Footwear exporters establish strong foothold in US market

Bangladeshi footwear exporters posted a 73.22 per cent growth in the US market last year as their earnings rose to $274.58 million.  

Of last year’s total earnings, $249 million came from leather footwear and the rest from non-leather footwear. Otexa (Office of Textiles and Apparel) data show that the country earned $158.51 million in 2020 exporting footwear to the US. 

Since 2015, Bangladesh’s footwear exports rose by 161.50 per cent to $274.58 million from $104 million.

US-China trade tension and reduced dependency on a single country acted as catalysts. Reasonable prices and successfully highlighting Bangladesh’s quality improvement expedited growth.

“US government is cutting its single country import dependency. Products exported from China to US were hit with rising tariffs due to trade conflict,” Md Saiful Islam, managing director of PICARD Bangladesh Limited, an export-oriented leather products manufacturer, told The Business Post. 

The US has taken a geopolitical decision on trade sourcing destinations. In addition, US retailers fear a further escalation of tariff tensions, said Islam. 

As a result, they relocated large volumes of orders to Bangladesh, which helped boost our export, he added. 

Exporters need to retain the growing interest of the retailers and brands, where the government has to play an important role to facilitate the exporters.  

“The US is prompting its importers to rely less on China to reduce dependency on a single country for sourcing products,” Mohammed Nazmul Hassan, managing director of Leatherex Footwear Industries, told The Business Post. 

US import ban from China’s Xinjiang region over human rights abuses and the tariff war encouraged buyers and brands to relocate sourcing destinations, said Nazmul, also vice-president of Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh. 

“We will be able to grab the lion’s share of the US market if we can ensure environmental compliance, workplace safety and reduce lead time,” said the business leader.  

Zahid Hussain, a former lead economist of World Bank’s Dhaka office, concurred. “Thanks to available raw materials, Bangladesh’s biggest strength, we can easily take the lead in the US market,” he told The Business Post. 

However, environmental and workplace compliances are crucial for the sector, creating obstacles in tapping the opportunities.  The government should allow individual companies to set up Effluent Treatment Plant (ETP). Though it is difficult for a single company, they should do it for the sake of their business, said the economist.  

Branding Bangladesh’s footwear products played an essential role in posting sharp growth in exports earnings. 

“American buyers and brands were not familiar with Bangladeshi products and their quality but in recent time, participation in several expositions connected exporters with them,” said Md Saiful Islam, also president of Metropolitan Chamber of Commerce and Industry (MCCI). He said they arranged international Bangladeshi leather footwear and leather goods sourcing shows.  

The government decided to relocate tanneries from Hazaribagh to Savar to prevent air and water pollution faced with criticism from local and international rights groups.

In April 2017, the government stopped rawhide supply to Hazaribagh and forced about 200 tanneries to shift to Savar Leather Industrial Estate. Leather products export has been hit because many tanners failed to relocate to Savar. However, in recent months, exports have improved. 

Current status of leather and goods exports

According to Export Promotion Bureau, Bangladesh’s export earnings from leather and leather goods during the July-January period of FY22 increased 29.66 per cent to $682.74 million, which was $527 million. 

Leather products exports rose by 37.41 per cent to $183 million, followed by leather footwear by 25.79 per cent to $414.52 million.