COVER STORY to pick pace , thanks to the growing penetration of internet users , higher income levels and stronger purchasing power and cross-border sales . As per the report , cross-border internet retailing continued to drive internet retailing in Russia in 2017 .
This retail boom has opened the floodgates for apparel exporters from around the globe . In the backdrop of rising fabric prices and the fact that local manufacturers cannot produce enough to cater to the burgeoning demands , Russia has been traditionally dependent on overseas players to feed its domestic requirement . China , in particular , has played a significant role in fulfilling its mass market ( segment ) demand .
Bangladesh , Vietnam to gain ?
Even though a major exporter of apparel items to Russia , still rising labour cost is taking the sheen of China ( according to China ’ s National Bureau of Statistics , there has been a near double digit increase in the national average annual wage for urban employees since 2004 ) as a sourcing destination . This has opened up the avenues for the other players . Increasing by over 30 per cent year-on-year , Vietnam is aiming to take its apparel export to 10 per cent of the country ’ s total export to Russia ( which currently stands at 2 %), thanks to the FTA with Eurasian Economic Union ( which came into force in October 2016 ). Bangladesh , on the other hand , riding high on its price competitiveness , cheap labour and huge capacities , is making steady inroads into the Russian market to already become the second biggest apparel exporter to Russia , after China .
At present , Vietnam exports around US $ 320 million worth of apparel each year to Russia , which is expected to exceed US $ 1 billion in the next few years while Bangladesh ’ s apparel export to Russia stood at US $ 379.41 in FY 2016-17 , marking an impressive year-on-year growth of 52.2 per cent ( according to BGMEA & International Trade Centre , ITC ).
China is still a dominant force in the Russian market , exporting apparel worth US $ 2.14 billion ( as in 2016 ) while another Asian exporting hub , India , exported apparel worth US $ 188 million , as in 2016 , to Russia .
“ At the moment I would say Russia is one of the most attractive markets …,” maintains Maksym Sukhanov – General Director , Maximum Sourcing , a Vietnam-based exporter , who supplies outerwear , jeans , woven & knit items and swimwear to the tune of US $ 5-10 million annually to names such as Melon Fashion Group , Modis , 12Storeez , etc .
Maksym ’ s optimism is also shared by BGMEA President Siddiqur Rahman , who earlier speaking to Apparel Online maintained , “… Of all the potential markets , we consider Russia as the biggest market for us . We have requested the Government to seek out facility of duty-free entrance into this huge market ”.
Keeping pace with the apex garment exporter body ’ s appeal , Bangladesh Commerce Minister Tofail Ahmed recently discussed with Russian authorities on the prospects of dutyfree market access .
“ I have requested Russia to give duty-free , quota-free market access to all Bangladeshi export products , including RMG , as per the decision of the ministerial conference of World Trade Organization ,” the Minister maintained .
Hoping to make early progress in this direction , Bangladesh has also signed a memorandum of understanding with the Eurasian Economic Commission , awaiting for its membership approval , which would pave Bangladesh ’ s way for duty-free market access to Russia .
[ Eurasian Economic Commission ] EEC is the executive body of the Eurasian Economic Union responsible for implementing decisions , upholding the EEU treaties and managing the dayto-day business of the Eurasian Economic Union .
Once a part of EEC , Bangladesh automatically qualifies for duty-free and quota-free market access to Russia , which along with Armenia , Belarus , Kazakhstan and Kyrgyz Republic forms the EEU Bloc .
“ We are working for the Russian market for more than 10 years now ; currently we are doing women ’ s dress for brand Outventure … The dissolution of LC between Russia and Bangladesh have definitely opened up new opportunities for the garment exporters here ,” opined www . apparelresources . com | MARCH 2018 | Apparel Online Bangladesh 15