Bangladesh RMG focus on sustainability, adopt water saving technology and significant developments on compliance issues. The popularity of Bangladesh RMG is such that every third European has a T-shirt made in Bangladesh and every fifth American wears jeans manufactured in Bangladesh. The country exports $28.14 billion worth of the item or 6.4 per cent of the global share and the export target by 2021 is to push it up to $50 billion. This looks achievable knowing China has shifted its focus from textile to services economy. Amid all these, a question to ponder over is at what cost does this economic development happening?
McKinsey & Company, the world’s most prestigious management consultancy firm, prepared the biennial survey based on interviews of chief purchasing officers (CPOs) of top 63 global garment retailers and brands that buy apparel items worth $137 billion a year. According to the report Bangladesh will remain the apparel sourcing hotspot for international retailers and brands over the next five years because of competitive prices and China’s declining market share in garment business, says a global survey. In the survey titled “The apparel sourcing caravan’s next stop: Digitization”, 49 percent CPOs said Bangladesh is still their first choice as sourcing destination while 43 percent opted for Ethiopia, 37 percent for Myanmar, 35 percent for Vietnam and 22 percent for India.
Recently Germany has overtaken the US to become Bangladesh’s largest readymade garment export market in the July-August period. There is a significant positive growth rate observed in July-August 2017 period is mentioned in the box.
The garment sector has improved workplace safety and other compliances after fixing the structural, electrical and fire loopholes. But it still needs to ensure shorter lead times, high standards of compliance, higher productivity and capacity at factory level and competitive prices for remaining the top choice of retailers and brands.
In addition Bangladesh needs to keep an eye on emerging competitors like Ethiopia and Myanmar since they are also coming up with big growth potential. Ethiopia is not a major competitor now. But it could pose a big challenge for Bangladesh in the future as it is receiving a lot of foreign direct investment for producing low-cost basic garment items. Also, while China appears to have passed its zenith as a low-cost sourcing country, it would remain indispensable because of its bigger export value.