50 Star US Inc.
With $45 billion in clothing exports in 2022 and a 7.9% market share worldwide, Bangladesh has maintained its second-place ranking in the global apparel trade.
In 2021, Bangladesh's market share was 6.40 percent. Bangladesh's market share increased by 1.5% globally when compared year over year in just the previous year. Significantly, Bangladesh's share of the global garment market is growing.
China's share of the world's garment trade in 2023, according to World Trade Statistical Review data, was 31.7%, and Vietnam's portion was 6.1%.
According to the data, China is the biggest provider of clothing, followed by Bangladesh and Vietnam. Due to China and Vietnam losing the global garment markets, Bangladesh could take second place.
For instance, China's proportion of the world apparel market increased from 18.2% in 2000 to 26.6% in 2005 to 36.6% in 2010. However, as a result of the trade war between China and the USA that started in 2018, it decreased from 32.8 percent in 2021 to 31.7 percent in 2022.
Vietnam's share, on the other hand, increased from 5.8 percent in 2021 to 6.1 percent in 2022. According to WTO figures, Vietnam's share was 2.9 percent in 2010.
The data analyses revealed that China has been losing market share in global RMG commerce, while only a few other nations are benefiting from the migration of work orders away from China.
For instance, Bangladesh's share is increasing every year with the exception of the year 19 since Chinese suppliers are shifting work orders to Bangladeshi providers. In addition to the tariff war, China has been losing a considerable amount of market share every year due to the rising cost of production and the lack of skilled labor in the apparel industry.
Since worker wages have increased and other variable costs of production have increased in China during the past more than ten years, Chinese businesses are unable to turn a profit due to the rising cost of manufacturing.
Additionally, Chinese workers are less interested in working in garment factories and prefer to work in more advanced technology fields like those that produce computer hardware and mobile devices.
because those industries pay better and require less effort than clothing manufacturing. China is consequently gradually losing market share.
Vietnam's market share, on the other hand, is progressively growing but is still far behind Bangladesh with more than $10 billion.
Bangladesh exported $45 billion worth of clothing in 2022, whereas Vietnam exported $35 billion. Therefore, there is a significant divide between the two nations right now.
Given that this nation is already at capacity, Vietnam has recently lost some of its market share in the worldwide RMG industry.
As China heavily invested in Vietnam's textile and apparel industries, Vietnam has likewise shifted its attention away from lower-end clothing goods and toward higher-end ones.
Additionally, owing of the severe effects of the avian flu pandemic and the Russia-Ukraine war, sales of high-end, value-added clothing declined globally, placing a historically high level of inflationary pressure on western consumers.
As a result, sales of high-end clothing as well as other luxury goods decreased globally.
Even throughout the recent period of global economic slump, Bangladesh has been performing well. Locally produced clothing exports have performed well in the US markets, outperforming those from other nations.
For instance, between January and April of this year, the amount of clothing sent from Bangladesh to the USA fell by 17%, whilst the amount of clothing exported from China to the USA fell by over 35%.
Bangladesh has been doing well in the USA as China is losing market share as a result of the trade dispute.
Bangladesh has also been doing well since American consumers have continued to receive goods from Bangladeshi clothing manufacturers despite the covid 19 pandemic.
Because of this, American merchants and brands have faith in the local suppliers who have also improved the RMG industry's and the nation's reputations by making factories more environmentally friendly.
Bangladesh performed reasonably well not only in the USA but also in the EU, UK, and emerging markets, particularly in Asia, where countries like Japan, Australia, India, and South Korea are located. This was true despite the global economic recession.
The sharp increase in the export of locally produced clothing to these countries suggests that consumers in those countries are becoming much more interested in the products due to price competition.
According to BGMEA President Faruque Hassan, the organization's goal is to capture 14 percent of the worldwide market by 2030 by increasing exports from $46.99 billion to $100 billion.
The BGMEA has therefore been concentrating on developing markets and innovative clothing goods. Since the prices of these goods are lower than those of garments made from cotton fiber, the BGMEA has already requested that manufacturers diversify their offerings in the area of innovative garment products to include items made from man-made fiber (MMF).
Because there is a global decline in the demand for cotton-based clothing as a result of changes in design and style and a global increase in the demand for clothing made of MMF.
Currently, 74 percent of the total clothing exported from the nation is made of cotton fiber, and the remaining 26 percent is made of MMF.
Globally, the situation is different. For instance, over 75% of the total number of garments marketed globally are made of MMF, and 25% are made of cotton fiber.
Hassan added that local suppliers have also seen price increases as a result of better raw material pricing being paid for by multinational brands and retailers.
Additionally, he claimed that over the past five years, prices of garments from Bangladesh have climbed by between 10 and 30 percent while manufacturing of high-end garments has increased by 10 to 30 percent depending on the factory.
Bangladesh must sign free trade agreements with significant trading partners so that local suppliers can continue to benefit from the tariff exemption even after the country graduates from the LDC category to that of a developing country by 2026.
Additionally, market and production diversity are crucial because only a small number of garment products account for the majority of the nation's exports each year.
The expansion of the primary export-earning garment business depends heavily on the government's continuing backing of the RMG sector.
The Bangladeshi RMG sector will be more competitive globally and will be able to take greater market share everywhere if things are done well because Bangladesh would confront problems in global marketplaces after 2026.
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