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Lower prices of products in face of pandemic: ways to tackle

Though the second wave of Covid-19 is causing alarm for the people, it created expedience for the external buyers of the second-largest apparel goods producer of the world, Bangladesh. They are demanding lower prices for the same purchase they made a year before.

The price of exported apparel was 2.1 percent lower than the previous year, according to January-September statistics of the National Board of Revenue.

low-price-BD-apparel-COVID
Figure: The price of exported apparel was 2.1 percent lower than the previous year, according to January-September statistics of the National Board of Revenue.

The October data alone says that the price had been decreased by 4.15 % which was 5.23% just in September.

An exporter shared that one of his western buyers bought a pair of pajamas at $1.20 last year; whereas, now he is asking for $1.10 for the same pair.

The production orders of international garment brands were vigorously declining at the start of the covid outbreak.

The EPB, GSO VIETNAM statement of January to July shows that the global export of Bangladesh was the least in April when the number hopped down to less than $1 billion. Hopefully, it took a sharp rise subsequently. But the month-long effect of global lockdown had curtailed new work orders after a series of cancellations or withdrawal of orders, which caused the layoff or removal of almost 70,000 labor of this sector and unyoking hundreds of factories in the country.

Rubana Huq, the President of Bangladesh Garment Manufacturers and Exporters Association said, “So, while the industry struggles to retain 1-2 percent as income, and during the time of pandemic there is no question of making a profit, such decline in prices is quite frightening, particularly if we try to draw a generalized understanding of the financial health of the industry and its resilience to turn around.”

Some apparel millers said that the buyers were taking advantage of the decreased demand along with the fallen export.

“So, while the industry struggles to retain 1-2 percent as income, and during the time of pandemic there is no question of making a profit, such decline in prices is quite frightening, particularly if we try to draw a generalized understanding of the financial health of the industry and its resilience to turn around.”

Rubana Huq, President, BGMEA

The factories are still providing the same capacity, which allured them for lower prices.

How millers can overcome the situation

Economists called for cost minimization and time reduction by enhancing backward linkage and improving efficiencies of entrepreneurs and workers as a solution for current manufacturers and retailer bargaining crises.

It is not ethical if any brand/retailer source or produce a product based on price only. Higher demand for basic products is the main reason behind this. High-end product/product quality and/or critical product mix can help to minimize less competition, opined Shafiur Rahman, Regional Operations Manager of G-Star Raw.

We need to think about consumer buying plan 7 dimensions. Brands are offering to get care the same way. Time is challenging to find out how fast and sharply propose ideas to boost more buying plans from brands.

Ahsan Mahmood, Country Manager, Gina Tricot  said, “Understand the market situation, know the consumer buying plan, find out a way to support and work together- can be the only way to manage order and price.”

Ziaur Rahman, Regional Head of the Swedish fashion brand H&M for Bangladesh, Pakistan and Ethiopia, said, “It’s a competitive market and we all should focus on where we can improve ourselves.”

“Gladly, soon we are going to graduate to a middle-income country. Yet we need to be competitive. I am a firm believer in positive changes, Bangladeshi entrepreneurship are very agile and strong. I am sure we will stand strong in the global competition in near future. Open-minded attitudes, partnership mentality, eagerness to learn and understand our areas of improvement will be the key,” he added.

Some industry experts opined that Bangladesh’s biggest apparel associations like BGMEA, BKMEA, etc. should come up with the minimum price-fixing policy for products. Many millers offer their products at a lower price just to get an order, which ultimately created unethical competition among millers. Buyers take chances this time which led a price-drop for the same product.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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