesh recorded a 7.18 percentage point gain to 20.03% from 12.85% in 2016.
In 2020, Mexico’s denim exports to US markets declined by 41.54% to $469 million, while China’s denim shipment plunged by 52.29% to $332 million. Vietnam recorded the lowest fall by 1% to $368 million.
Bangladesh holds a 29% market share of total EU denim markets as of 2020.
According to statistics from the Directorate-General of the European Commission, Eurostat, Bangladesh has earned over €1 billion from exporting denim products to EU countries during the January-December period of 2020, which was €1.27 billion in the previous year.
Turkey is the second-largest exporter of denim products to the EU market, which earned $940 million in 2020.
A strong backward linkage industry especially in fabrics manufacturing and washing played a key role in becoming the export leader of denim products as said by the industry people.
On the other hand, exporters invested a lot in research and innovation, product development and technological upgradation, which paved the way to this end.
Meanwhile, branding of Bangladeshi denim products through expositions also helped to draw the attention of global buyers to purchase from here.
“In the last few years, Bangladesh witnessed a huge amount of investment in denim fabrics manufacturing, which increased the country’s production capacity to reduce import dependency for fabrics,” said Sayeed Ahmad Chowdhury, director of Square Denim.
As the denim manufacturers now can purchase denim fabrics from local sources easily, the lead time to ship products came down compared to previous years. This helped a lot to manufacturers to attract more buyers, which also is an opportunity for us to grab more market share in export destinations, he said.
According to industry people, in the last couple of years, Bangladesh’s capacity to meet the demands of denim fabrics rose to nearly 50% from 30% a few years ago.
According to Bangladesh Textile Mills Association (BTMA), 32 mills produce denim fabrics for export-oriented denim product manufacturers.
On the other hand, we were able to start production after the lockdown earlier than Mexico. Mexico lost the market and we gained from their losses but it is not an ideal situation to compare, Sayeed explained.
Also, the US-China trade conflict and relocation of Chinese investment helped Bangladesh in grabbing more market share.
“US policy on banning procurement of cotton and even raw materials from China’s Xinjiang region was a blessing for Bangladesh. Since we are strong in denim manufacturing, buyers moved here and placed more orders,” Sharif Zahir, Managing Director, Ananta Denim Technology Ltd told Textile Today.
Besides, trade conflict and the then uncertainty caused by the Trump administration also dictated buyers to relocate the business, he added.
However, the prices of goods are a big concern for the exporters as the prices of the raw materials went up sharply but the buyers are not adjusting it, said Sharif.
On top of that, research and innovation and proportion of Bangladeshi products and capacity through exposition played an important role in expanding export earnings.
“In attracting buyers’ attention and presenting your products to global consumers, you need to promote through exhibitions. For the last few years, I did it through several expos focusing only on denim products,” Mostafiz Uddin, founder of Bangladesh Denim Expo, told Textile Today.
“The expositions exhibited the latest trend of products and brought global experts who shared knowledge with the local manufacturers. Today’s success is a result of our nurturing of the last six years.”
In addition, as a manufacturer, we have spent a lot to innovate and develop new products. While washing technology developed in the country helping manufacturers to produce value-added items, said Mostafiz, also managing director of Denim Expert Limited, a Denim manufacturer.
In retaining the present trend, we have to continue our present promotion and research and innovation, where the government and sector leader come forward, he added.
Talking on the denim sector, BGMEA former senior vice president Faruque Hassan said: “It’s a result of our relentless and collaborative efforts. Bangladesh already established the number one sourcing designation and we have to retain it to take it at a sustained level.”
As a business leader, in the days to come, my focus would be promoting the sector by paving ways for high-valued products. To this end, knowledge-based solutions to be brought, he added.