Vietnam stole a good march on Bangladesh in the US apparel market
Bangladesh, which ranks second in global apparel trade, is failing woefully to capitalise in China’s slowly losing grip on the US industry, with Vietnam and other folks making better headway this past year.
In 2020, China shed its industry share by about 3 percentage points to 23.7 per cent, according to data from the US Department of Commerce’s Office of Textiles and Apparel (Otexa).
From over $64 billion of clothing imports by the US in 2020, China solely supplied 23.7 %. In 2019, it had been $13.6 billion.
Vietnam has captured the possibilities and gained most from China's losing market show in the US: its market share rose to 19.2 per cent from 16.2 per cent.
Bangladesh’s market share found in the US expanded by 1.08 percentage points to 8.16 per cent last year.
In 2020, Indonesia's industry share rose to 5.5 per cent from 5.3 per cent in 2019, while Cambodia's market share risen to 4.4 % from 3.2 %.
India's market show declined to 4.7 per cent from 4.9 %.
According to the Otexa info, Bangladesh’s export revenue from the US, the single major export destination, saw an 11.73 per cent fall to $5.2 billion in 2020.
Vietnam, one of Bangladesh's closest rivals, recorded a 7.2 % negative growth to $12.6 billion in the US apparel market.
Following the US-China trade conflict, a great number of Chinese investors relocated apparel factories to Vietnam because of its readiness in entertaining investment and proximity, SM Khaled, handling director of Snowtex, told Dhaka Tribune.
The Southeast Asian can buy recycleables from China within a shorter period, although it takes less time than Bangladesh to ship merchandise to the US as it includes a deep-sea port, said Khaled.
“Besides, Vietnam's investment ability is much higher than us and workers productivity and efficiency are much higher.”
These advantages helped Vietnam to grab more market share.
“If we do not invest, we won't be able to take orders. Therefore, increasing investment from your home and abroad may be the key to increasing from China’s sacrificing market share.”
Bangladesh could gain more if the pandemic didn't reach the exporters badly.
“During the pandemic, we'd to shut creation for almost a month . 5, while Vietnam placed their production operational nevertheless.”
To seize more market show, a strong backward linkage is very important, which was felt through the pandemic.
For reducing lead period, the backward linkage is quite crucial, he added.
Because the labour cost is less than its competition and there are huge opportunities for organization expansion, Bangladesh has ample chance to grow in the US marketplace, said Sharif Zahir, a director of the Bangladesh Garment Manufacturers and Exporters Association.
Vietnam has limited ability to expand business in manufacturing apparel goods, while Bangladesh has an possibility to enlarge the sector.
Bangladesh's government offers investment opportunities in particular monetary zones, said Zahir, also the managing director of Ananta Denim Technology.
Alternatively, you will find a surplus labour force in Bangladesh and the workers' wages are comparatively lower.
On top of that, Bangladesh must improve relations with the US and negotiate with America Trade Representative (USTR) to explore opportunities for duty-free market gain access to, Zahir added.
However, economists explained that limited items and capacity were consistently getting in the form of gaining extra from the opportunity.
As Trump coverage restricted China's trade in the US, exports to the country declined. Taking the benefit, other Parts of Asia grabbed a market show in the US market.
But Bangladesh's gain was comparative less than Vietnam and other folks, said Khondaker Golam Moazzem, exploration director of the Center for Insurance policy Dialogue (CPD).
“This is as a result of our low capacity to create diversified products. From low end to mid and huge valued goods shifted from China because of the trade conflict.”
Vietnam can produce all sorts of goods, even though Bangladesh produces standard and mid-range products.
In addition, Bangladesh's competition like India, Myanmar, Cambodia, and Turkey took a bigger talk about of the pie.
“Bangladeshi manufacturers aren't considering diversifying products. They rather prefer to grow businesses within the same product lines.”
In the given context, Bangladesh must attract foreign direct investment in the value-added segment.
This will help the country to transfer technology and share encounters with foreign investors.
Special economic zones in addition to export processing zones (EPZs) can be a superb tool for attracting investment as Bangladesh offers country-specific zones for investors, he added.
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