Bangladesh Apparel Export Sector to Gain from China-US Trade Row

Bangladesh Apparel Export Sector to Gain from China-US Trade Row

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According to new survey, the US – China trade war will be beneficial for Bangladeshi Apparel export sector because American retailers will be shifting their orders toward Bangladeshi manufacturers to branch out their sourcing.

Last year “Fashion Industry Benchmark Study” expressed a strong interest in expanding textile import from Bangladesh as they have been seeking for China alternative.

According to the pole, 78 percent of respondent said they are interested to source from Bangladesh instead of China. This is a significant rise in the pole which was 61 percent in 2017.

According to that same pole, nearly seven percent of the respondents showed strong interest to increase garment sourcing from Bangladesh while half of them somehow expects to increase by 2020.

Another study conducted by Sheng Lu, an associate professor of the Department of Fashion and Apparel Studies of University of Delaware pointed out that “Made in Bangladesh label enjoys a prominent price advantage over many other Asian suppliers.”

It is also said by many respondents that Bangladesh offers the most competitive price, followed by Vietnam. In 2017, Bangladesh was the seventh most preferred sourcing place among American retailers. But recently, it has been placed in the fifth position due to the price advantage.

However, respondents feel that “risk of compliance” is one of most notable weaknesses of Bangladesh. An excessive level of media and public attention is drawn by the social responsibly problem of Bangladeshi Garments industry while safety and treatment of workers further adds to the complexity of the issue.

To American fashion companies, compliance is highly important and a study found that the concern for the potential compliance risk may hold back American companies to source from Bangladeshi manufacturers. 

The following survey was conducted in April-May while the trade war between China and Trump Administration were high.

China is still dominating the industry and remains the top supplier for American companies. Despite the dominant position, China accounts for 11-30 percent of companies’ total sourcing value compared to the previous 30-50 percent market share.

According to US trade statistics China and Vietnam continue to be two most preferred sourcing destination in the world with 100 and 96 percent of respondents followed by Indonesia (79%), India (75%), Bangladesh (75%) and Cambodia (61%).    

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