Home ›› 02 Aug 2021 ›› Front
The diversification of products and the nailing of Covid-19 helped Vietnam to surpass Bangladesh in exporting apparel goods to the global markets and clinching the second largest exporter title.
Bangladesh’s position in global RMG exports markets slid to third from second as Vietnam surpassed in clothing products in 2020, according to the World Trade Statistical Review 2021, which was published by the World Trade Organisation (WTO) on Saturday.
As per the data, Bangladesh exported clothing goods worth $28 billion in 2020 while global market share stood at 6.3 per cent.
While Vietnam’s exports of clothing products stood at $29 billion and its market share reached 6.4 per cent in the same period.
As usual, China topped the chart with an export of $142 billion with 31.6 per cent market share.
Industry people largely blamed the ongoing Covid-19 pandemic for losing the position, while economists and trade analysts said high dependency on few products is another reason for falling behind Vietnam.
“Export-oriented apparel factories were closed over one month in 2020 due to the lockdown to stop the spread of Covid-19. As a result, exporters were able to export goods only in 11 months, which has hit the exports earnings,” said Md. Fazlul Hoque, managing director of Plummy Fashions Ltd while talking to The Business Post.
On the other hand, as Covid-19 infection and death rates in Vietnam were very insignificant compared to Bangladesh, Vietnam did not shut their factories and exported goods round the year, said Hoque, a former president of Bangladesh Knitwear Manufacturers and Exporters Association.
As Vietnam was a very close competitor of ours for long, there is nothing to be worried about the recent drop in the position as it may reverse any time, said the exporter.
“In order to retain our position back, there is no alternative to diversify goods. In value-added segments, we are also behind Vietnam, which also needs to be addressed quickly.”
“Fashion trends change frequently and the demands of those products also increase. But Bangladesh failed to cope up with the change to retain the buyer’s attention,” Zahid Hussain, former lead economist of the World Bank, told The Business Post.
In recent times, demands of manmade fiber products or non-cotton products rose sharply globally but Bangladesh is still highly focused on cotton based products. These are also the reasons for less exports for Bangladesh while Vietnam grabs such opportunities with their vast product basket, said the economist.
On top of that, Vietnam’s disciplined Covid-19 management helped them to run their factories, which was also a blessing for the country to overtake Bangladesh in RMG exports, said Zahid.
How to regain the position?
As Vietnam was a close competitor of Bangladesh, there has always been an apprehension of losing the position. Ultimately, it happened as Covid-19 pandemic hit Bangladesh RMG sector badly. But it is possible to regain by focusing on product diversification and value addition.
“We went through a tougher time last year as Covid-19 pandemic severely disrupted our production as well as supply chain due to the frequent lockdown. But we have been able to remain afloat with the government’s support,” said BGMEA president Faruque Hassan while talking to The Business Post.
In this regard, he said, “We are working heart and soul to diversify our products through research and innovation. As a part of it, we are going to launch innovation center soon.’’
To regain the second position, we will have to focus on products and market diversification. Non-cotton products will be the key driver, which is on our priority to diversify goods, said the business leader.
Meanwhile, economists suggested going on manufacturing non-cotton products.
As we have to import cotton to produce products, why the manufactures are not focusing on import of manmade fiber as the future growth lies here, questioned Zahid Hussain.
He also urged the manufacturers to follow the consumers’ behavior in terms of fashion items and move with the innovation to feed them.
