Tuesday | 14 January 2025 | Reg No- 06
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Tuesday | 14 January 2025 | Epaper

How to increase global market share of Bangladesh's RMG

Published : Saturday, 14 December, 2024 at 12:00 AM  Count : 681
Md Harunur Rashid
Bangladesh's ready-made garment (RMG) sector is a cornerstone of its economy, contributing significantly to exports, employment, and industrial development. With over $40 billion in exports annually, Bangladesh is the second-largest exporter of RMG products globally, a position it has held for several years. However, recent reports show a slight decline in its market share, from 7.9% in 2022 to 7.4% in 2023, according to World Trade Statistics. Despite this dip, the sector remains optimistic about future growth, aiming to reach $100 billion in exports by 2030, as projected by industry leaders. To secure this ambitious target, Bangladesh must overcome several challenges, address key structural issues, and capitalize on emerging opportunities in the global apparel market.

The RMG sector is facing a range of challenges that are affecting its competitiveness in the global market. One of the most pressing issues is the sharp rise in production costs, which have increased by 50% over the last two years. These costs are driven by several factors, including rising raw material prices, supply chain disruptions, and the energy crisis. Bangladesh's factory owners have expressed concerns about the continuous increase in the price of utilities, particularly gas and electricity, which are vital for production. Factory owners are also grappling with challenges in securing financing from local banks, particularly when it comes to opening letters of credit (LCs) against back-to-back imports.

While these challenges may seem daunting, the resilience and ingenuity of the RMG sector in Bangladesh should not be underestimated. The industry has weathered many storms in the past, and with the right strategies, it can continue to grow and thrive. However, these efforts must be collaborative, with both the private and public sectors working together to tackle these issues.

Despite the difficulties, there are several global trends that present a significant opportunity for Bangladesh to expand its share of the global RMG market. One of the key factors working in Bangladesh's favor is the changing dynamics of the global supply chain. China, long the dominant player in the RMG industry, is facing significant challenges in terms of rising labor costs, labor shortages, and a shift towards more high-tech industries. This has created a vacuum in the global apparel market, which Bangladesh is well-positioned to fill.

As China moves toward automation and advanced technologies, Bangladesh's relatively lower labor costs, coupled with its robust manufacturing capabilities, make it an attractive alternative for global buyers seeking cost-effective, high-quality apparel. In this context, Bangladesh must aggressively market itself as a reliable sourcing destination, offering not only competitive pricing but also an emphasis on ethical production, sustainability, and compliance with international labor standards.

Sustainability is becoming an increasingly important consideration for international buyers, and Bangladesh's RMG sector has been quick to recognize this trend. The country is home to more than 226 green factories, a testament to the sector's commitment to environmental sustainability and social responsibility. In an era where consumers are becoming more conscious of the ethical implications of their purchases, Bangladesh's focus on sustainability can be a powerful differentiator.

The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) has been at the forefront of promoting sustainability and compliance with international standards. As part of its ongoing efforts to align with global trends, the BKMEA is emphasizing the need for Human Rights and Environmental Due Diligence (HREDD), particularly in accordance with the European Union's Corporate Sustainability Due Diligence Directive (CSDDD). These initiatives ensure that Bangladesh's RMG sector not only meets the highest production standards but also adheres to ethical practices that resonate with international buyers.

Moreover, the leadership of figures such as Professor Muhammad Yunus, Chief Advisor to the Interim Government, has played a critical role in enhancing the country's international image. Professor Yunus has emphasized the importance of restoring trust among global buyers by ensuring transparency, accountability, and due diligence in the RMG sector. This focus on ethical business practices has the potential to boost Bangladesh's reputation as one of the safest and most reliable sourcing destinations, attracting more international buyers and securing a larger share of the global market.

To capture a greater share of the global RMG market, Bangladesh must diversify its product range and improve the quality of its offerings. The global apparel market is increasingly segmented, with a growing demand for specialized, high-value products such as activewear, technical textiles, and eco-friendly garments. Bangladesh's RMG sector must innovate and diversify its production capabilities to meet these demands.

At the same time, quality control and compliance with international standards will be key to gaining the trust of global buyers. Bangladesh has made significant strides in improving its manufacturing standards and labor conditions, but further investment in skill development, technology, and quality assurance is necessary. The country's manufacturers must adapt to the growing demand for premium-quality, customized apparel and be ready to cater to the increasingly diverse needs of global consumers.

Increasing Bangladesh's market share in the global RMG industry will also require the strengthening of relationships with international buyers and partners. The RMG sector must continue to build and maintain strong ties with major retailers, brands, and suppliers across the world. Regular engagement with international stakeholders will not only ensure a steady flow of orders but also provide valuable insights into shifting market trends and consumer preferences.

Additionally, Bangladesh must work to expand its presence in emerging markets. While Europe and North America remain important markets for the country's RMG exports, there are significant growth opportunities in Asia, Africa, and Latin America. By exploring these new markets, Bangladesh can tap into untapped potential and further increase its global market share.

The global apparel industry is evolving, and Bangladesh's RMG sector is at a critical juncture. While the challenges are significant, they are not insurmountable. By leveraging its strengths in labor costs, sustainability, and compliance, and by diversifying its product offerings and strengthening relationships with international buyers, Bangladesh can increase its market share in the global RMG sector. With concerted effort and strategic planning, the country's RMG sector is well-positioned to achieve its goal of reaching $100 billion in exports by 2030, solidifying its place as a key player in the global apparel market.

The writer is a Deputy Secretary, BKMEA 



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