Starting its journey by primarily exporting apparels to USA and Europe (considered the traditional markets), Bangladesh is now looking to spread its wings to reach new export destinations. The second biggest garment exporter globally after China, the former’s declining stronghold in apparels — due to rising labour cost and other issues — has opened the doors of opportunities for Bangladesh. So much so, that today China, despite being the biggest exporter of apparels in the world, is slowly but surely turning into a good market for Bangladesh.
“The market equation is significantly different today compared to what it was a few years ago. Even though Europe and USA continue to be our main markets; in terms of percentage, if these two markets account for around 60 per cent of our total apparel export, the remaining 40 per cent is now going to the non-traditional and new destinations. I personally feel in the coming days, the share of non-traditional markets would increase considerably,” maintains Uttam Prasad, Director of Sky Apparels Limited, interacting with Apparel Resources.
Sky Apparels Limited is a 100 per cent export-oriented sweater and woven apparel manufacturer (with its very own cone dyeing, piece dyeing, hanks dyeing, and washing facilities) catering to a wide range of buyers across geographical locations.
Prasad’s observations, seen in the light of Bangladesh’s current export figures, seem bang on! Bangladesh RMG exports have continued to perform better in the non-traditional markets during fiscal July to March ‘18, during which the country exported apparels worth US $ 3457.34 million in these markets (which exclude US, EU, and Canada), marking a growth of 7.31 per cent on Y-o-Y basis.
As analysed by Apparel Resources, Japan topped the tally with imports from Bangladesh worth US $ 626.68 million; a figure which jumped by 5.83 per cent on the yearly note. Australia too saw a steep climb of 9.83 per cent in its imports from Bangladesh to help the country earn US $ 495.31 million in the review period. During the previous fiscal, in the same period, the figure stood at US $ 450.85 million. Third in the tally, Russia, which is an emerging market as far as clothing retail is concerned, also imported more apparels from Bangladesh over the last fiscal. Bangladesh increased its RMG exports to Russia by 18.76 per cent and apparel shipments were valued at US $ 298.11 million.
The only concerned area is perhaps China where ‘Made in Bangladesh’ apparels could not see any major turnaround in the Chinese market which grabbed the 4th rank in the table and values of apparel shipments fell by 5.65 per cent on Y-o-Y basis. However, things are all set to change now! To improve trade facility and export apparel items more, Bangladesh has sought duty-free market access in China and already a Letter of Exchange (LoE) has been forwarded to China, and if China approves the LoE, Bangladesh will enjoy exporting the duty-free benefit of 97 per cent of the products under the World Trade Organization (WTO) rules. As per Bangladesh Commerce Minister, China has also expressed its interest in Bangladesh with Free Trade Agreement (FTA). In this regard, the MoU has already been signed between the two countries. Once the FTA comes into effect, RMG export to China is expected to go up significantly.
In another very prospective market of India, Bangladesh is emerging as a strong contender as well, which is going to strengthen further after the Indian Government’s move comes into the picture, to make free access of 61 items (48 of them in apparel) from Bangladesh to balance the trade between the two countries.