Establishing a Virtual Marketplace Platform for the RMG Sector

On 25th of January 2024, BGMEA launched the report of a comprehensive feasibility study, as a precursor to developing a virtual marketplace tailored for Bangladesh’s Textile and Apparel Sector. The study is funded by IFC’s Partnership for Cleaner Textile (PaCT II) program and supported by the government of Denmark through the Danish International Development Agency (DANIDA).

Faruque Hassan, President of BGMEA, Shahidullah Azim, Vice President, BGMEA, Directors of BGMEA Abdullah Hil Rakib, Navidul Huq and Md. Imranur Rahman, Shovon Islam, Chair of BGMEA Standing Committee on Press, Publication and Publicity, Mohammed Kamal Uddin, Chair of BGMEA Standing Committee on Trade Fair, and Chair of BGMEA Standing Committee on UD-Woven & Knit Md. Nurul Islam attended the event.

The launch event was also attended by Nishat Shahid Chowdhury, Program Manager IFC-Pact, and key officials from LightCastle Partners, including Zahedul Amin, Co-founder and Director, Dipa Sultana, Senior Business Consultant and Project Manager, Priyo Pranto, Business Consultant and Naziba Ali, Business Analyst.

The report meticulously identifies market potential and sector readiness to digitize the apparel sector of Bangladesh. The study also proposes sustainable business models along with policy gaps, and necessary requisite strategies essential for the successful implementation of the marketplace.

The primary objective of the virtual marketplace is to integrate the local textile industry into global value chains and capitalize on the shift toward online purchasing.

The report emphasizes two critical strategic approaches for the sustained success of the apparel sector: (1) Expansion of current Business-to-Business (B2B) activities into emerging markets like Asia and the Middle East and (2) Creation of additional value by establishing direct connections between Bangladeshi manufacturers and end customers (B2C), thereby achieving superior profit margins and increased volume of business.

Nevertheless, in contrast to the well-defined National Digital Commerce Policy of 2018 governing the domestic market, there exists no explicit policy framework addressing international e-commerce. To elaborate, the absence of global payment gateways, challenges in securing working capital financing, cumbersome export processing for small orders, and an impractical return policy (where returns are categorized as imports) constitute substantial impediments to establishing a robust digital marketplace.

The report delves into policy gaps, market potential, the virtual marketplace’s potential to serve as a central hub for stock lots and the sector’s readiness for such a transformation. The outcome aims to provide a business model and an action plan, outlining the requisite strategies for the successful implementation of the virtual marketplace.