All, literate and illiterate, men and women, poor and rich living either in urban or rural areas are now familiar with readymade garments (RMG). After a long struggle, RMG industries have now got a strong foothold in Bangladesh to meet the challenges posed by buyers to compete with international competitors. These are surviving after facing local business threats that come from political instability and other crises. Nearly 4,500 garment industries are engaged in manufacturing and exporting RMG products. According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), 3,500 garment factories are compliant and capable to meet any orders of the world-class buyers in terms of quality, value and volume. The RMG industries in Bangladesh hold the position of number one export- earning industry that fetches 81 per cent of the total earnings of the country. This industry needs support from stakeholders, the government, the central bank and trade bodies of the country to expand its exports and sustain its growth, encountering impediments from competitors, international and national political instability. Bangladesh is one of the largest exporters of RMG. Presently, apparel exports account for only five per cent of global garment export that appears to be very low in terms of the number of industries, workers and investment. China, the dominant and number one exporter, accounts for 30 per cent of the global RMG export. Bangladesh’s position in international markets in this regard calls for further gains by all means. Apparels are used universally by all human beings starting from new-born kids, boys and girls to young and old people. It has a vast market around the globe. It’s now up to the manufacturers to capture the global markets. The main buyers of Bangladeshi RMG are the USA, the UK, Germany, France, Spain, Italy, Belgium, the Netherlands and Canada. In January-March 2015 quarter, total export to these nine countries stood at US$ 4,956.73 million of which 91.14 per cent (woven 51.55 per cent and knitwear 39.59 per cent) were garments. During this period, excepting decrease in France (16.11 per cent) and Italy (7.16 per cent), RMG export to other seven countries increased significantly compared to the previous quarter. Bangladesh’s garments are facing stiff competition with the other exporters in the European countries. The situation has further been made difficult as the government has withdrawn cash incentives given to the exporters. The Bangladeshi RMG exporters now face fierce competition in EU countries. Stopping cash incentives would be a big setback to the country’s apparel exporters. RMG industries in Bangladesh mainly produce woven garments, knitwear and sweaters. Woven garments and knitwears are used by the customers around the whole season that is winter, spring and summer. Sweaters, on the other hand, are used in winter seasons mostly in cold countries. That is why Bangladesh’s sweater industries face problems in marketing their products in summer season. Some sweater industries are forced to shut down their factories during the off-peak season. Now is the time for Bangladesh to diversify marketing destinations to ward off intense competition. As most of the RMG exporters in China, India, Vietnam and Cambodia have occupied the market in EU countries, Bangladeshi producers need to find alternative markets. Analysts have identified such markets in Latin American countries, Japan, Australia and southern African countries. The cost of RMG products in Bangladesh is comparably cheaper due to cheap labour that has helped attract middle-class customers in African and Latin American countries. As a single country exporter, Bangladesh is now second only to China in RMG exports globally. “Made in Bangladesh” is now a known insignia in markets around the world. The most promising markets for Bangladesh RMG exports in the medium to long-term are still the countries of North America, the EU, Japan, and the emerging market economies. But other countries such as Australia, Brazil, Chile, China, India, South Korea, Mexico, Russia, South Africa and Turkey appear to be more promising markets, followed by Malaysia, New Zealand, Norway, Saudi Arabia and Thailand. Although exports are important for growth and development, developing countries have been struggling with the challenge of expanding and diversifying their export baskets beyond their primary product bases for a long time. Based on research in recent two decades, it is now well established that openness to trade and integration into global markets is a central element of successful export strategies. Against the background of growing disparity in income between the developed countries and the developing world due in large part to divergence in industrial competitiveness, the central question has always been what can and should be done in developing countries like Bangladesh to boost their export growth, accelerate their export diversification and enhance their competitiveness in international markets? Different strategies may be undertaken to increase export of Bangladesh’s RMG products. In addition to diversifying the export-targeted countries in different continents, exports can be increased by changing the products in terms of types and brands. Bangladesh produces products of other companies like Puma, Arrow, Nike, PVH and other world-class brands. That’s why it is known as the country of cutting and making (CM) in the international markets. The RMG industries should now create their own brands. Now the apparel exporters are getting only the CM charges but if they can export the products as a brand, they may earn more revenue. Proper brand can result in higher sales of not only one product, but other products associated with that brand. If customers love shoes of Nike and trust the brand, they are likely to try other products offered by the company such as trousers, track suit, etc. It is related to key constituencies like customers, staff, partners, investors, etc. A global brand is one which is perceived to reproduce the same set of values around the world. These brands surpass their origins and generate permanent relationships with consumers across countries and cultures. World-class global brands include Facebook, Apple, Pepsi, McDonald’s, MasterCard, Visa, Gap, Sony, Nike, Levis etc. These brands are used to sell the same product across multiple markets and could be considered successful. In recent times, some Bangladesh brands of shirts, namely, Cats Eye, Artisan, Infinity, Richman, etc. earned popularity inside the country and the stakeholders of these brands may go for exporting their products to the international markets using effective strategies. Many RMG producing countries view export diversification as an important policy objective. It has two dimensions: exporting a wider variety of products and serving more overseas markets. Bangladesh’s policymakers may promote the RMG export diversification process through policy support. Cost of production, capital and investment of RMG are very high in Bangladesh compared to other Asian countries. The apparel exporters have been facing stiff competition in international markets and cost of production stands as a big impediment to export diversification. The cash incentive that is given by the government is just a trickle to lower the costs and the existing rate of three per cent cash incentive needs to be revised and enhanced. The costs of capital like bank interest on loans, bank charges and commission for opening Letter of Credit are high in Bangladesh. The policy of the country must be export-oriented. The lengthy and complicated tariff and non-tariff barriers to import and export of goods and services need to be removed and better customs facilitation is a must. For development of any business, research and development at the national level are vital. Bangladesh does not have any world-class research and development institute for RMG although garments are known to be the number one export item that provides employment of 4.5 million people in the country. The BGMEA, the Bangladesh Knitwear Manufacturers and Exporters (BKMEA) and the government of the country may come forward to establish a modern research and development institute for apparels. This will definitely help increase export earnings through diversification.
