RMG buyers, brands expected to increase sourcing from Bangladesh: BGMEA chief

Western buyers and brands are expected to increase their sourcing of apparel from Bangladesh, given the significant growth in retail sales during various festivals over the last two months, including Black Friday, Cyber Monday, Christmas Day, and Boxing Day, said BGMEA President Faruque Hassan.

In a conversation with The Business Standard at his business office after the 12th national election held on Sunday, the president of the Bangladesh Garment Manufacturers and Exporters Association said in recent years in the US, Cyber Monday has become a mega-annual online shopping event on the Monday following Thanksgiving.

Following these festive events, some retailers have cleared their inventory, and other economic indicators are also favourable for regaining consumer buying capacity.

Considering all indicators, the leader of apparel exporters hopes that buyers may place orders in the coming days. This visibility is expected to increase by next week, as many are currently enjoying holidays following Christmas Day.

In general, apparel exporters experience a slowdown in orders during the election month in every national election, said Faruque Hassan.

This year, some other factors – such as inflation driven by the Russia-Ukraine war – added to the fears. However, after the election, apparel demand is expected to increase in Western countries, as most nations have stopped hiking interest rates after about 18 months, with inflation starting to ease.

The BGMEA president expressed hope that Western consumers may resume shopping in the next quarter.

Despite the hope, he also expressed concern over some internal challenges that are hindering the growth of their business.

Faruque Hassan said the simplification of business processes, the control of corruption in government offices, and the speedy implementation of mega projects are prerequisites to boosting business.

He stressed the need for an uninterrupted supply of gas and electricity to maintain shipment datelines for exporters.

Due to a weakness in the distribution system, industries are facing load shedding despite the country having a higher production capacity of electricity than demand, Faruque Hassan said.

He called upon the government to consider a policy to provide tax benefits for investing in solar energy.

He expressed hope that the continuation of the current government would likely help them take necessary actions within a short time.

Customs-related harassment remains a major challenge in diversifying their product basket, and certain banking-related policies are needed to enhance their capacity and strengthen backward linkages, he said. These measures will be crucial for maintaining export growth in the post-LDC era.

The BGMEA president said the global apparel market size had been shrinking, and Bangladesh was faring better than its competitors.