[🇧🇩] Textile & RMG Industry of Bangladesh

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How Bangladesh Became a Global Textile Hub

 

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10 Key Statistics on Bangladesh's Growing Textile and Clothing

In this article, we will discuss about 10 key statistics that support Bangladesh textile and garment industry is forecasted to continue growing.

www.worldfashionexchange.com

The Rise of Bangladesh’s Textile and Garment Industry: 10 Key Statistics​

June 2, 2023.4 mins read

Introduction​

Bangladesh’s textile and garment industry is a major contributor to the country’s economy, and it is a vital player in the global textile and apparel market. In the fiscal year 2021-2022, Bangladesh exported garments worth US $42.613 billion, making it the second-largest apparel exporter in the world (Export Promotion Bureau data).

In addition, the garment industry is also a significant source of employment and income for Bangladesh, with more than 4 million people (about twice the population of New Mexico) working in the sector.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) reported that in the first eight months of 2022, BD ready-made garment (RMG) exports totaled $29.825 billion, up by 38.39% compared to the same period in the previous year.

The United States is the largest export destination for Bangladeshi garments, accounting for around 21.50% of total exports. The European Union (namely Spain, Germany, Italy, France, Belgium and Netherlands) is the second-largest export destination for BD apparel, followed by UK and Canada.

Here are 10 key statistics about Bangladesh's garment industry:

1. In 2021-2022, Bangladesh RMG exports reached $42.613 billion.

1. RMG exports saw a 35.47% year-on-year growth in the fiscal year of 2021-22.

1. Bangladesh is the second-largest cotton yarn exporter worldwide.

1. Knitwear is the largest export contributor at 41.8% in Bangladesh’s national export earnings.

1. Bangladesh is the world’s fifth-largest exporter of home textiles crossing $1 billion in 2020-21.

1. Bangladesh’s textile and garment industry employs around 4.4 million people, mostly women.

1. In 2021, Bangladesh’s textile and garment industry attracted $3.5 billion in foreign direct investment

1. Bangladesh’s garment exports to India surged 69.58% to $715.41 million in 2021-2022.

1. BD garment manufacturers aim to hit $100 billion in export earnings by 2030 (BGMEA).

1. DTG is the largest garment machinery, home textile and accessories expo in Bangladesh.​

Conclusion​

Bangladesh’s textile and garment industry is forecasted to continue growing, and it is expected to account for more than 10% of the global market by 2025, according to BGMEA. The industry is also set to benefit from the ongoing shift in global sourcing patterns as more and more countries look to diversify their supply chains.

As per Sri Lankan financial services firm CAL Bangladesh, Bangladesh’s apparel sector will see a short-term dip in 2023 but a strong rebound is expected in 2024 which will help the sector’s exports reach US $56 billion by 2026.

 

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https://www.ids.trade/files/actif_report_on_bangladesh_textile_and_garment_industry.pdf

Report on Bangladesh Textile and Garment Industry

 

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Bangladesh’s Garment Industry: Future growth in a changing world

Bangladesh has emerged as a significant player in the global garment industry, securing its position as the second-largest garment exporter worldwide. The country’s remarkable journey from economic struggles to becoming a key player in the textile and apparel sector is a testament to its...

www.thedailystar.net

Bangladesh’s Garment Industry: Future growth in a changing world​

Bangladesh has emerged as a significant player in the global garment industry, securing its position as the second-largest garment exporter worldwide. PHOTO: COLLECTED

Bangladesh has emerged as a significant player in the global garment industry, securing its position as the second-largest garment exporter worldwide. The country's remarkable journey from economic struggles to becoming a key player in the textile and apparel sector is a testament to its resilience and adaptability.

The roots of Bangladesh's garment industry can be traced back to the 1970s, a period when the country was grappling with the aftermath of its Liberation War and the challenges of establishing a stable economy. In the early stages, the industry was primarily focused on meeting domestic demand, with limited international exposure. However, a series of economic reforms and strategic decisions paved the way for Bangladesh to enter the global market.​

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Policy initiatives

The economic reforms initiated in the 1980s played a pivotal role in shaping Bangladesh's garment industry. The government, recognising the potential of the sector, implemented policies aimed at attracting foreign investment and fostering a conducive business environment. Incentives such as tax breaks, the duty-free import of machinery, and streamlined export procedures helped create a favourable climate for the growth of the garment industry.

Labour force

One of the key factors that propelled Bangladesh's garment industry onto the global stage is its abundant and cost-effective labour force. The country's population density and low wage rates attracted international apparel brands and manufacturers seeking to optimise production costs. This competitive advantage allowed Bangladesh to offer affordable clothing to consumers worldwide, fostering sustained demand for its products.
Participation in international trade agreements and preferential market access further boosted Bangladesh's garment exports. Agreements like the Generalized System of Preferences (GSP) provided the country with tariff advantages in key markets, facilitating increased export volumes. The strategic positioning of Bangladesh in proximity to major consumer markets, such as Europe and North America, also contributed to its accessibility to global supply chains.

While the growth of Bangladesh's garment industry has been remarkable, it has not been without challenges. The sector has faced criticism and scrutiny over issues such as labour rights, workplace safety, and environmental sustainability.

The rapid expansion of the garment industry in Bangladesh has raised concerns about working conditions and labour rights. Incidents such as the Rana Plaza collapse in 2013, which claimed the lives of over 1,000 garment workers, highlighted the need for improved safety standards and worker welfare. International pressure and advocacy have since led to increased awareness and efforts to address these issues.

In response to growing environmental awareness, there is a notable shift towards sustainable practices in the garment industry. VISUAL: STAR

Environmental sustainability

The textile and apparel industry is notorious for its environmental impact, and Bangladesh's garment sector is no exception. The excessive use of water, chemicals, and energy in the production process has raised environmental concerns. Efforts are being made to adopt sustainable practices, with some manufacturers investing in eco-friendly technologies and processes to reduce their carbon footprint.

Global economic uncertainties

The garment industry is sensitive to global economic fluctuations and uncertainties. External factors such as economic recessions, trade tensions, and the impact of unforeseen events such as the Covid-19 pandemic can disrupt supply chains and affect demand for apparel. Navigating through these uncertainties requires resilience and adaptability.

Future prospects for growth

Despite the challenges, Bangladesh's garment industry continues to exhibit resilience and adaptability. The sector's prospects for future growth are shaped by a combination of factors, including technological advancements, sustainability initiatives, and changing consumer preferences.

The adoption of Industry 4.0 technologies is poised to revolutionise the garment manufacturing process in Bangladesh. Automation, artificial intelligence, and data analytics are being integrated into production systems to enhance efficiency, reduce costs, and improve quality. Embracing these technological advancements will not only boost productivity but also position Bangladesh as a competitive player in the evolving landscape of smart manufacturing.

The demand for environmentally friendly and socially responsible fashion is on the rise, and Bangladesh’s garment industry can tap into this trend by aligning its practices with consumer expectations. VISUAL: STAR

Sustainable practices and ethical manufacturing

In response to growing environmental awareness, there is a notable shift towards sustainable practices in the garment industry. Bangladesh has started to embrace eco-friendly initiatives, such as using recycled materials, reducing water consumption, and implementing waste management strategies. Adopting fairer manufacturing practices is not only an ethical imperative but also a strategic move to meet the demands of environmentally conscious consumers and comply with international standards.

The environmental impact of the garment industry is a global concern, and sustainable practices are crucial in mitigating this impact. Ethical manufacturing entails adopting eco-friendly production processes, reducing water and energy consumption, and minimising waste. By embracing sustainable practices, Bangladesh's garment industry can contribute to global efforts to address climate change and environmental degradation, showcasing a commitment to responsible business practices.

Consumer preferences are also shifting towards sustainable and ethically produced products. The demand for environmentally friendly and socially responsible fashion is on the rise, and Bangladesh's garment industry can tap into this trend by aligning its practices with consumer expectations. Sustainable and ethical manufacturing not only attracts conscious consumers but also opens up new market opportunities and strengthens brand loyalty.

Compliance with international standards

Many global retailers and consumers scrutinise the practices of suppliers, and compliance with internationally recognised standards ensures market access and fosters trust. Bangladesh's garment industry, by prioritising sustainability and ethics, can position itself as a responsible participant in the global supply chain.

In fact, sustainable practices and ethical manufacturing contribute to the resilience of Bangladesh's garment industry. Addressing labour rights issues and ensuring workplace safety can prevent disruptions due to strikes or accidents. Environmentally sustainable practices reduce exposure to regulatory risks and enhance the industry's adaptability in the face of changing environmental regulations and consumer expectations.

The sector’s prospects for future growth are shaped by a combination of factors, including technological advancements, sustainability initiatives, and changing consumer preferences. ILLUSTRATION: AFIA JAHIN

Innovation and technological advancements

Embracing sustainability often involves adopting innovative technologies and processes. Sustainable practices can drive technological advancements in the industry, enhancing efficiency and reducing environmental impact. By investing in research and development of eco-friendly materials and production methods, Bangladesh's garment industry can position itself as a hub for innovation and sustainable manufacturing.

Diversification and value addition

To mitigate risks associated with overreliance on a single sector, Bangladesh's garment industry is exploring diversification and value addition. Rather than solely focusing on low-cost mass production, manufacturers are venturing into high-value segments, including customised and niche products. This strategic shift allows Bangladesh to cater to diverse market demands and create a more sustainable and resilient industry.

Bangladesh's garment industry has historically been focused on mass production of basic apparel items. Diversification involves expanding product lines to include a wider array of garments, from high-end fashion to niche markets such as sportswear, athleisure, and sustainable fashion. This strategy helps mitigate risks associated with dependence on a single market or product, making the industry more resilient to economic fluctuations and shifts in consumer preferences.

By diversifying product offerings, Bangladesh's garment industry can tap into niche markets that offer higher profit margins and sustained demand. Customised and specialised garments catered to specific consumer segments can create a competitive edge, allowing manufacturers to differentiate themselves in a crowded global marketplace.

Consumer preferences are dynamic, driven by factors such as sustainability, innovation, and individuality. Diversification enables Bangladesh's garment industry to adapt to these changing preferences. By offering a variety of products that align with diverse consumer needs, manufacturers can stay ahead of trends and maintain relevance in the highly competitive fashion landscape.

E-commerce and digital transformation

The rise of e-commerce and digital platforms has transformed the retail landscape, presenting new opportunities for the garment industry. Bangladesh's manufacturers are increasingly embracing digital transformation, from online sales channels to digital design and production processes. This shift not only facilitates direct access to consumers but also enables greater agility in responding to changing market trends.

E-commerce has dismantled geographical barriers, allowing Bangladesh's garment industry to reach a global audience with unprecedented ease. Online platforms provide manufacturers and exporters the opportunity to showcase their products to customers around the world, enabling them to tap into previously untapped markets. This newfound global reach has become instrumental in reducing dependence on traditional brick-and-mortar retail channels.

E-commerce platforms empower Bangladesh's garment industry to adopt a direct-to-consumer (DTC) model, eliminating intermediaries and establishing a more direct connection with end consumers. This shift allows manufacturers to gain better control over branding, pricing, and customer relationships. By cutting out middlemen, businesses can enhance profit margins and adapt more swiftly to changing consumer preferences.

Online presence through e-commerce platforms enhances the visibility and branding of Bangladesh's garment industry. Through digital marketing strategies, manufacturers can showcase their products to a vast and diverse audience. Social media, search engine optimisation, and other online marketing tools enable companies to build a strong brand image, fostering consumer trust and loyalty.

E-commerce facilitates real-time communication and collaboration across the entire supply chain, from manufacturers to retailers and end consumers. This enhanced connectivity optimises inventory management, reduces lead times, and minimises the risk of overstock or stockouts. The efficient flow of information ensures that products are delivered to consumers in a timely manner, contributing to customer satisfaction and loyalty.

The digital nature of e-commerce transactions generates vast amount of data that can be leveraged for insightful analytics. Bangladesh's garment industry can use this data to understand consumer behaviour, preferences, and market trends. By analysing this information, businesses can make data-driven decisions, refine their product offerings, and tailor marketing strategies to better align with the needs and desires of their target audience.

E-commerce platforms enable the garment industry to offer customised and personalised products, catering to individual preferences. Through user-friendly interfaces, consumers can personalise garment specifications, choose colours, and select sizes according to their preferences. This level of customisation enhances the overall shopping experience, fostering a sense of individuality and exclusivity.

Challenges

Despite the positives, challenges lie ahead for Bangladesh's garment industry. The first of these is sustainability. While this represents an opportunity in some ways, it also is a threat. We are seeing global concerns about clothing over production and mass production centres such as Bangladesh could find themselves in the cross-hairs of these discussions.

There are also issues around climate change. Many buyers from Bangladesh now require their manufacturers to meet strict climate targets around energy use. Can garment makers meet these requirements? To do this, a coordinated approach is needed involving industry, government, and the national energy infrastructure. This issue will become parament over the next five years as buyers seek to hit 2030 climate targets.

Competition is also a challenge. Fast growing rivals such as Vietnam and Turkey are capable of stealing market share from Bangladesh. The latter has the benefit of close proximity to Western customers. The former is ahead of Bangladesh in terms of its technical textile capabilities. Africa is also viewed by many as the next big thing in textile production, although progress in countries such as Ethiopia has been stop-start over the years.

Likewise, talk of near-shoring is an issue Bangladesh should keep a close eye on. There have for many years been discussions around textile near-shoring in countries such as the US and the UK. The benefits of this include speed to market and a reduced environmental footprint.

Near-shoring has yet to take off in any significant form due to numerous reasons—labour costs in the West, lack of skills base and so on—but it cannot be ruled out as a medium- to long-term threat to domestic garment makers.

Bangladesh's garment industry has come a long way since its inception, evolving into a key player on the global stage. The historical development of the sector reflects the resilience of the country in overcoming economic challenges and leveraging its strengths. As the industry faces ongoing challenges related to labour rights, environmental sustainability, and global economic uncertainties, its future growth prospects hinge on embracing technological advancements, sustainable practices, and diversification strategies.

By addressing the challenges and capitalising on emerging opportunities, Bangladesh's garment industry can navigate the complexities of a changing world. As the country continues to evolve, the industry's ability to balance economic growth with social and environmental responsibility will be crucial in shaping its role in the global garment market.​

 

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Garment makers seek policy on virtual marketplaces

Garment manufacturers have sought a policy from the government on virtual marketplaces, saying they cannot enter into deals with international clothing retailers and traders in absence of dedicated international payment gateways for them.

www.thedailystar.net

Garment makers seek policy on virtual marketplaces​

Garment manufacturers have sought a policy from the government on virtual marketplaces, saying they cannot enter into deals with international clothing retailers and traders in absence of dedicated international payment gateways for them.

The existing policy on online marketplaces is limited to only domestic markets, although e-commerce platforms are the main tool for sales of goods both at home and abroad, they said.

In this age of virtual connectivity, people of all ages are spending more time in the virtual world, said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), in a statement yesterday.

For the fashion industry, it has created new opportunities since consumers are increasingly becoming inclined towards digital shopping, he said.

The disruption in global fashion retailing and distribution caused by digital technologies and applications is both a challenge and opportunity, he added.

"In fact, we have well realised the significance of the virtual marketplace during the lockdown periods," Hassan said.

Limitations arising from the regulatory framework, particularly in the realm of cross-border transactions and foreign currency policies, serve as an impediment for the apparel industry to tap into the burgeoning global e-commerce market, he said.


The National Digital Commerce Policy of 2018 only governs the domestic market, and does not make any explicit policy framework addressing international e-commerce, he said.

The absence of global payment gateways, challenges in securing working capital financing, cumbersome export processing for small orders, and an impractical return policy, where returns are categorised as imports, constitute substantial impediments to establishing a robust digital marketplace, said Hassan.

It also underscores the virtual marketplace's potential to serve as a central hub for stock lots, streamlining connections among local producers, traders, and international buyers in emerging markets, he said.

"I hope the policymakers and entrepreneurs will make the most of it to get to the next step, and it may require further studies on specific issues including logistics and distribution, branding, and foreign exchange and revenue policies," he added.

"If we want to maintain our position in the global competition, we need to develop a comprehensive business model," said Hassan.

Earlier, at a press conference on January 25, the BGMEA unveiled the findings of a study on virtual marketplaces. Hassan called on the government to take steps focusing on the study's findings.

The study said the idea of fast fashion is to very quickly design, manufacture, and produce high volumes of clothing, replicating any ongoing trend and constantly updating the shelves of retail stores.

Across most apparel categories, consumers are now wearing each clothing article for only half the duration they did 20 years ago, it said.

Now, fast fashion clothing items are updated weekly by brands such as Zara, H&M, and Topshop, among others, it added.

Before the widespread adoption of fast fashion, clothing was produced on a seasonal basis. New clothes were released in fall, winter, spring and summer, said the study.

In contrast to fast fashion, seasonal clothing takes about a year to go from a concept to the hands of a customer. It takes about 6 to 8 months to conceptualise a design and prepare the clothing articles for production, it said.

Then, it takes another 2 to 3 months for the finished clothing to reach the hands of a customer. This one-year lead time is inefficient for today's consumers, as fast fashion requires trendy clothes to reach customers within weeks, it added.

Hence, cost-efficiency is not the only requirement anymore. Faster production and shorter lead times are needed to stay competitive in the industry, said the study.​

 

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https://thefinancialexpress.com.bd/trade/apparel-export-ebbs-amid-economic-slowdown

Apparel export ebbs amid economic slowdown​

MONIRA MUNNI

Published :​

Feb 19, 2024 00:27

Updated :​

Feb 19, 2024 00:27

A sagging mood in global economy sent Bangladesh's apparel exports ebbing down, with the receipts from its largest market-the European Union---declining over 20 per cent in the past calendar year.

Readymade garment (RMG) exports fetched the country 17.38 billion euros from the EU in 2023 in a 20.65-percent fall from the 2022 earnings of 21.91 billion euro, according to data from Eurostat--the statistical office of the European Union.

Exporters explain the why: high inflation and rising interest rates globally dampened consumer demand that created inventory glut in western buyers' retail stores and discouraged them from placing new orders.

They say the official data from importing countries reflected the real work-order situation here in Bangladesh for the year 2023.

Official figures from the Eurostat showed exports of both knitwear and woven wears to the EU in 2023 having declined.

Knitwear subsector fetched 10.64 billion euros, down from 13.95 billion euro in 2022. Woven items earned 6.74 billion euros, against 7.95 billion euros in 2022.

The overall EU import of apparel in 2023 from the world at large also decreased, by 16.22 per cent to 83.19 billion euros, from 99.29 billion euros in 2022.

The EU trade data also showed two of Bangladesh's key competitors-- China and Turkey--also logged negative growth in export to the EU market in 2023, reflecting an overall dampened Western fashion appetite.

Germany is the single-largest market for Bangladesh's clothing export-and the shipments there, too, witnessed about 17-percent fall last year, says Md Shahidullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

He explains that demand decreased due to wars, which had driven up inflation and interest rates and that resulted in apparel-inventory swelling.

"As a result, buyers placed reduced-rate work orders throughout the last year," he says.

The BGMEA leader, however, notes that retail sales in December improved following Christmas, leading to a decrease in inventory levels and hopes for a turnaround.

"Buyers have recently started making more queries and placing more work orders," he says, expressing hope for increased exports from April onwards.

The BGMEA leader regrets that they are not getting fair price despite recent wage hike as buyers' cost has also gone up due to the long transit time because of Red Sea crisis that has resulted in up to 30 days additional time to reach the destinations.

Echoing Mr Azim's anticipation, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazlul Hoque linked the decline in shipments mostly to sluggish demand amid economic crisis over there.

He said the official data from the EU, and the US-where local RMG shipments also witnessed a 25-percent decline in 2023-- reflected their real situation.

Exporters said there were less work orders last year and many factories closed down at 05:00 pm and could not work overtime for shortage of work orders.

The BKMEA leader also opines that recently the work-order situation turns for the better which might be reflected in five to six months later.

Eurostat statistics show that China's apparel exports to the EU in 2023 amounted to 22.73 billion euros, accounting for a 21.54-percent decline.

Similarly, EU apparel imports from Turkey recorded a 13.23-percent decline to 9.93 billion euros in the calendar year.

Vietnam and India in 2023 experienced negative growth of 14.68 per cent and 13.12 per cent, respectively, reaching 3.78 billion and 4.03 billion euros.​