Apparel Online Bangladesh Magazine November Issue 2018 | Page 20

EXPORTER PERSPECTIVE
Hydroxide Knitwear Ltd. going
‘East’ for market expansion
E
urope and USA have long been the
traditional export destinations for
garment exporters from Bangladesh.
Call it the trade benefits, quota
facilities or demand and volume
requirements, these two places have
always been the ‘mostsought-after’
overseas markets for the country.
However, with changing times, USA
has revoked the GSP facility after
the tragic Rana Plaza incident while
despite the trade benefit, increased
competition from other manufacturing
hubs and decreasing margins, has
shorn Europe of its past appeal
among many exporters. Garment
manufacturers from Bangladesh are
therefore now actively looking at
market diversification.
Catering to a host of clients in
Europe namely Debenhams, Zara,
Burberry, Vero Moda, Walmart,
Pull&Bear etc., in diverse range of
sweaters, pullovers, cardigans, and
other knit products from wool, cotton,
acrylic, rayon and blended yarns,
Hydroxide Knitwear Limited is now
planning to look beyond its erstwhile
stronghold, Europe.
“We are now planning to look East
rather than concentrating only
on the West. We see Japan, South
Korea, China, etc., as markets with
great potential,” underlined Omar
Chowdhury, Managing Director
of Hydroxide Knitwear Limited
speaking to Apparel Online.
Omar’s ‘Look East’ policy stems
as much from the huge potential of
the market concerned as it does for
other reasons. “The retail industry
in Europe is undergoing a huge
transformation; almost everything is
going online as people prefer to buy
sitting at the comfort of their homes
rather than visiting the stores,”
explained Omar, adding, “That apart,
I also have a feeling that the buying
capacity of the European retailers is
also on the wane. Most of the retail
stores are now selling their products
Omar Chowdhury, Managing Director of Hydroxide Knitwear Limited
“The retail
industry in
Europe is
undergoing
a huge
transformation;
almost everything
is going online as
people prefer to
buy sitting in the
comfort of their
homes rather
than visiting the
stores.”
– Omar Chowdhury
on discounts. Even the end customers
have become very price-sensitive. We
as manufacturers are now feeling
that pressure …whereas on the other
hand, the middle-class in countries
like South Korea, China and Japan
is not only increasing but their buying
capacities have also
increased substantially.”
Japan, world’s third largest economy
with a population of 127.1 million and
GDP per capita (PPS) of US $ 36,194,
Japan is emerging as a very promising
market for Bangladesh, to say the
least. As per data from the Export
Promotion Bureau (EPB), in the fiscal
year 2017-18, Bangladesh earned
US $ 1.13 billion from exports to
Japan, which is 11.73 per cent higher
compared to earnings of US $ 1.01
billion in FY ’17.
Out of US $ 1.13 billion, US $ 846.73
million or 74.8 per cent came from
the RMG sector alone with apparel
export to Japan witnessing a 13.73 per
cent rise compared to previous year’s
earnings of US $ 744.48 million.
Also to be noted that apparel market
in Japan is expected to reach US $
92.40 billion by 2021. At the beginning
of 2018, the clothing market amounted
to US $ 87.32 billion with expected
annual growth of 1.9 per cent.
As far as China is concerned,
according to a Euromonitor forecast,
the country is expected to overtake
20 Apparel Online Bangladesh | November 2018 | www.apparelresources.com
United States to become the largest
apparel market by 2019 globally (by
then, the annual apparel sales in
China is pegged to touch US
$ 3,33,312 million). Keeping pace with
this, Bangladesh has been making
steady inroads into China. Currently,
China is Bangladesh’s second largest
export hub among the Asian nations
after Japan. As per EPB data, in
fiscal 2017-18, Bangladesh exported
garment items worth US $ 391.64
million to China while the figure stood
at US $ 391.60 million in fiscal 2016-
17. China’s demand for basic garment
items is high, as its manufacturers
mainly concentrate on high-end
products for upscale Western markets.
This has resulted in further rise of
Bangladesh’s garment export to China
over the last few years.
Even the President of the country’s
apex exporters’ body, BGMEA,
seems very optimistic about China.
“Exploring new markets has become
very critical for growth; there is a big
market each in Russia and China...We
know China has a very big domestic
market. Despite their significant
global presence, we can find some
space there for us,” Siddiqur Rahman
had briefed to Apparel Online earlier.
South Korea too is a rather interesting
exporting destination for the country
as it has been a pioneering country
to invest in the RMG sector of
Bangladesh in the early days, and
even shares a close bilateral relation
with a host of Korean manufacturers
setting up their units in various EPZs
of Bangladesh.
As per EPB data, in July to June
period of FY ’17-18, Bangladesh
exported apparels worth US $ 191.97
million to Korea Republic (South
Korea), which is up by 16.47 per cent
from the July to June period of FY ’16-
17, when it exported garments worth
US $ 164.82 million.
The Bangladesh Government’s recent
decision to raise cash incentives for
garment exporters to 4 per cent from
3 per cent, for markets other than the
US, Canada, and the European Union
for financial year 2018-19 seems
to have added that extra element
of interest, thereby driving the
exporters to foray into non-traditional
destinations for market diversification
even more aggressively.