‘Bangladesh should continue to focus on fulfilling the demand of low-price, big-volume customers’
Inflation has made everything more expensive. In addition to that, the strong dollar rate has made imports costlier than ever before. Kyaw Sein Thay Dolly, Managing Director, Cloths “R” US Limited shared her thought on the issue
Kyaw Sein Thay Dolly: The Garment industry in Bangladesh is passing through unprecedented challenging years. Soon after recovering from the economic challenges of a pandemic, the industry faces challenges of currency inflation, devaluation of local currency, shortage of electricity within the country, shortage of gas supply in customer’s destinations and high inflation in western countries.
The industry predicts that all these challenges will impact Winter 2022 sales. Spring/Summer 2023 will have 10% fewer sales orders than Spring/Summer 2022. This is because of the inflation in the US (9.1%), UK (9.4%) and Europe (8.6%). As a manufacturing nation of cotton products, Bangladesh always enjoys higher sales turnover during spring/summer sales.
The gas supply shortage to European countries due to the Russia-Ukraine War also impacts consumers’ purchasing habits. For an average European household, the priority for Winter 2022 would be food on the table and gas to heat their houses; buying new clothes may not be on their priority lists.
The brands are also anticipating fewer sales during the Christmas season.
Also, the Euro hit parity with the US dollar for the first time since 2002. Customers usually purchase from Bangladesh in dollars but sell in euros. The currency parity will have a negative impact on the sales price they pay to Bangladesh factories by 5-10%.
Amid all the challenges, the good thing is that the Bangladesh RMG industry is a strong player in the low-price market category. As the economy will be facing more challenges putting pressure on customers’ purchasing power, the discounters and low-price retailers will get momentum in sales eventually.
Bangladesh may witness fewer business placements in SS23 compared to SS22. But as a manufacturing hub, Bangladesh should continue to focus on fulfilling the demand of low-price, big-volume customers till 2023.
With strong leadership, BGMEA is trying its best to uplift the image of the Bangladesh RMG industry. Bangladesh is nowadays known as a “good quality” and “competitive price” garment manufacturing nation worldwide.
Source: What CEOs think about inflation
