Boom time for Bangladeshi RMGs in the coming holiday season

Major brands from the European Union and the United States are looking for new sources, which are said to be topped by Bangladesh and its neighbouring India.

Due to the ongoing global supply chain disruptions, fresh rounds of Covid-19 related lockdowns in Southeast Asia, and a manufacturing halt in China due to the energy crisis, global sourcing giants are tirelessly looking for alternatives before the holiday season at the end of this year.

Both Bangladesh and India are top contenders as both offer alternative production capacities, and shorter lead time to fill those gaps, said Quality Inspection Management (QIMA) in a recent article.

QIMA is a provider of supply chain, compliance solutions, and quality control audit in the apparel and textile sectors.

According to the article, Vietnam, previously a winner of the US-China trade war and an initial success story on controlling the spread of Covid-19, suffered a dramatic downhill slide in the third quarter this year, due to surging Covid-19 Delta cases and subsequent lockdowns.

Despite losing interest in China, American and European brands are expanding in multiple South Asian sourcing markets.

The growth of the Subcontinent's textile hubs, in particular, is eye-catching.

Compared to 2019, the growth rate in Bangladesh and India is 66% and 81% respectively in the first half of this year, the article also stated.

While South Asia is a time-tested sourcing hub for textiles and apparel, demand for its manufacturing capacities was not limited to this product category: QIMA data for Q3 2021 showed growth across a wide variety of consumer products, including homeware, gardenware, food containers and toys.

The report also said that as the peak holiday season hindered by unprecedented supply chain chaos, it will be interesting to see if India and Bangladesh can continue to pick up the sourcing shortfall to meet growing demand as Western economies emerge from retail hibernation.

However, the garments of Southeast Asian countries Cambodia, Indonesia, Vietnam; as well as South and Latin American countries of Mexico, Haiti, Guatemala, and the Mediterranean countries Turkey, Morocco, Jordan and Egypt have also a huge demand, according to QIMA.

Earlier, according to a study conducted by the United States Fashion Industry Association (USFIA) in July of this year, Bangladesh's apparel sector was also in the good books of American buyers as it has historically offered to brands prices that are lower than the global average, according to a recent study. 

Nearly half of the fashion brands and buyers of the US surveyed for the eighth edition of the annual study titled “2021 Fashion Industry Benchmarking Study” said they are keen to increase sourcing from Bangladesh over the next two years.

The study showed that the unit price of apparel products in Bangladesh was $2.5 in July-May of this fiscal year while the global average price was $2.6 during the period.

Executives in charge of purchasing clothing from 31 US-based brands, retailers, importers and wholesalers participated in the study which was conducted from April to June of this year. 

Of the respondents, 37% said they would increase their purchase of clothing from Bangladesh, while 11% expressed that they would definitely increase sourcing from the country.

Shahiddullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said in this study that Bangladeshi clothing has good potential in both the US and the European market. 

The buyers have shifted orders from China due to the trade war, from Myanmar due to military rule, and from India due to a shaky Covid-19 situation. Bangladesh is receiving these orders, he added.

According to the BGMEA, EU countries and the US are top destinations of the apparel products of Bangladesh.

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