Bangladesh’s attractiveness as an apparel-sourcing destination remains potent, yet the country has faced increasing competition in recent years that could compound the challenges of the pandemic, according to a McKinsey survey that interviewed chief procurement officers (CPOs) in the fashion industry of the country.
Readymade garments (RMG) exports from Bangladesh more than doubled, from $14.6 billion in 2bangladesh011 to $33.1 billion 2019—a compound annual growth rate of 7 per cent.
The value of the country’s RMG exports fell by 17 per cent in the first year of the pandemic, representing revenue losses of up to $5.6 billion.
Data from European and US imports indicate that Vietnam likely overtook Bangladesh in 2020—pushing Bangladesh’s RMG industry out of its position as the second-largest garment-exporting country in the world after China, the authors write.
In 2020, Vietnamese apparel imports to the United States were worth 2.5 times those from Bangladesh. As US buyers move sourcing out of China, Vietnam is proving to be the biggest winner.
A key strategy for the sector’s growth over the past decade has been to diversify customer countries and move to more complex products and value-added services.
However, Europe (62 per cent of export value) and the United States (18 per cent of export value) remain Bangladesh’s RMG industry’s leading customer markets, although dependency on the United States has decreased.
