Saturday, April 20, 2024

Section

বাংলা
Dhaka Tribune

BGMEA assesses possibility to launch a virtual marketplace platform for the RMG sector

Bangladesh stands to gain an additional $489 million in garment business from virtual markets in the USA, European Union (EU), and African markets by 2027

Update : 25 Jan 2024, 08:31 PM

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) conducted a feasibility study aimed at introducing a virtual marketplace platform for the Ready-Made Garment (RMG) sector. This initiative aims to unlock the untapped potential of the virtual garment market in the major export destinations of the country.

As per the findings of the apex trade body, Bangladesh stands to gain an additional $489 million in garment business from virtual markets in the USA, European Union (EU), and African markets by 2027. 

This projection is contingent upon the country successfully establishing an international e-commerce platform within this timeframe.

The BGMEA revealed the data while unveiling a new study titled “Establishing A Virtual Marketplace for Bangladeshi Apparels” on Thursday. 

International Finance Corporation (IFC) conducted the study in collaboration with LightCastle, a consulting firm, for the BGMEA. 

At the launching event, BGMEA President Faruque Hassan said that by the year 2026, the worth of the virtual garment marketplace will reach $308 billion in the USA, EU and African countries.

The study also indicated that by 2027, Bangladesh has the potential to capture 0.2% of the USA, 0.1% of the EU, and 0.75% of the African markets, amounting to a combined worth of approximately $308 billion.

At the presentation, Dipa Sultana, senior business consultant and project manager of LightCastle, said that one-third of the total apparel sales in the EU and the US is estimated to shift to online channels by the year 2027.

“The virtual marketplace will reduce the lead-time, reduce the cost of business and simplify the business procedures in international trade, she said adding the number of middlemen in the trade will also be reduced which will ultimately make the business more competitive,” she said.

There will be international warehouses near to the destinations, she said.

BGMEA President Faruque Hassan said in the virtual marketplace the local garment suppliers can sell the goods to the wholesalers, retailers, brands and even to the end consumers directly which will ultimately help to get more prices as the middlemen will not be in place for taking away a portion of the business.

“Currently, Amazon and Alibaba are doing this business as these companies have their virtual marketplaces and supply the goods to their customers sourced from Bangladesh,” he added. 

He sought policy support for establishing international e-commerce for such virtual marketplaces by the local entrepreneurs so the country could gain a significant portion of the global business.

“The future of the business, not only garment, but also in cases of other products, is virtual online business platforms,” he added saying that for example, a buyer from London wants to buy a garment from Bangladeshi garment manufacturer, but the local supplier cannot make a business with him as the current policy of the customs, port and banks does not support in receiving in payment.

“So, the government needs to simplify the rules of customs, banks and ports so the local businessmen can do more business with establishing the virtual marketplaces,” he added. 

Responding to a question, he said that the virtual marketplaces are already in place but not for the international market yet. 

“The local suppliers are facing challenges in shipment of goods to the EU, USA and other western countries because of the ongoing Red Sea crisis,” he added. 

However, in most cases, the buyers are bearing the cost of freight in the shipment of goods as local businessmen send under the Freight on Board (FoB) method.

“Few businesses also send goods under cost and freight (C and F) methods under which the local suppliers bear the freight costs. The businesses who are sending under the C and F method are facing more challenges of costs,” he added.

In the fiscal year of 2022-23 Bangladesh exported garment items worth $46.99 billion, according to data from the Export Promotion Bureau.

Shahidullah Azim, vice-president of BGMEA, Directors of BGMEA Abdullah Hil Rakib, Navidul Huq and Md Imranur Rahman, Sparrow Group MD Shovon Islam along with other BGMEA leaders and representatives from LightCastle Partners were also present at the event.

Top Brokers

About

Popular Links

x