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Readiness for digital marketplace and automation key for BD apparel makers in 2021

With the existing challenges, the COVID-19 pandemic has brought new challenges for the global fashion industry. Bangladesh, the second-largest exporter of clothing products after China, is closely tagged with those new challenges.

Figure 1: With the outbreak of Covid-19 pandemic, consumers went on contactless purchasing through online marketplace or e-commerce.

In turning around from the devastating impact of the COVID-19 pandemic, Bangladesh has to adopt more technology and prepare itself for the growing online markets.

With the challenges, there is an opportunity for Bangladesh. In retaining the customers, global retailers and brands adopted new digital technology and went to an online marketplace.

“With the outbreak of Covid-19 pandemic, consumers went on contactless purchasing through online marketplace­­­­­­ or e-commerce. Here is a new opportunity for Bangladesh and to cash the advantage it has to make the small factories vibrant to book small quantity orders,” Khondaker Golam Moazzem, Research Director, Centre for Policy Dialogue (CPD) told Textile Today.

On the other hand, factories with bulk capacity also focus on capturing orders from online platforms, while they should reshape their production pattern for this, said the economist.

Manufacturers are also voicing the same as said by economists.

“Consumer patterns are changing, consumerism is changing, and they are having modified taste with limited quantity custom-made products,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Dr. Rubana Huq said.

“Digitalization is creating opportunities for SMEs who are attributed to selling multiple items in smaller quantities. This is altogether a different niche in the market to pitch in.”

Figure 2: Digitalization can play a game changing role in Bangladesh apparel sector.

Digitalization can also play a crucial role to make compliance and safety monitoring in SME factories easier and transparent through the use of a central surveillance system, she adds.

Besides, an online platform of manufacturers could create great opportunities for Bangladesh.

RMG sector is the forerunner in Bangladesh as far as export is concerned, so it can still be the first one to “go global” with branding and “online marketplace” said BGMEA president Dr. Rubana Huq.

The ongoing evolution of the global apparel industry is the significant trends in migration to online retailing. If we can float a virtual marketplace, it could be the country’s recognized marketplace.

The global online fashion market was worth $533 billion in 2018 and is predicted to grow to $872bn by 2023.

Since global demands are changing, we have to prepare ourselves for the virtual market space in that line, she adds.

Since the pandemic hit global economies, people’s income shrank and the expenses for consumers for clothing will decline. But there are demands for new goods such as personal protective equipment and masks and it creates an opportunity for Bangladeshi.

“As a new item PPE product has opened an opportunity for Bangladeshi manufacturers and we are doing better in this segment,” SM Khaled, Managing Director of Snowtex Limited told Textile Today.

As the pandemic going on, the demands are still high and we can tap the opportunity in the New Year, he added

Another opportunity for Bangladeshi apparel manufacturers in the year 2021 will be product diversification as well as value-added products.

As of now, most of our apparel exports are focused on basic products. But the demands for fancy and high-value products, especially manmade fiber products are on the rise.

“Pandemic threw challenges for the apparel sector but there is an opportunity. Amid the pandemic, there is an opportunity for Bangladeshi manufacturers to grab more market share from the pie,” Abdus Salam Murshedy, president of Exporters Association of Bangladesh (EAB) told Textile Today.

Moving towards value-added products and diversifying apparel goods could help us to a great extent in turning around from the pandemic and to create resilience. But the government has to continue its policy support and offer more support in combating the second wave of the pandemic, he added.

Figure 3: Ways to sustain textile and apparel industry in the long run.

Beyond this, there will be an opportunity for the sector to attract Foreign Direct Investment (FDI) as a good number of foreign investors are relocating from China.

“As Bangladesh surplus labor and offering an attractive investment opportunity, apparel sector people should make a joint investment with the foreign investors in high-value export items,” said Moazzem.

This will help Bangladeshi apparel makers to move to value-added products manufacturing and share technical know-how, he adds.

Challenges for 2021

Rising prices of raw materials will be a great challenge for the sector in retaining the work orders

“The year 2021 will more challenging for the apparel industry as the demands of apparel goods decline across the globe due to the devastating impacts of the ongoing COVID-19 pandemic, which impacted people income badly,” Mohammed Hatem, first vice president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

On the other hand, another emerging challenging issue is the rise in cotton prices and other raw materials. Prices of cotton rose by $0.30 from the previous prices per kilogram. As a result, we are unable to book the negotiated orders, said the business leader.

On top of that, the recovery will depend on the effectiveness of vaccines in export destinations. Bangladesh should be prepared for ensuring vaccines for the workers and maintaining health safety.

“We don’t know when the COVID will be over. But it was expected that there will be an improvement in the pandemic situation by January- February. But now it could be in June-July with the availability of vaccines,” Ahsan H Mansur, executive director of Policy Research Institute (PRI) told Textile Today.

Manufacturers can only sell products when there are demands from the buyers. But the export destination is going through a tough time and there is a lockdown due to the second phase of COVID, said the economist.

Meanwhile, there will be a change in the business model and the use of technology would increase there.

Buyers will use 3D technology in placing orders with samples instead of a longer physical presence. So the manufacturers have to be more skilled and introduce this technology so that they can take orders through digital platforms, said Ahsan.

Another big challenging issue is retaining the employment of workers as the factory is running with 30% fewer work orders.

Workers are the lifeline of the industry but due to the shortage of work orders, a good number of workers already lost jobs.

In 2021, it would be a great challenge for the industry to retain the workers’ employment if the orders decline further, said industry people as well experts.  They urged the buyers to be responsible in case of setting prices, placing orders and making sure of payment of previous dues.

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

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