Fashion entrepreneurs in Dhaka have expressed frustration over the poor sales of their products ahead of the impending Eid-ul-Fitr.
Local fashion brands live on sales ahead of festivals, especially Eid-ul-Fitr, as the lion’s share of their annual profits come from seasonal sales.
Earnings from Eid sales constitute about 40% of the total profits of top brands every year, but this year the figures are likely to fall by 25% of their target of Tk4,000 crore, according to the Fashion Entrepreneurs Association of Bangladesh (FEAB).
Speaking to the Dhaka Tribune, FEAB President Azharul Hoque Azad said they had set a target of Tk4,000 crore for this year based on last year’s sales figures.
As of now they could meet around only 70% of their target, with Eid just around the corner, he added.
“Given the current rate of sales, I think the cumulative sales of local fashion houses would not exceed Tk3,000 crore, which accounts for 75% of our sales target during this festival.”
About the cause of the fall in this year’s sales, Azad said: “We don’t know why the sales figures have plummeted. We are visiting different shopping malls and markets to uncover the reason.”
He, however, observed that the downslide in sales volumes could be an outcome of the rising popularity of virtual businesses, foreign brands, and foreign non-branded products.
He also blamed the decease on the finance minister’s recent announcement to increase value-added tax (VAT) on local products from 4% to 5% in the forthcoming fiscal year.
“The sales figures decreased in the last week, a period when we generally see more and more customers flock to shopping malls and markets. The announcement of VAT might have caused frustration among the customers, discouraging them from visiting markets and buying products during that week.”
Anjuman Arju, a sales associate at Bibiana, said: “We have a wide variety of clothes, but we did not receive satisfactory response from customers, and their turnout was also very low.”
Echoing Azad and Arju, FEAB Vice President Shahin Ahmed said the amount of sales deceased because of unfavorable weather and the growing number of fashion houses across the country.
Ahmed, the owner of fashion house Anjan further said: “Our sales volume is almost the same as in the previous year, while the figures at certain fashion houses are in stalemate.”
Meanwhile, sale and purchase of Eid clothes at e-shops have gained momentum as more and more customers are opting to shop online to avoid unbearable traffic gridlock and sporadic rain.
The sales volumes of e-shops have increased nearly doubled this year compared to the last year, according to e-Commerce Association of Bangladesh (e-CAB).
Last year the number of e-shopping deliveries was around 10,000 a day on an average. This year the figure has shot up to around 20,000 to 25,000 and is projected to hit the 40,000 mark before Eid, e-CAB sources said.