Until recently, Bangladesh’s dominance in the world apparel market remained unchallenged. However, in the last few years, Vietnam has slowly begun to usurp Bangladesh’s position as leading fashion manufacturer of the world. Recent World Trade Organization (WTO) report shows, Vietnam’s fashion industry is at least one score ahead of Bangladesh on 10 leading indices. On the other hands, its score on sustainability and political stability are 1.5 and 2 points ahead respectively.

Titled ‘Textiles and clothing in Asian graduating LDCs: Challenges and options’, the report was prepared after surveying at least 150 exporters and 30 global brands and retailers for their efficiency in creating value added products, innovation, efficiency, flexibility of order quantity, financial stability and political stability.

Bangladesh lags on many indices

As per the report, Vietnam’s score on product quality, lead time, and sustainability is also higher than Bangladesh which lags on 10 out of 12 indices covered in the report. Also, Vietnam can source raw materials in a better way and import them to its ports within 24 hours whereas Bangladesh takes 48 hours for the same, as per a Business Standard report.

Vietnam scores on labor efficiency and quick deliveries

In terms of labor efficiency also Vietnam scores as its workers are known to be 10 to 15 per cent more efficient in manufacturing. The country is able to deliver shipments to European buyers 10-15 days ahead of Bangladesh, says Shovon Islam, Managing Director, Sparrow Group. Also, Bangladesh is unable to send its products to buyers from seaports as it does not have any. It sends products first to Singapore and Sri Lanka and then transfers them to their final destination in Europe and the US. The country also lags in ports and customs management, explains Fazlul Hoque, Former President, BKMEA.

Price, tariff advantages save Bangladesh

However, Bangladesh manages to sustain some of its reputation by scoring on price and tariff advantage points, says the report prepared in collaboration with several UN agencies including the United Nations Conference on Trade and Development (UNCTAD).

Fazlee Shamim Ehsan, Vice President, BKMEA, adds, Bangladesh’s flexibility in terms of order quantity also remains unchallenged. The country manufactures products as per buyers’ demand. Faruque Hassan, President, BGMEA, challenges the wrongful citing of environmental compliance related risks as a downside for sourcing from Bangladesh. He says the country has made huge progress in terms of workplace safety, workers' wellbeing and environmental sustainability.

PTAs, FTAs to help sustain access to EU

Abdur Razzaque, Economist and Writer of the report believes, Vietnam scores with strong FDI in the apparel sector that help improve standards and bargaining power. Vietnam is also on its way to secure duty-free access to the EU apparel market with a FTA. On the other hand, Bangladesh stands to lose this access in 2029, three years after its graduation from LDC in 2026. The report estimates, Bangladesh may lose $5.37 billion with LDC graduation. To avoid this and continue enjoying access, Bangladesh needs to sign a preferential trade agreement and free trade agreement (FTA) with countries and trade blocs, adds Md Fazlul Hoque, former President, BKMEA.

Commerce Minister Tipu Munshi affirms, Bangladesh is looking at signing FTAs and PTAs with several countries this year. It also plans to avail duty-free export facility until 2031, he concludes.

By Fashionating World
https://www.fashionatingworld.com/new1-2/bangladesh-rmg-struggles-to-regain-past-glory-as-vietnam-advances-in-global-market