We have to agree that this is a very tough time for all of us globally because of the pandemic. The business of every sector reached the bottom because of the fallouts of the COVID-19. The garment supply chain has also been disrupted and every day the downtrend of the apparel business has been becoming headlines in global media over the last one and half years.
The business will not grow now as it was in normal time. However, we will have to mind that those risks can also bring opportunities for the business.
However, we will have to look into the opportunities. In such a critical time, in two ways the apparel business can be benefited. For instance, exploring new markets with existing older ones and exploring new products are very important for this tough time.
For instance, some of the strong new export destinations might be in the Asian region and Australia as the economies of the Asian countries are relatively performing stronger than the traditional markets like Europe, USA and Canadian ones.
Of the total garment export, more than 64 percent are destined to Europe, 23 percent in the USA and nearly 7 percent to Canada in a year from Bangladesh. However, over the years, some Asian nations like Japan, India and China have been becoming major export destinations for Bangladesh because of the robustness of the economies of those countries.
In FY2008-09, the share of non-traditional markets in our export was 6.87 percent with the export value of US$ 848.87 million, which has reached 17.10 percent with a value of US$ 4.9 billion in FY 2019- 20.
Government’s 4 percent incentive for emerging markets has also played a vital role in higher shipment to emerging markets. Exploring new markets Usually, Bangladesh considers, Europe, the USA and Canada as traditional markets and the rest of the destinations are considered as non-traditional or emerging countries.
Of all the emerging countries, India, China and Japan have been showing very prospectus for garment shipments for Bangladesh because of the resilience of the economies of those countries. Even during the crisis time of COVID-19, those export destinations have been showing promises.
For instance, Japan is the first country among the Asian nations where the garment shipment from Bangladesh reached more than $1billion mark and also export of garment items to India is nearly $1billion mark now.
It is expected that garment export from Bangladesh to China, the largest supplier of apparel globally, has been showing very promising due to good demand for Bangladeshi-made garment items.
Bangladesh needs to expand the production capacity in the mills and factories to grab the shifted work orders from China. A lot of work orders are shifting from China because of the China-US tariff war and higher cost of production in China.
The export of Bangladeshi-made garment items to three Asian markets has been increasing mainly due to rising middleincome people in those countries and for trade privilege for the country as a Least Developed Country (LDC).
For instance, both in India and China, the rising middle-income people of whom most are office-going executive like to have Bangladeshi goods at affordable prices as they cannot afford the expensive high-end garment items.
At the same time, Bangladesh has been enjoying zero-duty benefit on export of garment items to all three countries both for woven and knitwear items as an LDC. So, riding in the trade privilege, garment export to those countries has been increasing significantly every year.
Even during the pandemic time when the export to the traditional markets has been facing difficulties, Bangladesh should focus more on those emerging markets to keep afloat of the business.
Because, the Asian economies are booming and it is believed that by 2030, nearly 50 percent of GDP would be generated from Asian nations because of strong economic performances by India, China and Japan which have a strong consumer base.
With a strong economic footing, Japan is a market of nearly US$45billion retail garment business, India is US $50billion worth retail garment market, China’s domestic clothing retail market is nearly US $300 billion and the Australian market is also nearly US $40billion retail clothing markets.
So, this is a great opportunity for Bangladesh to focus more on those markets to grab more market share in the time of COVID-19 which has severely affected the global apparel supply chain.
Even during the pandemic time, the garment export to some emerging markets has been holding promises.
Bangladesh exported garment items worth US$329.96million in fiscal 2019-20 registering a 34.86 percent fall over the earnings worth US$506.51million in fiscal 2018-19, the EPB data also said. In fiscal 2017-18, Bangladesh exported garment items worth US$391.01million to China.
For instance, in fiscal 2019-20, garment export to India was US$0.42 billion which was US$ 0.49 billion in the fiscal 2018- 19 and US$0.28 billion in fiscal 2017-18, according to data from Export Promotion Bureau (EPB) and Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
So, in the Indian market, it is noticed that the garment shipment has been performing even the pandemic time compared with the pre-pandemic time.
However, the shipment growth could not be maintained in fiscal 2019-20 because of the fallouts of the COVID-19 which has affected the garment shipments to all the markets globally.
Garment shipment to India declined 15.70 percent in fiscal 2019-20 compared with the earning from the previous fiscal year because of the pandemic. In the case of Japan, in the fiscal 2019-20, Bangladesh exported garment items worth US$0.96 billion registering only 11.80 negative growth from US$1.09 billion in the fiscal 2018-19, the data also said. In the fiscal 2017-18, Bangladesh exported garment items worth US$0.84 billion to Japan.
Another promising market for Bangladesh is Australia, where Bangladesh needs to focus more on the time of pandemic because of its potential. In the fiscal 2019-20, Bangladesh exported garment items worth US$0.60 billion to Australia registering a 16.48 percent year on year fall from US$0.71 billion in the fiscal 2018-19. In the fiscal 2017- 18, Bangladesh exported garment items worth US$0.63 billion to Australia.
In three traditional markets, in the fiscal 2019-20, Bangladesh exported garment items worth US $17.14billion to the EU markets registering 18.87 percent year on year fall, in the USA US$5.14 billion registering 16.09 percent year on year fall and in Canada US$0.87 billion registering 25.70 percent year on year fall, the data also said.
So, it is noticed that Bangladesh needs to focus more on the emerging markets in the time of pandemic along with the existing markets of the EU, USA and Canada. Product diversification Not only, the market diversification is important, but also Bangladesh needs to focus more on product diversification in the time of COVID-19.
Bangladesh is mainly strong in cotton fiber-made garment items, which is more than 80 percent now of the total garment shipment from the country in a year. Bangladesh needs to expand products like man-made fibermade garment items because of higher demand and higher prices of those items globally. The unit price of man-made fiber garment items is also very high worldwide.
Moreover, Bangladesh needs to focus more on knitwear items because the demand for knitted garment items has been increasing because of the long stay of people at home during the pandemic time. The pandemic-related garment items should also be produced in bulk quantity because of higher demand. For instance, the export of Personal Protective Equipment (PPE), isolation bed sheets, masks and towels’ demand has been growing worldwide in the time of COVID-19.
Faruque Hassan, president of BGMEA said the shipments from Bangladesh to the US markets are rebounding because of the reopening of their stores and the Biden Administration’s stimulus pay cheques to the people. Asian markets like Japan and China are expected to be rebounded soon as they are back in business. However, India is a major concern as the spike of COVID-19 is increasing in India every day.
So, the rebound of shipments to Indian markets may take more time. Otherwise, in general, the export may rebound soon because of the reopening of stores and economies, Hassan also said.