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2020 USFIA Fashion Industry Benchmarking Study reveals that Bangladesh is the potential sourcing market for the USA

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made-in-bangladesh2020 USFIA Fashion Industry Benchmarking Study reveals that Bangladesh is the potential sourcing market for USA. This year, Bangladesh is the 3rd top sourcing destination, with an 85.7 percent usage rate among respondents, a notable increase from 60 percent in the 2019 benchmarking study. As respondents overall maintain a relatively high level of interest in sourcing from Bangladesh in the next two years: around 55 percent plan to expand their sourcing value or volume (was 60 percent in 2019), and another 30 percent expect no change. The official trade data supports the trend–measured in value, Bangladesh accounted for 9.4 percent of U.S. apparel imports in the first five months of 2020, which was a record high and up from 7.1 percent in 2019.

Overall, respondents say apparel “Made in Bangladesh” enjoys a prominent price advantage over many other Asian suppliers. “Made in Bangladesh” demonstrated a notable price advantage for cotton apparel items, which accounted for nearly 77 percent of the country’s total apparel exports to the U.S. in 2019.59 Other than the factor of labor cost, the strong capacity in cotton yarn and fabric production locally (mainly for knit apparel) rather than relying on imports, has contributed to the cost advantage of “Made in Bangladesh.”

However, Bangladesh does not appear to enjoy much price advantage for man-made fiber (MMF) apparel items, due to its dependence on imported textile inputs. That being said, as an interesting new trend, trade statistics show that the value of Bangladesh’s MMF apparel exports to the U.S. enjoyed a 5.5 percent growth in the five months of 2020. In contrast, the exports from China and Vietnam suffered a significant decline (drop 44.5 percent and 8.8 percent, respectively) over the same period.61 MMF apparel could be a potential new growth engine for Bangladesh’s exports, as U.S. fashion companies are eager to diversify sourcing from China, and the sourcing capacity in Vietnam is not available.