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Next decade market challenges for Bangladesh textile and apparel industry

Bangladesh RMG sector is standing just two years behind the $50 billion export target. Considering the current situation industry experts are thinking that industry might not be able to touch the $50 billion millstones by 2021.

Bangladesh has more planning like the Delta Plan (DP) that will allow the country to achieve national-level goals of eradicating extreme poverty, gain the status of UMIC by 2030 and also secure being a prosperous country by 2041.

Bangladesh’s textile and apparel industry has an immense and most vital role to make the plan true. Simultaneously the coming decades are very challenging for the industry considering the downward global market and marketing aspects.

Recently Textile Today organized some Knowledge Demonstration sessions from 4 to 8 September 2019 at the International Convention City Bashundhara (ICCB) on the sideline of the 20th Textech Bangladesh International expo 2019’ to get illuminative feedbacks from the industry leaders on next decade challenges of global market and marketing of textile and apparel industry.

In these sessions, participants pinpointed the root causes of the challenges and recommended some way outs to overcome the challenges.

According to a report released by the Reshoring Initiative in the US, the bleeding of manufacturing jobs to other countries has stopped, with the U.S. seeing a total of 249,000 manufacturing jobs returning home from offshore between 2010 and 2015.

This article will give an in-depth analysis by incorporating aspects related to the textile and apparel industry by engaging key stakeholders’ opinions through Textile Today Knowledge Demonstration sessions and one to one interviews.

Challenging market trends

Anti-globalization (Offshoring to reshoring): Anti-globalization trend is now a major concern in the international market where the USA is the key player to stir the world trade. Even the recent trade dispute of the USA and China engendered a new threat and seriously destabilized the geo-economic balance of the world.

When US President Donald Trump announced “Buy American, Hire American” in the same line Narendra Modi campaigned to “Make in India” is the strong conception of anti-globalization.

The historic trade wars namely opium war, chicken war, the pasta war, the Banana war and Smoot-Hawley Tariff Act in 1930 that occurred among the different countries were based on anti-globalization theory and not surprisingly, USA was involved in four of five of these historic trade wars.

So, Bangladesh textile and apparel industry should give utmost attention to the trend and have to adapt the changes – in quickest possible time – to secure future business.

Tareq Amin, Textile Today giving Knowledge Demonstration session.
Figure 1: Tareq Amin, Founder and CEO of Textile Today giving Knowledge Demonstration session.

Tareq Amin, Founder and CEO of Textile Today explained, “The concept of anti-globalization now again not only because of the trade and economic factors, but many other social and political factors are also encouraging localized manufacturing. And in fact, almost dead textile and clothing manufacturing bases in the west seem to experience some sort of re-birth”.

“The nationalistic protectionism that drives this policy is not only political rather economic protectionism is among the key driving forces,” he concluded.

According to a report released by the Reshoring Initiative in the US, the bleeding of manufacturing jobs to other countries has stopped, with the U.S. seeing a total of 249,000 manufacturing jobs returning home from offshore between 2010 and 2015.

Manufacturers are now able to generate the same or better workflow without being labor-intensive due to the rise in automation. It takes just five workers to create US$1 million worth of output in contrast to 25 workers needed back in 1980.

Challenging apparel market trends

Fast fashion to function-oriented: According to the opinions through Textile Today Knowledge Demonstration sessions and one to one interviews, brands are reluctant to go for fast fashion because this trend no more attracts people.

Fast fashion means buying frequently but some major causes hold people to expend more in fashion. Rather they have a new trend to expend their money which is stronger than a fashion trend. Sustainability is the other factor for which consumers feel to buy less to save earth as well as they are more likely to buy recycled products.

Engr. Muhammad Mahiuddin, Executive Vice President, Robintex Group said, “Bangladesh RMG sector already built enormous capacity but consumers developed a trend to expend less in fashion. Meaning, many RMG factories are now going to shut down due to the shrinking of a work order which means our forecast and prediction have gone wrong. So, considering the next decade market we have to venture and take necessary steps”.

Customized orders: On the theme-line of anti-globalization, customization is going to be more effective in the market place. Volume in big quantity or common fashion trends are no more popular in the market. People want customized products and more variety in quality and design that sometimes difficult to manage for the brands.

So, brands are really in pause situation to place order in traditional form and that is the reason countries like Bangladesh passing a prolong period without work order and a lot of closer production units.

Md Shibly, SMS Fashion
Figure 2: Md Shibly, Managing Director, SMS Fashion in conversation with Nurul Alam, Sub Editor, Textile Today.

Md Shibly, Managing Director, SMS Fashion said, “We should explore new market and a new platform for displaying our products, so that any opportunity will not be missed.”

“Without technical expertise, we cannot develop new product and for customized products, we must increase research base program to produce all kinds of trims, accessories and garment materials that can help to reduce long lead time,” said Md Masudur Rahman, Asst. Manager, Biswas Group.

E-commerce: The global online fashion market is predicted to reach $765 billion by the year 2022, a projected increase of $281 billion, or 58%, from this year. This is because people are changing their buying habit and traditional buying practice is going down.

“We should gather knowledge of the global market demand and have to create our own fashion line and brand to survive,” said Biswajit Saha, Executive Director, S. B. Styles Composite Ltd.

Biswajit Saha Knowledge Demonstration session
Figure 3: Biswajit Saha (Right), Executive Director of S. B. Styles Composite Ltd in a conversation with Sanjay Kumar Saha, Sub Editor, Textile Today.

According to Md. Jahidul Islam, Managing Director of Ismail Concern, “E-Commerce is growing in the fashion industry so making your own brand is the only alternative to survive in this crisis situation. Even we can use an online platform like Alibaba or Amazon.”

Need focus for next decade market

Branding Bangladesh textile and apparel industry: Bangladesh textile and apparel industry needs global branding of its strength.

After a long remediation process by Accord, Alliance and National Action Plan, Bangladesh is now a leading example for a safe working place. At the same time, twenty-five Bangladeshi factories have achieved the highest certificate provided by the US Green Building Council (USGBC).

Seven out of the top 10 LEED (Leadership in Energy and Environmental Design) certified factories worldwide are located in Bangladesh. Bangladeshi apparel units have reached the highest status after the disastrous Rana Plaza building collapse that took place on April 2013.

Last year Bangladesh had 67 LEED-certified green garment factories, currently, the total number of LEED-certified green garment factories in Bangladesh is 91, which is also the highest in the world.

Some 500 local garment factories have been waiting to be certified by the USGBC soon. These should be highlighted to the traditional and non-traditional export market of Bangladesh apparel products.

focusing marketing challenges Bangladesh textile and apparel industry
Figure 4: To tackle the next decade’s marketing challenges Bangladesh textile and apparel industry needs to focus on the above issues.

Search the market opportunities: There are many opportunities that lies in the apparel market that never discovered by the Bangladeshi RMG exporters. Because market opportunities can be identified by analyzing changes in the environment with technological and scientific developments. Technical textile, geotextile, medical textile, functional textile and smart textile can be the new opportunities to grow in a diversified level.

Khandaker Ataul Gani (Khokon), Director, Weimco said, “Bangladesh should work on technical textile to broaden its product range so that opportunities never go untouched.”

“Technological and scientific advances always shorten the life cycle of products and services. Keeping that in mind, Bangladesh should stand for new business opportunities before new competitors appear in the market,” said Nayma Parven, Instructor (Textile), Rajdhani Polytechnic Textile Institute.

In conclusion, it can be said before looking to identify market opportunities, Bangladesh RMG sector has to consider and analyze the direct and indirect competitors, complementary products and services, diverse industries, foreign markets and relevant factors of the environment.

Product development: Developing and designing own product is the only way to upgrade the value chain in the pre-production stages. Nowadays many brands and retailers are shutting down their own design studio to reduce the cost and they want support from the manufacturers to get an attractive design that can be a best seller in the market.

So, Bangladesh needs working on many new trends and concepts of pre-production activities with the analysis of tangible areas of improvement.

Product designing can be started from fabric manufacturing. Composite garments factories can add value in fabric making or apparel manufacturers can buy value-added fabrics that will finally upgrade the pre-production stages.

776 fabric manufacturing mills are meeting the maximum fabric demands of apparel millers. The fabric manufacturers should focus on valued added fabric manufacturing.

Garments production flow

Newaz Nawla Chadhory, Assistant Manager, Merchandising, Asmara Bangladesh Ltd, said, “If Bangladesh fails to develop its capability in the product development, in near future there will be a very big carnage in the apparel industry due to order crisis. Therefore, we must think about how to develop new products with new concepts that can add value to the product.”

Engr. Muhammad Mahiuddin, Executive Vice President, Robintex Group said, “Foreign tours for the designers can be a good way to get better interaction with the buyer and to be very near to the fashion market and buyers’ concept. This will help designers to develop numerous products by analyzing market demand and get an advantage over the competitors.”

Muhammad-Mahiuddin, Robintex Group
Figure 5: Muhammad Mahiuddin, Executive Vice President, Robintex Group in conversation with Tareq Amin.

Product diversification: The main challenge of the Bangladesh RMG sector is ‘product diversification’ because a new set up for diversification is really expensive and requires a huge investment.

On the other hand, almost every manufacturer in Bangladesh is producing the same category products that make life-and-death competition to survive among themselves. So, Bangladesh should focus on product diversification by little phase to be competitive in both local and international markets.

Md Masudur Rahman, Asst. Manager, Biswas Group, said, “manufacturers are desperately looking for a good price and want enough quantity to get profitable business they should strengthen their capacity from developing fiber to designing, as they can provide a one-stop solution.”

Nayma Parven, Instructor (Textile), Rajdhani Polytechnic Textile Institute, “There is no other option to give second thought other than product diversification. Automation, digitization and previsions are most important if we want to go for diversification of products.”

Some diversified RMG products

Marketing skills

Marketing is part of strategic intuition and research to see what everyone else is doing. Successful marketers can reach up to current trends and figure out the best marketing skill for their company. Thus, to survive in the next decade market, we have to constantly hone marketing skills.

According to Md Shibly, Managing Director, SMS Fashion, “Market place and market trends are an ever-changing area that needed continuous improvement for marketing skills and it has to keep up with technological innovations.”

“Interpersonal communication skills should go hand in hand with internal communication skills. This particular skill is needed to overcome the next decade market challenge,” he added.

Md Masudur Rahman, Asst. Manager, Biswas Group, said, “The reality of the situation is that we are all human and therefore we should always to set development process for marketing skills. As a marketer, we need to be aware of the changing factors in the international market”.

Marketing skills

Understanding the market

An ability to understand buyer’s needs and the marketing process is the major area to improve skills for the next decade market. This will help to evaluate whether the market demand for a product is accurate, and whether expanding into a potential new market is worthwhile for the organization.

They also need to identify consumer segments, their common characteristics such as lifestyle and values as well as changes in trends. At the same time, knowing the key competitors and their strengths together with weaknesses will help to illuminate specific marketing strategies.

According to Md. Jahidul Islam, Managing Director, Ismail Concern, “Marketing is not about attracting someone to your business once. It will lead often to return time and time again. Consequently, rounding out the list of marketers’ skills needs today with a focus on products and services.”

“Some companies expanded from one geographic market to another, while they don’t have the exact business model to adjacent segments. Therefore, the profitable growth for the company never comes rather they perish in the mid-way because of lack of market understanding,” he added further.

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

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