Apparel Online Bangladesh Magazine September Issue 2018 | Page 14

COVER STORY
India, an emerging market ...
Next EU or US for
Bangladesh?
Export figures & growth rate, retail boom point towards increased importance of
India from Bangladesh’s perspective
F
ormer Governor of the
Bangladesh Bank, Dr Atiur
Rahman, recently observed that
Bangladesh’s export to India
can potentially rise by 300 per
cent. His observations are not
without reasons.
As per experts, India is at the
threshold of a retail revolution.
Change in income structure, rise
of middle class with increasing
disposable income, steady economic
growth, entry of foreign retailers,
increase in both per capita
consumption and average spending
on apparel, are some of the factors
which are expected to fuel this retail
boom. No wonder the Indian retail
market, which was worth US $ 641
billion in 2016 is expected to touch
an overwhelming US $ 1,576 billion
by 2026, growing at a Compound
Annual Growth Rate (CAGR) of 10
per cent, while the fashion retail
market (currently US $ 50 billion)
is expected to grow at a promising
CAGR of 7.7 per cent to reach US
$ 104 billion by 2027.
With a GDP growth rate of 7 per cent,
India after all, holds an edge over the
developed markets of the US, Europe
and Japan (which are expected to
grow at a rate of 2-3 per cent only).
Currently,
menswear is the
biggest segment
within the
India apparel
market and is
estimated to
increase at a
CAGR of 9 per
cent to reach
US $ 39.6 billion
by 2023.
This is opening up a new window
of opportunity for the Bangladeshi
apparel exporters who are keen
to capitalise on this burgeoning
prospect to diversify markets
and minimise dependence on the
traditional export destinations of
US and EU to propel growth.
Global retail giants like H&M
and Walmart have also joined the
bandwagon and started sourcing
from Bangladesh to cater to the
Indian consumers, with many more
following suit.
Currently, menswear is the biggest
segment within the Indian apparel
market and is estimated to
increase at a CAGR of 9 per cent
to reach US $ 39.6 billion by 2023.
Shirts, trousers, denim, etc. largely
dominate this segment but there
are also categories like winterwear,
innerwear, T-shirts, suits, etc,
which too, hold a lot of promise.
With an increase in fashion-
consciousness and growing number
of working women, the womenswear
section is expected to rival the
menswear domain in near future.
The Bangladesh advantage…
Interestingly, Bangladesh is very
strong in the categories that
14 Apparel Online Bangladesh | September 2018 | www.apparelresources.com
Indian retail is growing in and the
results are there for everyone to see.
Bangladesh’s apparel exports to
India saw a steep climb during the
July-March 2018 period – amounting
to an increase of more than double.
As per BGMEA data, apparel
export to India saw an increase
of 111 per cent (on a point-to-
point basis) in this time period. In
monetary terms, the total apparel
export amounted to
US $ 218 million, what was
US $ 97 million at the same time
last year, while as per Bangladesh’s
Export Promotion Bureau,
between July and December last
year, garment shipments to India
increased 5.99 per cent year-on-year
to fetch US $ 111.33 million.
From category perspective, the
top five products to be exported
to India are Trousers, Shirts,
T-shirts, Jackets & Blazers and
Sweaters. An analysis of the needs
of the Indian market indicates that
Bangladesh is filling a gap in those
product categories that Indian
manufacturers have failed to be
competitive in. A closer look at
these categories in terms of market
size indicates that the potential for
further growth is still huge.