Japan has emerged as a potential export market for Bangladesh in the Asian region, as export earnings from the country have seen an 11.73% rise to $1.13 billion in FY18.A non-traditional export destination for Bangladesh, Japan is the only country in Asia from whom export earnings crossed the $1 billion mark in FY17, also having crossed the threshold in FY 16, according to data from the Export Promotion Bureau (EPB).Of the $1.13 billion earned from exports to Japan in FY18, $846.73 million or 74.8% came from the RMG sector. This amounts to a 13.73% increase in RMG exports to the country as compared to FY17.Economists and experts from the business community have said that the increase in exports to Japan is a result of Japan’s China-plus-one sourcing priority, as well as improvements in safety and product quality in Bangladesh’s RMG sector.“Japanese buyers are very conscious of product quality and compliance with regulations in the production process. As manufacturers have improved in both these areas, exports have seen a jump,” Exporters Association of Bangladesh (EAB) President Abdus Salam Murshedy told the Dhaka Tribune.“Aside from traditional markets, Japan is one of the countries in the Asian region with the highest export potential, as it has a huge amount of disposable income,” he added.Meanwhile, Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem said: “Japan is looking for a China-plus-one sourcing hub. As Bangladesh is doing better in recent times, they are importing from Bangladesh. The exchange rate was stable in Japan and the price of the US dollar had less of an impact on their imports.”“In terms of compliance with regulations and quality, Japan has very high standards. If Bangladesh can maintain these high standards, export earnings from the country will continue to grow,” he added. The CPD research director further said that Bangladesh needed to diversify its export markets and ensure that export earnings from more countries crossed the $1 billion mark.
An opportunity to move to value added products
Japan prefers high quality and value added products, and focusing on the market would pave the way for Bangladeshi manufacturers to build relationships with other buyers of high-end and value added products.“In exporting goods to the Japanese market, a manufacturer has to habituate themselves with the trend and pattern of their demands. In the long term, this means the manufacturer will ultimately move towards high-end and value added products,” said EAB President Salam, who is also the Managing Director of Envoy Textiles.CPD Research Director Moazzem said: “Japan has very high demand for non-cotton products. To grab the market, Bangladesh has to concentrate on non-cotton products, and it helps that we already have a strong base in this area.” The economist added that Bangladesh is yet to tap the full potential of the Japanese market, as manufacturers have been unwilling to take small work orders.He suggested the creation of new items for the Japanese market, and also urged steps to increase Bangladesh’s commercial relationship with the country.
