Bangladesh cannot grab or take full advantage of foreign RMG buyers’ changed sourcing strategy of placing orders in small quantities, as they (buyers) still prefer China for its flexibility and agility, industry people said.
Due to the changes in consumers’ demand patterns and fashion trends, the buyers are now placing work orders in small quantities. Bangladesh is recently taking some such orders, but still not high in number.
They identified long lead-time that the country needs for shipping goods, absence of adequate backward linkage industry – mostly for woven garment, and mentality of the owners as the major reasons behind the scenario.
A recent case study – ‘US Fashion Companies Evolving Sourcing Strategies – A PVH Case Study’ – by Dr Sheng Lu, Associate Professor of Department of Fashion and Apparel Studies at University of Delaware, also hinted the same.
PVH Corporation (PVH), which owns the well-known brands like Calvin Klein, Tommy Hilfiger, Van Heusen, Arrow, and Izod, is one of the largest US fashion companies with nearly US$9.2 billion sales revenue in 2022.
By leveraging PVH’s publically released factory list, Dr Lu analysed the company’s detailed sourcing strategies and changes from 2021 to 2022.
In 2022, PVH sourced apparel items from 80 factories from China, followed by 60 from Brazil, 56 from Turkey and India each, 49 from Sri Lanka and Vietnam each, 43 from Portugal, and 40 from Bangladesh.
According to the study, PVH’s source garment factories in China are smaller than their peers in other Asian countries.
In 2022, most of the PVH’s contracted garment factories in the top Asian supplying countries, such as Bangladesh (87.5 per cent), Vietnam (63.3 per cent), and Sri Lanka (65.3 per cent), had more than 1,000 workers.
In comparison, only 11.3 per cent of its Chinese vendors had 1,000 workers, and more than 62.5 per cent had less than 500 workers.
“The result suggests that PVH treats China as an apparel sourcing base for flexibility and agility, particularly for those orders that may include a greater variety of products in relatively smaller quantities,” read the study.
PVH often priced “Made in China” apparel items higher than those sourced from the rest of Asia.
Talking to the FE, Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said Bangladesh previously did not receive the work orders of small quantities for some reasons. But now the country is getting such orders.
There are multi-skilled workers (in other countries) who do ‘tailor-shop’ work, which means each of them can manufacture 200-300 pieces.
“In Bangladesh, we have line system – based on operation or parts of a garment production. Each garment operation needs individual person and machine.”
An individual part is done by a worker, and it takes a day to perform the single operation, which is not cost effective, noted Mr Hoque, managing director of Plummy Fashions Ltd.
Besides, Bangladesh needs long lead-time of up to four months – from manufacturing to sending goods. If fabrics are imported, additional 45 days would be required.
For knit items, lead-time could be shortened by 10 to 30 days due to its strong backward linkage. But for woven items it is not the same, as most of the fabrics are imported, he added.
Sheikh H M Mustafiz, managing director of Cute Dress Industry Ltd, said his company annually exports goods worth $7.0 million. His factory, having around 550 workers, can do work orders of only 100 pieces.
Opposite to most of the local apparel exporters, it does small quantity garment orders by adding value through complex works, he told the FE.
Most of the exporters manufacture t-shirts with 100 per cent cotton. But in his factory, t-shirts are manufactured with 70 per cent cotton and 30 per cent linen, which is a complex one, Mr Mustafiz explained.
Most other units cannot do the same, as they work in a price sensitive way with large capacity. These units fall in the competition of offering reduced price rates.
“But in the small quantity orders, you can’t reduce price. Besides, we need to properly handle issues like safe workplace,” he noted.
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