Rasha Khan initially started a manufacturing unit producing commercial bags in Bangladesh, but soon she identified a gap in the market for Bangladeshi bag brands with designs inspired from across the world. Her entrepreneurial journey, paired with a deep love for travel, led to the creation of Escape Bags, which more than just being travel companions, are a celebration of freedom and exploration. With diverse experiences across Thailand, India and Bangladesh, Rasha infuses each bag with a unique story and local identity. Having done BBA in International Business from Siam University and MSc. in Carbon Management from The University of Edinburgh, Rasha leads a team that transforms locally sourced materials into travel partners.
The bag manufacturing industry in Bangladesh is bustling with potential, poised for significant growth amidst an evolving market landscape which not only boasts of impressive production capacity but also is characterised by evolving consumer preferences, making the country a potential leader in this sector. As we delve in-depth into this steadily growing industry, it is crucial to explore both the immediate scenario and the long-term prospects of bag manufacturing in Bangladesh.
A booming market
Bangladesh is currently producing upwards of 50,000 backpacks every day, with a market value estimated at around US $ 2.4 billion. Industry projections indicate that this sector could expand at a steady rate of 5 per cent annually leading up to 2028. The diverse range of products including travel bags, duffel bags, school backpacks and stylish crossbody bags align perfectly with the rising fashion consciousness amongst consumers, particularly amongst Millennials and Gen Z.
The growing urban population, combined with increased income and a desire for trendy, functional bags, presents a considerable opportunity for manufacturers. With a young demographic that is gravitating towards unique and durable designs, the stage is set for the bag manufacturing sector to claim its stake in the market.
Building an ecosystem for growth
However, for Bangladesh to fully capitalise on this opportunity, it needs to build a robust ecosystem conducive to bag manufacturing. At the heart of this is the need for affordable, locally sourced raw materials. Currently, approximately 90 per cent of the fabrics and accessories required for bag production are imported, primarily from China. This heavy reliance on imports presents a significant challenge; thus, reducing import duties on raw materials would undeniably bolster local production.
Another crucial element is the logistics and infrastructural framework of the country. Compared to competitors like Vietnam and China, Bangladesh ranks considerably lower in logistics performance. Improving the efficiency of transportation and supply chains would facilitate timely manufacturing and distribution, ultimately enhancing overall competitiveness.
Moreover, the bag manufacturing industry necessitates specialised training programmes to develop skilled labour. Unlike the garment sector, bag production involves intricate designs and multiple components, requiring workers to possess a keen understanding of various styles, materials and assembly techniques. As such, governments and industry stakeholders must collaborate to provide tailored training that meets the needs of this specialised sector.
Export potential: The road ahead
To further fuel growth, establishing strong diplomatic ties and trade agreements is essential. As Bangladesh transitions into a middle-income country, maintaining favourable trade terms with key markets like the US, Europe and ASEAN nations will be crucial. Exporting high-quality bags can provide a considerable boost to the economy, but manufacturers must also navigate a complex landscape of social audits and certifications that can often be overwhelming and costly.
Additionally, offering higher tax rebates on exports can incentivise manufacturers and encourage them to scale operations. With a concerted effort to provide more financial assistance and resources to small and medium enterprises, the bag manufacturing sector can unlock substantial export potential.
Government orders and the tender business
One of the significant challenges facing bag manufacturers in Bangladesh is the pricing and quality standards set by government and local tenders. With fixed budgets that often lean towards lower quality materials, manufacturers are pressurised to undercut their own pricing to secure contracts. This race to the bottom decreases the value of the product and can ultimately hurt the long-term sustainability of local businesses.
Therefore, it would be beneficial for the government to reassess its approach to tenders, ensuring that budgets align with quality expectations. Acknowledging the inherent value of well-manufactured bags can lead to better agreements that prioritise quality over cost at the expense of local producers.
The personalisation trend
The rise in demand for personalised products adds another layer of complexity. While customisation presents unique challenges, particularly with regard to lower order volumes, savvy manufacturers find innovative ways to manage costs while meeting client needs. By explaining the cost differences of production for bulk versus smaller orders, businesses can guide clients toward making informed decisions.
The overall sentiment is one of optimism. In our factory, we started from scratch in 2021 and now it’s 2024 and we have achieved 100 per cent growth. The market is burgeoning with opportunities, especially as we expand into luggage manufacturing.
Moreover, the future of personalised bag manufacturing appears promising, as vendors are increasingly willing to embrace innovative designs tailored to individual preferences.
| The bag manufacturing industry in Bangladesh is bustling with potential, poised for significant growth amidst an evolving market landscape which not only boasts of impressive production capacity but also is characterised by evolving consumer preferences, making the country a potential leader in this sector. |
Sustainability: A core value
Sustainability is increasingly becoming a priority for many players in the bag manufacturing sector. With a remarkable 65 per cent of the workforce being women, the emphasis on inclusivity and community empowerment is notable. By nurturing local communities and focusing on equal opportunities, we can foster a culture of growth and sustainability. Besides, I am committed to promoting sustainability and addressing climate change through my brand, Escape. Currently, I am in the process of sourcing RPET (Recycled Polyethylene Terephthalate) fabric made from plastic bottles to incorporate into our product line.
To further this initiative, I have partnered with Ecovia, a company dedicated to sustainable practices. Ecovia provides us with 100 per cent compostable packaging for our manufactured bags, which degrades completely within six months.
This partnership reflects my dedication to enhancing our operational sustainability and I am actively exploring additional avenues to integrate SDGs set by the UN into our company. My goal is to build a business that not only thrives commercially but also contributes positively to the environment.
So, as Bangladesh looks towards the future, the bag manufacturing sector has the potential to become an integral part of the national economy. With the rapid increase in demand for bags, it’s an exhilarating time for manufacturers to envision their contributions to a thriving industry. Investments in infrastructure, training and regulatory support can unlock opportunities that not only support the economy but also propel the global reach of Bangladeshi brands.
