RMG exports to non-traditional markets witnessed 24.17pc growth
Industry Desk: In July-October FY 2022-23 period, Bangladesh RMG export to non-traditional markets witnessed 24.17% growth. The EPB data also showed that all the major apparel export destinations have witnessed significant growth. The exception is the Middle Eastern market. Currently, Bangladeshi garment exports to the UAE and Saudi Arabia are worth $228 million and $128 million respectively.
Meaning, the nation could increase exports significantly, expanding also to other countries of the Gulf Cooperation Council.
For instance out of the $11.2 billion apparel market in the GCC market, Bangladesh apparel can grab $2 billion initially. Most importantly, the Gulf is a near-shoring region and not far from other leading exporting markets – which makes the delivery time shorter.
Apparel industry experts say that proper measures like- changing the conventional pattern of business and growth, prioritize investments in technologies, modernization, skills, efficiency, and diversification in the product range are now on demand to get the potential of the markets.
At present almost the entire Middle Eastern region is mainly dominated by China, Indian and Pakistani garment items as the presence of Bangladeshi-made garment items is still thin there. The reason is 90 percent of Bangladesh’s readymade garment (RMG) export is destined for European and North American regions.
The Middle Eastern countries are going to be major nontraditional export destinations for Bangladesh as the local apparel manufacturers are now receiving a lot of queries from the buyers of the region, said Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Hence, the biggest threats are the war in Ukraine, rising inflation and supply chain pressures to the fashion industry in the run-up to a challenging year ahead, according to The State of Fashion 2023 report released by The Business of Fashion (BoF) and McKinsey.
Elimination of those challenges should be the top of the priorities of Bangladesh’ exporters for grabbing the Middle Eastern markets. It is expected to have the highest growth potential in 2023, as executives deprioritize countries like China in the short term.
Though Fifty-six percent of fashion executives expect conditions to worsen in 2023, an official press release issued by the two companies said.
The industry will be buoyed by luxury, with global sales in this category expected to grow up to 10 percent in 2023, compared to up to 3 percent for the rest of the industry, the report says.
At present the fashion industry is facing a strong recovery emerging from the pandemic.
However the progress is slow because 85 percent of fashion executives predict inflation will continue to be a challenge next year and 58 percent believe the energy crisis will continue to weaken the market.
So, BGMEA calculated its roadmap for the next 15 years précising over the Middle Eastern and other potential Asian countries as the export destinations for the country.
BGMEA outlined a sharp growth in non-traditional markets which is the outcome of the spirit in all the crises and the commitment in the last few years.
Responsible and sustainable manufacturing will be added more confidence. However, we need to look beyond the conventional pattern of business and growth
Government has a tremendous support to explore non-traditional markets, which came at the persuasion of BGMEA. This has helped grow our export to non-traditional markets from less than a billion dollars to 5 billion dollars in the last 12 years. BGMEA is also working to facilitate exploration of new markets and to retain preferential market access.
Diversification of the industry will need to its portfolio to adjust the demand of the Middle East from production of jeans and shirts.
As about 2.5 million Bangladeshi expats live and work in Saudi Arabia, and another 700,000 in the UAE, they could in the beginning become the key target market and then help to introduce Bangladeshi products to the region.
Bangladeshi producers would be up to the task by using the resources and capacity Bangladesh can serve their demand. Building up the capacities over the last 30 years has made supply possible for whatever continues.
The current market circumstances in the Gulf, where imports have been increasing for the past years, could offer an opportunity to Bangladesh, Dr. Mustafizur Rahman, a distinguished fellow at the Center for Policy Dialogue in Dhaka.
“This can be a captive market for us,” Rahman said. “But obviously it will require a lot of effort on the part of Bangladesh as well because the market in the GCC is quite wide-ranging. They import a lot of apparel.
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