Bangladesh Could See $500 Million From Online Marketplace, Says BGMEA President
Bangladesh’s garment industry is poised to capture market share from the United States, EU and Africa. And Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan said that virtual marketplaces will be the key to that growth.
Hassan addressed stakeholders in the industry after BGMEA released the results of a study exploring the development of a virtual commerce platform for the textile and apparel sector in Bangladesh.
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“We have well realized the significance of the virtual marketplace during the lockdowns during Covid-19,” Hassan said.
According to BGMEA’s study, Bangladesh has the potential to claim 0.2 percent of the U.S. market share, 0.1 percent of the EU an 0.75 percent of the African market share for textiles and apparel virtual markets by 2027, a gain of around $489 million. That would bring Bangladesh’s garment industry to a combined total of approximately $308 billion.
“The report serves as an important reference for the industry in its journey forward to tap our potential in the virtual market,” Hassan said. “I hope the policymakers and entrepreneurs will make the most use of it to get to the next step.”
Hassan pointed to regulatory framework limitations in Bangladesh as roadblocks to capitalizing on the potential of virtual marketplaces. He said the country lacks global payment gateways and faces challenges such as financing issues, complex export processing and other policies that stand in the way of establishing a robust digital marketplace like those in other countries.
“The National Digital Commerce Policy of 2018 only governs the domestic market, and does not make any explicit policy framework addressing international e-commerce,” Hassan said.
That policy states that foreign e-commerce ventures are not allowed to operate in Bangladesh without forming joint ventures with local companies. And according to the policy, any company operating an e-commerce marketplace in Bangladesh cannot have a more than 49 percent stake controlled by foreign investors.
Bangladesh is the second-largest apparel exporter after China, according to the World Trade Organization. Last year, the country exported $47.4 billion in total apparel, according to the Bangladesh Export Promotion Bureau. And the garment sector accounts for 83 percent of total export earnings in Bangladesh, according to the BGMEA.
The nation recently has battled with China to be the top exporter of readymade garments to the United Kingdom, sending more than 178 million kilograms (392 million pounds) of garments to the UK during January-October 2023.
Hassan said that additional studies on logistics, revenue and foreign exchange policies, branding and distribution may be necessary to establish a successful digital commerce platform. He added that for Bangladesh’s garment industry to remain competitive in a rapidly changing marketplace, expanding the country’s presence in e-commerce is essential.
“If we want to maintain our position in the global competition ahead, we need to develop a comprehensive business model,” he said.
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