Limited cross-border virtual payments and longer lead times compared to traditional methods are key barriers to establishing a virtual marketplace for Bangladesh's apparel sector, a new study shows.
Calling for policy reforms, the study also underlines significant potential to capitalise on the shift to online shopping and integrate the country's textile industry into global value chains.
The research, titled 'Establishing a Virtual Marketplace for Bangladeshi Apparels', was presented at a Dhaka event hosted by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Thursday.
The study, conducted by LightCastle Partners and funded by IFC's Partnership for Cleaner Textile (PaCT II) program, examined market potential, sector readiness and sustainable business models for digitising the apparel sector.
It also proposed strategies to address policy gaps and ensure successful marketplace implementation.
The suggested policy reforms include the facilitation of pre-payment, preparing digital commerce policies for international trade and establishing r-commerce export zones.
BGMEA President Faruque Hassan, Vice President Shahidullah Azim, Directors Abdullah Hil Rakib, Navidul Huq and Md Imranur Rahman, Shovon Islam, Program Manager of the IFC-Pact Nishat Shahid Chowdhury, LightCastle Partners' Co-founder and Director Zahedul Amin were present at the programme.
The study also proposed sustainable business models and necessary strategies essential for successful implementation of the marketplace.
The primary objective of the virtual marketplace is to integrate the local textile industry into global value chains and capitalise on the shift towards online purchasing.
The report emphasises two critical strategic approaches for the sustained success of the apparel sector including the expansion of current Business-to-Business (B2B) activities into emerging markets like Asia and the Middle East and the creation of additional value by establishing direct connections between Bangladeshi manufacturers and end customers (B2C), thereby achieving superior profit margins and increased volume of business.
The platforms will operate as independent private entities, incorporating features such as logistical assistance, design consultation services, secure payment systems, and spare capacity matching, among others, the study suggested.
It also underscored the virtual marketplace's potential to serve as a central hub for stock lots, streamlining connections among local producers, traders, and international buyers in emerging markets.
Speaking on the occasion, Mr Faruque Hassan said Bangladesh's apparel sectors need to develop a comprehensive business model to maintain its position in the global competition ahead.
"This report, I believe, will not only facilitate the expansion of our presence in the digital realm but also serve as a guiding framework for our future business expansion endeavours," he said.
He also said Bangladesh was eyeing to expand its market share to 12 per cent by 2030 from existing nearly 8.0 per cent.
"Since virtual retailing is strengthening its position in the fashion arena, we are laying emphasis on this," he said.
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