Bangladesh has the potential to gain additional garment business worth $489 million by 2027 from virtual markets in the US, European Union (EU), and Africa if the country can implement a framework for international e-commerce platforms by that time, according to a new study revealed today.
By 2026, the virtual garment market in the US, EU and Africa will be worth a combined $308 billion, said the study, titled “Establishing A Virtual Marketplace for Bangladeshi Apparels.”
The International Finance Corporation (IFC) conducted the study in collaboration with LightCastle, a consulting firm, for the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The IFC, BGMEA, and LightCastle jointly unveiled the findings of the study at a press conference held at the BGMEA office in Dhaka yesterday.
The study said Bangladesh could gain 0.20 percent of the virtual garment markets in the US, 0.10 percent in the EU and 0.75 percent in Africa by 2027.
It is estimated that one-third of total apparel sales in the EU and US will shift to online channels by 2027, said Dipa Sultana, senior business consultant and project manager of LightCastle, while presenting the study findings.
The establishment of virtual marketplaces will reduce lead times, reduce the cost of business, and simplify business procedures in terms of international trade, she said, adding that the number of middlemen would also be reduced, which will ultimately make business more competitive.
There will also have to be international warehouses near those destinations, she said.
BGMEA President Faruque Hassan said local garment suppliers can sell goods to wholesalers, retailers, brands, and even to end consumers directly through virtual marketplaces, which will ultimately help to get better prices as middlemen will not eat into profits.
Currently, Amazon and Alibaba have virtual marketplaces and supply goods sourced from Bangladesh to their customers, Hassan said.
The BGMEA chief sought policy support from the government enabling local entrepreneurs to establish such virtual marketplaces so the country can gain a significant portion of the global business.
Because the future of business, not only the garment business but also in the case of other products, is through virtual online business platforms, he said.
For instance, if a buyer from London wants to buy a garment item from a Bangladeshi manufacturer, the local supplier cannot conduct business with them because the current policies of customs, ports and banks are riddled with complexities.
As such, the government needs to simplify the customs, port and banking rules so local businessmen can do more business by establishing virtual marketplaces, Hassan said.
Replying to a query, the BGMEA chief said virtual marketplaces were already in place, but not open for the international market yet.
Hassan further said that local suppliers are facing challenges shipping goods to the EU, US and other western nations because of the ongoing Red Sea impasse.
He added that in most cases buyers were bearing the cost of freight as local businessmen deliver under the Freight on Board (FoB) method.
But a few also send goods under cost and freight (C and F) method, under which local suppliers bear freight costs, which had been putting them in a challenging situation.
International retailers and brands are carrying the goods through both sea and waterways now because of the Red Sea crisis, he said.
Still, he was hopeful Bangladesh could fulfil its export target of $100 billion worth of garment items by 2030.
In the fiscal year 2022-23, Bangladesh exported garment items worth $46.99 billion, according to data from the Export Promotion Bureau.
News Sources :thedailystar
