The second-largest exporter of garments in the world after China, Bangladesh is the birthplace of a number of prominent fashion brands. Around 20% of the Economy of Bangladesh is made up of the textile and apparel industry. Almost 20 million people are employed there, and it is the main engine of the nation’s economy.
Bangladesh has become a popular location for international apparel purchasers and merchants thanks to improvements in safety, conformity, and the COVID recovery scenario. The localized ready-to-wear market has expanded its foundation of manufacture as well. There are numerous top-tier, industry-leading garment manufacturers in Bangladesh. This is regarded as the primary factor in why marketers choose Bangladesh to be the most fruitful location to source clothing compared to other nations. Retail firms visit Bangladesh for its good quality clothing as well as its low-cost options for country sourcing from apparel manufacturers there.
A Handbook to Sourcing Apparel from Bangladesh
Bangladesh’s manufacturing industry has expanded over the past ten years, but it is still dealing with problems from both the global pandemic and prior. Bangladesh still has a lot of promise as a manufacturing powerhouse, despite the huge changes that have occurred in the industry worldwide. Bangladesh continues to play an important role in the worldwide sourcing of fashion due to its inexpensive cost of labour and significant shipments of ready-made clothing.
How to Source Apparel from Bangladesh?
A Trade-Off in Supply Chain
In supply chains, there is a trade-off present between costs on the one side and conformity, practicality, and dependability on the opposing side. To reach a price level that appeals to the foreign purchaser, a lower-cost site often forgoes conformity, ease, and durability. Bangladesh provides a fair balance between cost-effectiveness and successful conformance.
With tremendous effort and expenditure, Bangladesh now boasts the most tightly controlled low-cost apparel market in the whole globe. Nonetheless, the country has greatly strengthened its position over the past several years and now presents appealing quality to international buyers, particularly if conformance is crucial.
Business Ethics in Bangladesh
Bangladesh is a nation that is heavily populated. But, unlike other nations, Dhaka is the only place where you can conduct all of your business operations in Bangladesh. Bangladesh is Dhaka-centric, which leaves it a fairly effective location to source from, unlike other nations where there are several business hubs. As long as you abide by local travel and destination recommendations, Dhaka is also fairly safe.
Regardless of the fact that Muslims make up the majority of the population, Bangladesh is a secular nation. It’s beneficial for businesses to operate in a secular culture. Even while you would think of South Asia as a challenging region, there are actually a lot of trustworthy and ethical business owners there. To achieve successful results, you must have knowledge of apparel sourcing. A pre-shipment assessment of the items by a person you can trust is crucial. You should make sure that a person is in charge of handling the technicalities on the scene. Furthermore, you ought to locate dependable native assistance so that you can handle the inspection of industries outside of Dhaka that may be difficult to access.
Bangladeshis have a positive outlook. However, there is frequently an absence of preparation in the operation, which makes it simple to miss deadlines. You must exercise patience while conducting business when it comes to meeting times and traffic jams. Little presents are frequently given and accepted. People there are nice and welcoming and they have a compassionate mindset. There are no quick fixes, and Bangladesh isn’t any exception compared to other nations. To assure that the outcome is what you anticipate, you must give more attention to the minute details.
Policies and Regulations
Contrary to popular assumption, Bangladesh is among the top countries for low-cost sourcing since the circumstances for line workers there are some of the finest in the globe. Due to both national and international legislation, it is now simple to locate firms that adhere to global standards.
There aren’t any faultless manufacturers. But what’s crucial is that, before you visit a facility, you may obtain the audit reports and immediately identify any potential problems. You can use this as a solid starting point when talking to the plant management about compliance-related concerns. Bangladesh is accustomed to this, so you can discuss compliance right away.
It does not inevitably imply that a factory is subpar if it lacks an audit report. In order to learn more about the problems, the guidelines, and other factors, you can hire people straight from the clothing manufacturers. If you compare Bangladesh to other low-cost areas, you can typically learn a lot further about your supply chain there.
Pre-Shipment Finance and Foreign Exchange
The requirement for financing before shipping is typical for manufacturers. Generally speaking, businesses in Bangladesh are not well-capitalized. In addition, cotton cannot be grown in Bangladesh; hence, importation is required for the raw ingredients. The fact that Bangladeshi factories frequently seem to be rigid with payment conditions is a factor to keep in mind. This is a byproduct of the framework in place in Bangladesh and isn’t always an indication that the factory is having financial hardships. Local factory owners occasionally take on large amounts of debt in order to make investments in their facilities; as a result, they depend on consumer spending for operating capital.
Foreign exchange regulations in Bangladesh are among the strictest in the world. After 120 days of shipment, Bangladesh must obtain 95% of the trade value of the products in accordance with foreign exchange legislation. The possibility of non-payment is the problem, not the deadline. Under the rules, failing to pay is a crime, and both the shipper and the bank concerned suffer penalties. Because of this, local banks and manufacturers in Bangladesh have trouble extending loans to purchasers.
What to Source from Bangladesh?
Bangladesh’s manpower is both vast and experienced in the clothing industry. Nevertheless, neither Bangladesh produces any quantity of man-made products nor does it cultivate cotton. In the past, Bangladesh was renowned for making simple goods in big quantities and at the lowest possible price. Larger orders of jumpers, t-shirts, hoodies, and polo shirts should be shipped from Bangladesh. There hasn’t been much emphasis on outerwear, formal clothes, or manufactured clothing. The business is shifting more and more to match the greater rates that are presently offered as well as the expenditures of conformity. More intricate goods are now accessible in Bangladesh because of investments in facility upgrades, skill development, and decades of manufacturing expertise. Locating the ideal manufacturer is necessary for sourcing more complicated clothing.
Why should you source apparel from Bangladesh?
Bangladesh’s fashion and textile sectors are recognised internationally to have a promising future. A substantial amount of the country’s wealth is generated by overseas currency obtained through the sourcing of textile materials and ready-made apparel from Asia. Bangladesh has great potential for expansion, particularly in the industrial industry. In addition to having eager consumers in industrialised nations and good labour conditions, the region also benefits from duty-free shopping.
Despite the fact that Bangladesh is appealing for sourcing apparel because of its abundance of affordable prices, numerous merchants are delaying the day they must travel there. This is mainly because it’s commonly believed that the nation is challenging, the quality is inconsistent, the timeframes are frequently missed, and the workplace environments are intolerable.
But, the truth is more favourable than you might anticipate. Now, Bangladesh is home to some of the world’s top industries. It’s simple to handle ties because almost all commerce is done in Dhaka. With 30 years of local manufacturing expertise and a trained local employment force, the wide range of goods accessible is expanding.
Advantages of Sourcing apparel from Bangladesh
Safety and Social Conformity
The safety situation and procedures in Bangladesh serve as a baseline for other garment-sourcing businesses. Bangladesh has raised the bar for workplace and employee safety. Further, the majority of Bangladesh’s minimal-cost garment manufacturers have been investigated and linked to the country’s strict construction codes for both power and fire regulations.
The garment industry in Bangladesh has made impressive strides in ensuring worker safety and defending their rights. Bangladesh’s garment sector workers are now making more money than they were previously, at least on the minimum wage. The workers in Bangladesh will have total freedom under the new labour code, which has been changed twice.
Specialized Workers
Sourcing businesses in Bangladesh employ people who are often more capable and dedicated. The hardworking workers in Bangladesh’s garment sector primarily meet the demands of the organisations. In Bangladesh, a sizable portion of the labour force is knowledgeable about cutting-edge methods for producing clothing and has access to the most recent technologies in this field. Companies that choose to purchase clothing from Bangladesh can gain a lot from this characteristic. The enormous population of Bangladesh is positive in this regard because the garment sector there is heavily reliant on human capital.
Working toward a Greener Future
Bangladesh, one of the biggest exporters of clothing and textiles, is making great progress towards environmentally friendly production methods. Bangladesh actually has the most eco-friendly apparel manufacturers worldwide. The nation’s standing abroad has greatly increased as a result of this transition to a greener future. Nowadays, companies are eager to switch to a more environmentally conscious method of operation. Bangladesh has access to manufacturers that adhere to government-set environmental regulations and take precautions to ensure they do not in any way affect the environment.
Quality
Another aspect that influences the choice of Bangladesh as a location for garment sourcing is the quality of the clothing produced there and the dedication of the manufacturers and workers. The garment businesses in Bangladesh are well-known for assuring buyers of the standard of their goods. As a result, Bangladesh has earned the confidence of major companies in the international market. Furthermore, Bangladesh is home to a sizable population of talented businesspeople. They are reliable, robust, and have a forward-thinking attitude.
Summary
Bangladesh shows great promise for expansion, particularly within the garments industry. The area benefits from fair labour conditions, rapid growth in technological advances, eager buyers in industrialised nations, and duty-free shopping.
Bangladesh is a friendly country that may significantly improve your supply chain when given the proper local support. Bangladesh’s low-cost manufacturing sector is one of the most tightly regulated in the world, and you may obtain third-party reports to gain information and confirmation about the work environment in the companies. Working with trustworthy local partners is essential, and you should be prepared to provide financial support to factories and industries. Normal requirements include an LC prior to shipment and payment in full, or at least 95% of the bill amount, upon arrival.
The market is evolving. The strategic advantage of Bangladesh is shifting. It used to obtain a competitive advantage exclusively on the basis of pricing, but regulatory expenses, improved working conditions, and higher compensation have caused the industry to start making investments in fresh commodities. This demonstrates a promising future for Bangladesh’s apparel sector and the benefits of sourcing from it.
Frequently Asked Questions (FAQs)
What place does the clothing sector in Bangladesh have in the global economy?
Just behind China, Bangladesh is the second-largest exporter of ready-made apparel worldwide.
How much money is generated by the clothing sector in Bangladesh each year?
The garment sector in Bangladesh generates over $22 billion in sales each year.
Why should you source apparel from Bangladesh?
Bangladesh is a desirable location for sourcing clothes because of the increased safety, better pay, inexpensive sourcing options, high-quality clothing, compliance, and the Covid recovery situation.
What is the key reason for sourcing apparel from Bangladesh?
Retail companies visit the country in search of manufacturers due to the low cost of production.