LightCastle Analytics Wing
Establishing a Virtual Marketplace Platform for the Apparel Sector
Securing over 80 percent of the country’s total export, the apparel sector of Bangladesh has been spearheading the country’s economic growth. Currently, the second largest apparel exporter in the world, Bangladesh’s apparel sector has been driven by its cost competitiveness through cheap affordable labor and trade benefits subject to being an LDC over the past four decades.
However, with the global shift in apparel consumer dynamics through globalization and technology adoption, Bangladesh needs to expand into new value-adding segments through improved production efficiency and business development strategies to maintain its international foothold.
Subsequently, other competing apparel exporting countries such as China and Vietnam have gradually incorporated technology and ensured their virtual presence in the global market to secure their market share by increasing direct accessibility of the consumers to these markets.
Furthermore, over the past decade, the global apparel and fashion industry’s consumer dynamics has been shifting from seasonal changes in apparel towards a more fast-paced fashion. Subsequently, major fashion brands, who previously practiced low-cost sourcing practices are now shifting towards production hubs with higher production efficiency and lower lead time.
Countries such as Bangladesh who were previously benefitting from its advantageous offering of cheap cost labor are now losing out on its cost-advantageous position.With the aim to secure and further strengthen the foothold of Bangladesh’s apparel sector in the global market, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is looking to capture the change in trend and establish themselves on a virtual marketplace.
The virtual platform will act as a viable option for optimizing logistics, boosting sales, streamlining revenues, designing an efficient cost structure and pricing model, fueling innovative strategy for customer acquisition, predicting trends, and managing inventory for building a durable supply chain. Technological integration will help synthesize the whole textile industry with the global value chain and is a way out of the present turmoil.
Thus, LightCastle conducted a feasibility study for establishing a virtual marketplace for the apparel sector of Bangladesh by analyzing policy gaps, market potential, and readiness of the sector. The future of the apparel sector is dependent on sustenance through two value streams: (1) Expansion of existing business, into new markets and new buyers, to increase the overall value and volume of exports or (2) Increased value generation by directly connecting the Bangladeshi apparel produces to the end customers/consumers for greater margin on the same volume.
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