In the course of about three decades the readymade garment (RMG) industry of Bangladesh now accounts for about 80 per cent of the country's total export earnings. The garment industry has created employment directly for 4.4 million people and 4 million more people are working in backward and forward linkage industries. The sector, through large-scale employment generation, has helped alleviate poverty in the country to a great extent, brought a dynamic change in the society and positioned Bangladesh as the second largest apparel exporting country in the world.
Though Bangladesh is the second largest apparel exporter in the world, the lion's share of our total garment exports is concentrated in only two markets - the EU and the US. There is thus the critical need to expand our markets beyond the traditional ones. One important reason for which we have to go for non-traditional markets is that from the existing markets the manufacturers get sufficient orders for eight months in a year, but remain idle during rest of the four months.
However, if they can explore new markets in Latin America and South Africa, the flow of orders will remain the same throughout the year, as when it is winter in the US, it is summer in the southern hemisphere and Latin America. In addition, alternative markets will be comfortable for the exporters as, at the initial stage, the new importers will not impose tough conditions like those of the traditional markets. So, we need to explore and exploit the non-traditional markets as market diversification will not only help Bangladeshi manufacturers reduce dependency on the selected markets but also increase their bargaining power in setting product prices. As we look forward to the big leap of $50 billion apparel export target by 2021 (when Bangladesh will be celebrating the golden jubilee of its independence) exploring non-traditional markets is one of the keys to achieve that vision.
The government of Bangladesh is also encouraging garment exports to non-traditional markets by providing 3 per cent incentive to the manufacturers from this fiscal. Since its inception, as the apex trade body of the apparel industry in the country, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has always been taking a number of initiatives to promote the trade and explore new markets.
Alongside maintaining liaisons with foreign buyers, business associations and chambers, it is providing foreign buyers with necessary information regarding issues concerned with the RMG sector and bringing opportunities for local manufacturers to interact with foreign buyers and establish rapport by arranging apparel fairs at home and abroad. To explore untapped markets, the BGMEA started new market exploration campaign in 2010. It was a massive campaign the result of which is quite noticeable. The country as well as the industry gained a lot through the campaign, particularly in Latin America and Chile. A number of achievements are as follows:
1. EXPORT INCREASE: Our garment exports to the non-traditional markets has increased manifold in recent years. Our apparel export share to non-traditional markets was only 6.88 per cent in FY 2008-09, which increased to 14.71 per cent in FY 2013-14.
2. SETTING UP EMBASSIES: Prior to the campaign, Bangladesh had no embassy in the Latin American region. After continuous efforts and bilateral discussions, we were able to establish our embassy in Brazil. Brazil also established its embassy in Bangladesh. Discussion is going on with the Mexican government as well, and we are hopeful of establishing embassies in both our countries very soon.
3. MARKET ACCESS: As a result of the campaign and our continuous efforts, the government of Chile waived duty on import of RMG products from Bangladesh. It will start from 01 January, 2015.
If we want to sustain this achievement and keep the momentum going, we need to move further to penetrate the existing markets and to explore untapped markets. Keeping this in mind, the following steps need to be taken to strengthen our position in the global apparel market:
1. CONTINUOUS CAMPAIGN TO CREATE AND EXPLORE NEW AND EMERGING MARKETS: In 2010, BGMEA, in partnership with GIZ, launched a Market Access Guide for Bangladesh Woven Garments Manufacturers and Exporters where seven countries were identified as very potential apparel markets for us. Trade missions were sent to a few them and out of these, we got the advantage of establishing bilateral relationships with a few of them. Now is the time to send more trade missions to those countries for follow up and new missions to other countries as well. We need to create a region-wise list (i.e., Latin American Countries, Middle East Countries, BRICS countries, Asian countries, African countries and so on) and then decide where and how frequently to send missions to these targeted regions.
2. CONCENTRATING ON NEW MARKETS: We need to focus on new markets like China, India, South Korea, South Africa, Russia etc., based on their potentials: These countries can be very good apparel exporting destinations for us if we can properly study their procurement patterns, consumer markets, life style and other relevant economic indicators. The huge domestic consumption of India and China could also be a great opportunity for Bangladesh
3. GULF ECONOMIC COOPERATION (GEC COUNTRIES: U. A. E., QATAR, KUWAIT): Among the GEC countries, U. A. E. is the hotspot of global tourism. Apparel retailing industry is booming there. Their interest in western fashion and trendy apparel is increasing day by day. In 2020, the FIFA world cup is going to be held in Qatar. Based on this, massive marketing and economic activity is growing in the Gulf region. Another advantage of the GEC countries is that all of them follow the same duty structure which is comparatively lower than other countries (only 5 per cent).
4. CONTINUOUS FOLLOW UP IN PROSPECTIVE MARKETS: Because of continuous efforts, we could develop new markets in Brazil, Mexico, Chile and some other countries. What we need now is to sustain and increase the business growth by continuous follow up to these countries, send more missions to explore existing apparel markets to establish a tie-up of enhanced relationships for mutual benefits.
5. ENGAGING WITH THE GOVERNMENTS OF POTENTIAL MARKETS AND PARTICIPATING IN INTERNATIONAL TEXTILE FAIRS: We need to establish and maintain very good liaison with different foreign trade bodies and invite the heads of these bodies to different programmes arranged on apparel and textiles by the BGMEA. We should keep an eye on the international textile trade fairs to choose where to participate.
We hope, if properly implemented, these steps will help us disseminate fair knowledge about our RMG industry among the apparel buyers worldwide and make them enthusiastic to procure apparel from us. Thus we can further raise our share in the global apparel market and move steadily to establish 'Made in Bangladesh' as the number one preferred brand in the world.
The writer is the Vice President of Bangladesh Garment Manuufacturers and Exporters' Association (BGMEA).
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