Apparel exports to the non-traditional markets reached $7.68 billion with 32.74% year-on-year (YoY) growth in the first eleven months (July-May) of FY23, higher from $5.79 billion in the same period of the last FY22, according to the Export Promotion Bureau data, compiled by the RDTI cell of the BGMEA.
The United States, Canada, the United Kingdom, and the European Union (EU) countries are commonly characterized as traditional markets in the context of Bangladesh’s primary export destinations, whilst the rest of the markets are termed non-traditional markets.
Japan, Australia, Russia, India, China, South Korea, UAE, Malaysia, Brazil, Mexico, and many other countries are popular non-traditional export destinations.
Earnings from nontraditional markets accounted for 18.04% of overall RMG export earnings for the July-May period of FY23.
Bangladesh earned $6.37 billion from non-traditional markets in FY22, accounting for 14.96% of total RMG export revenues.
According to industry insiders, the major markets like the US and the EU are already saturated and the market share is not likely to increase much.
Moreover, the impact of the ongoing economic turmoil and geopolitical crisis is higher in these destinations but comparatively lower in the non-traditional markets.
The inflationary pressure, recession, and rise in the interest rates in Western destinations have crunched the purchasing capacities of consumers.
However, there is an opportunity to grab a big slice of the pie of the non-traditional market by increasing its share and Bangladesh is still on the right track in this regard.
In recent months, the growth of apparel shipment to the US and the European Union showed either negative or very narrow growth due to the remaining concern about the persisting economic uncertainty of the raging Russia-Ukraine war.
Moreover, the apparel manufacturers of the country are preparing a roadmap to export $100 billion worth of garment items by 2030 and capture 10% of the global market by 2025, riding on exploring new markets or nontraditional markets.
Among major nontraditional destinations, exports to Japan reached $1,457.92 million with a YoY growth of 45.80% from $999.97 million in the last fiscal year.
Bangladesh earned $1,060.69 million from Australia, fetching a growth of 41.82% from $747.93 million in the last FY.
Apparel export to India between July and May of FY23 saw a 46.44% increase to $947.86 million from $647.27 million during the same period of the previous fiscal year.
Moreover, exports to South Korea and Mexico climbed by 28.85% to $501.01 million and 29.41% to $313.94 million.
Brics Countries
There are numerous forecasts that Bangladesh may join the economic group Brics, which includes members such as Brazil, Russia, India, China, and South Africa, all of which are significant non-traditional destinations for Bangladesh.
Bangladeshi garment manufacturers exported apparel goods to these locations worth $1,868.34 million in the July-May period of the fiscal year, representing a 16.38% increase from $1,605.37 million in the same period of the previous fiscal year.
Exports to the BRICS countries account for 24.30% of nontraditional market exports and 4.38% of total exports.
Export to Brazil, China, Russia and South Korea saw 74.64% growth to $151.13 million, 26.25% growth to 252.01 million, 28.82% negative growth to $400.31 million, and 6.82% growth to $117.03 million, EPB data said.
Talking to Dhaka Tribune, Mohiuddin Rubel, director of the BGMEA, said that the largest growth in July-May was in non-traditional markets.
“We are always talking about exporting to nontraditional and new markets and our entrepreneurs are also working on this as our focus should be on how we can increase exports to these markets,” he added.
Geographically most countries, especially China, Japan, India and Australia, are close to Bangladesh meaning the lead time will also be shorter.
“We need to diversify products based on the trends in these countries. Major markets have been heavily impacted by the current economic turmoil. In non-traditional markets, it is considerably less. Moreover, their purchasing capacity is also good,” he added.
In the July-May period of the current FY, Bangladesh earned $42.63 billion by exporting apparel items to its global destinations, fetching a 10.67% growth from $38.52 billion in FY22.
