Bangladesh’s economy is growing rapidly at an average of nearly 6.5% a year and as per the World Bank’s forecast, it will grow at an average of 7.3 percent in 2019. Rapid growth has enabled Bangladesh to reach the lower middle-income country.
So global brands are looking for grabbing the opportunity to start a retail business in Bangladesh. This is a good sign for Bangladesh image that foreign brands are considering the country as one of the safest places to start a business.
Besides, many export-oriented Bangladesh’s companies are also entering the local market and offering the best quality product in a reasonable price. So foreign brands can be both threat and opportunity in the retail market for Bangladeshi retailers.
Foreign brands in the Bangladesh market
Recently a German leading sports brand Puma kick-started its first flagship store in Bangladesh at Banani Road 11 in Dhaka. One of the leading diversified conglomerates of Bangladesh DBL Group is the local franchisee of Puma in Bangladesh.
Similarly, a few years ago Uniqlo, Japan’s most popular clothing merchant and one of the largest foreign manufactures in Bangladesh, opened two retail locations in Dhaka. The stores are partnerships with the Grameen Bank. Both stores feature a range of Uniqlo’s trademark colorful basics—all garments are manufactured in Bangladesh and priced for the local middle class.
“Bangladesh has a rapidly growing sporting culture and is a strategically important market for us to be in. We are excited to establish our presence.”
Yukihiro Nitta, Chairman, Uniqlo Bangladesh, expressed his opinion with BBC during opening shop in Bangladesh, “The economy is growing rapidly. There are 160 million people living in Bangladesh. So, we found that we have a great opportunity to start a retail business.”
Abhishek Ganguly, Managing Director of Puma India said during the launching ceremony of Puma in Bangladesh, “Bangladesh has a rapidly growing sporting culture and is a strategically important market for us to be in. We are excited to establish our presence.”
But when discussing with the people those are engaged in retail business in Bangladesh, they opined foreign brands may not be profitable in the Bangladesh market unless considering below factors to stay competitive:
Local brands have a vision to expand
Similarly, local entrepreneurs are expanding their steeps in developing own brands while many young entrepreneurs are coming in the race. Besides many export-oriented garments industries are launching their own brand and showrooms as they have all the manufacturing facilities.
Yellow, Texmart, Trendz, Amber Lifestyle, Plair and Sailor are some of them who have already made their strong presence in the Bangladesh market with their unique and lucrative products. There are also some leading domestic market-oriented brands like Aarong, Kay Kraft, Dorji Bari, while Sara, Klubhaus, Red, Twelve Clothing and O’code are the recent ones.
The retail culture in Bangladesh
Traditionally people in Bangladesh like to buy everyday products as well as garments in a habit with bargaining from the market. They feel bargaining shop is suitable to win during purchase.
So, it was the biggest challenge for local retailers to motivate customers and to change their traditional buying habit from bargaining to fix price shopping. After years of motivation now local customers are accepting these brands very positively, and they feel comfortable to purchase their fashion products from fix price local brands’ outlets.
Shaheen Ahmmed, Anjan’s Proprietor and Fashion Designer, opined, “We used to participate in different fashion competitions, which are organized by different fashion magazines. As a result, we eventually gained a good reputation among the people.”
There are many advantages for the local brands to be competitive in the Bangladesh market according to people who are engaged in the local brands. Such as-
Will foreign brands be a threat to local brands?
The global market is open, unlimited and not confined in a country’s territory. This is the real factor of open trade in the global market that none of the business entity can be resisted by the law and regulation.
So foreign brands will come as the expansion of their business in Bangladesh to get the undiscovered market segment. So, foreign retailers see Bangladesh as the highest potential to start a business.
But the presence of the giant retails can be also a threat for the local brands and it can grab the biggest market share.
In the open global trade, how local brands can be competitive and stay in the market that is a concerning factor for all.
While discussing with the concern people of the local brands as well as experienced personnel those are engaged with retails and trading business, we found a mix reaction on the entity of foreign retailers in Bangladesh.
Mohammad Aktaruzzaman, Director, Corporate Affairs & Branding, Twelve Clothing, said, “As the global market is open, so no one can resist any brand to enter in Bangladesh. This is in one hand good for the local retailers to match the quality up to the international level. I feel local retailers can offer good quality and affordable price than the foreign brands.”
K. I. Hossain, President, Bangladesh Garment Buying House Association and CEO of Total Apparel, said: “We cannot stop foreign brands to come in Bangladesh rather this can be an opportunity for the local brands to upgrade their quality and product sense so that they can open shops outside of Bangladesh.”
Snowtex—the export-oriented garment manufacturer has launched its own brand ‘Sara’. The company’s Managing Director SM Khaled expressed that his local brand will be present not only in the country but also to set the footprint outside of the country.
What Bangladesh retailers need to do?
While talking with designers who are working for local clothing brands – their opinion is to work more on a traditional dress that people wear in Bangladesh. Designers need to be aware of what’s currently fascinating while making the dress based on traditional practice and cultural heritage of Bangladesh.
According to Takibul Hassan Paramanik Tapu, Fashion Designer, Sara Lifestyle Ltd, “We have to understand the present trend of young people and have to offer a good range of quality product to sustain in the market.”
Md Fazlur Rahman Managing Director of the local brand—Dorji Bari said Textile Today, “Chase the youth’s taste and cope with it is the major challenge to sustain and compete.”
To sustain in the market Bangladesh retailers has to be proactive and consider the below factors:
- Always try to develop the designs following local ethnic fashion sense.
- Designers have to take the time to understand mass requirements.
- Price has to be within the purchasing capacity of the mass people.
- Right product for the right people at the right time.
- They should motivate and attract the middle class towards more to retail culture.
- Practicing good service needed.
- Ensure for the quality product as well as attractive in design.
In the nutshell, the presence of retailers from outside Bangladesh may not be a threat for the local brands if they offer world-class designs and quality product that will build long-lasting relation and partnership with the customers.
Fashion brands have to facilitate to grab the growing demands for fashion wears especially for the youth who frequently changes their tastes. So, the brands have to combine western fashion with the traditional ones to be competitive with foreign brands.