One of the largest buyers of Made in Bangladesh clothing are H&M and Walmart. Recently, the purchase orders of these two companies from Bangladesh have decreased by 10 percent. Those concerned say that in the global economic context, the purchase orders have decreased mainly because of the decrease in demand in the respective countries. In this situation, the days ahead may be challenging for the apparel sector.
Sweden’s H&M is a major clothing supplier to the European market, and Walmart to the US market. Usually H&M buys about $4 billion worth of clothes from Bangladesh every year. In addition, Walmart buys $2 billion worth of clothing. In the first two months of this year, H&M’s purchase orders fell by 10 percent compared to the same period last year. Walmart’s purchase orders also fell at the same rate.
H&M usually buys $4bn and Walmart buys $2bn worth of clothes from Bangladesh every year.
Sources related to the industry have calculated this by considering the amount of purchase orders given to factories in Bangladesh.
Due to the effect of Russia-Ukraine war, all the countries of the world have to deal with inflationary situation. Due to which consumers have to pay more attention to meet the demand of essential products like food and energy. Clothing has naturally moved away from the shopping priority. Due to this trend of consumers, brand retailers have also changed their purchasing strategy.
Analysts say even if there is a 5 percent impact on H&M’s sales due to reduced consumer demand, it will have a big impact in Bangladesh. The proof of that is found in the purchase orders of the last two months.
According to the data provided by BGMEA, Bangladesh’s garment exports to 27 countries of the European Union increased by 8.42 percent in the first two months of this year. However, exports to Germany, the largest market, fell by 12.37 percent. During this period, clothing exports to the United States decreased by 13.79 percent, Canada decreased by 3.49 percent.
However, new markets are being created, while exports are also increasing, despite a decrease in orders in the two largest markets. Marks and Spencer buys clothes from Bangladesh for the Indian market. The purchase order of this organization has increased by 20 percent in January-February. Due to which garment exports to new markets like India increased.
Non-traditional apparel markets include countries such as Japan, Australia, Russia, India, South Korea, China, United Arab Emirates, Mexico, Malaysia, Saudi Arabia, Turkey, South Africa, New Zealand, Chile and Brazil. Among these countries, Bangladesh has exported the highest amount of garments to India and Turkey. Garment exports in these two countries increased by 103 and 104 percent in January and February respectively.
According to the concerned, this slowdown in the demand and consumption of apparel may continue for some time. Overall, the coming months could be quite challenging for Bangladesh. But in the meantime, besides exploring new opportunities, we have to look at the proper use and efficiency of resources.
