Apparel Online Bangladesh Magazine January Issue 2019 | Page 10

EDITOR'S PICK - 2018
Non-traditional < <
<< & Emerging
Markets
At a time when every exporter is expanding
his reach, unconventional and upcoming export
destinations seem to have played an important
role in stamping Bangladesh’s authority and
dominance as the global sourcing hub in 2018.
Some of the markets, if trends are something
to go by, could emerge as viable alternatives
for Bangladesh vis-à-vis the traditional
export strongholds. Given here
are the editorial excerpts.
Minimum < <
<< New Wage
Even as I wrote this column, the issue of
new minimum wage still continues to create
ripples in the industry with reports of scores
of factories, especially in the manufacturing
hubs of Ashulia and Narayanganj, stopping
production owing to workers’ agitation on
new minimum wage.
September 2018
For years, the industry
has been talking about
developing newer markets to
counter the slowdown and
stagnation in the traditional
markets of the US and
Europe. And now it is finally
happening… Among the
markets being considered are
China, Japan and India. All
three countries have a trade
agreement with Bangladesh,
and many companies are
already exploring the
potential of each. Of course,
Japan is still the most difficult
as the market is small and
the products required are
very high-end, both in
quality and design. The real
focus today is on China and
India…, there are pluses and
minuses of both. While many
argue that Chinese market is
more organised, it cannot be
denied that the cultural and
language difference is a huge
challenge. Also, the Chinese
market is fed by a huge local
domestic manufacturing set-up;
March 2018
The country has thrived
on this strength and
understandably, today the
industry is worried about
the rising wages and its
far-reaching implications. Of
course, this had to happen
one day, as international
labour organisations have
been pushing for higher
wages and better worker
facilities, since long… While
the top exporters and a
majority of the middle ones
are compliant to international
norms, the issue of how much
wage is a ‘good and fair’
wage, is still a debate.
October 2018
The long-standing issue of
workers’ wage seems to
have ultimately been sorted
out after State Minister for
Labour and Employment
10 Apparel Online Bangladesh | January 2019 | www.apparelresources.com
besides, the international
market is also looking at
the growing local market,
hence there is competition in
many categories. The same
is not true in case of India.
In fact, working with India,
is almost like doing business
with a brother…; the basic
ethos is the same and most
Bangladeshi exporters are
comfortable travelling to the
country. Many are familiar
with the growing retail
market, visiting the country
often for short shopping
sprees. The Indian brands/
retailers too understand the
significance of sourcing from
Bangladesh…
November 2018
What was heartening for
me to note was that India,
which is a strong ally of
Bangladesh and has been
with it through the thick and
thin, is emerging as a strong
export destination for the
former. Bangladesh’s apparel
exports to India continued to
Mujibul Haque recently
declared that Taka 8,000
has been decided as the
minimum wage for the 3.6
million labour force, to be
implemented from December
this year. Amidst all the
wrangling – workers’ bodies
and NGOs joining hands
demanding Taka 12,000 as
base wage, which many felt
would put tremendous strain
on the apparel makers, who
are already under duress
due to faltering price points
– the Government’s move
to decide on the minimum
wage, I feel would bring
back sanity and order to
the apparel sector, to carry
on with business as usual.
According to what could
be known, the basic pay in
the Taka 8,000 minimum
wage structure is Taka
4,100. Further breakdown
skyrocket with 167 per cent
growth during the first three
months of fiscal 2018-19;
reminding once again, as to
how big the neighbouring
market’s potential is.
According to EPB figures,
apparel exports to India
stood over US $ 145 million
during July-September 2018,
which was US $ 54.3 million
during the same period in the
last fiscal year. Overall, the
export earnings from India
grew to US $ 375 million in
the first three months of the
current fiscal year as against
that of US $ 155 million in the
corresponding period of last
fiscal. At the cusp of retail
revolution with fashion retail
market (currently at US $ 46
billion) expected to reach
US $ 115 billion by 2026
growing at a promising CAGR of
9.7 per cent, India as a market,
if exploited well, in my opinion,
has the potential to make up
for many of the conventional
export destinations from
Bangladesh’s perspective.
includes Taka 2,050 as house
rent, Taka 600 as medical
allowance, Taka 350 as
transport allowance and Taka
900 as food allowance.
November 2018
One concern that still
bothers me is the issue of
new minimum wage, which
seems to have failed to find
wide acceptance amongst
the stakeholders, with many
still denouncing the same
terming it as ‘inadequate’
so much so that BGMEA
had to call upon all to come
forward and help the industry
in implementing the new
pay structure. With the New
Year just round the corner, I
hope the issue gets sorted
out sooner than later to allow
the industry to continue with
its dream run and touch new
heights in days to come.