I have been sharing with you the trade updates and analyses based on a number of sources, especially the official data source of Bangladesh Government the EPB, Eurostat for Europe and Otexa for the United States. Eurostat used to cover the trade data for the United Kingdom until the BREXIT took effect. So, the data we have been gathering from Eurostat after 2020 excludes U.K.’s import. Since U.K. is our third largest export market, it’s important to regularly monitor the trade development. We have started gathering trade information from U.K.’s official site and I am writing to share with you the latest information and analyses on this market.
The pre-Covid global import of clothing of U.K. was US$ 16.83 billion (880 million KG) in 2018 and US$ 16.45 billion (862 million KG) in 2019. In the year of Covid, i.e. in 2020, their import came down to US$ 15.54 billion (728 million KG). In 2021, U.K. clothing import slightly rebounded and reached US$ 14.35 billion (760 million KG), still below the pre-Covid level. In 2022, it made a solid recovery and reached US$ 17.34 billion, though quantity-wise it still remained short of pre-Covid level, i.e. 826 million KG (this was mainly due to global inflation and rise in the raw material, transportation and freight costs). Though it was much expected that the momentum of positive growth will sustain in 2023, during January-October of this year U.K.’s global import of clothing declined by 16.44% in dollar value and 12.20% in volume, compared to the same period of the preceding year. In fact the retail sales in the U.K. in 2023 portrays a bleak picture, until the holiday sales in late December. On another note, the gap between the value and volume wise changes in import suggests the persisting pressure on price level, which is concerning for us.
Now, if we look at the country-wise performance in U.K.’s sourcing list, China sits at the top followed by Bangladesh, Turkey, India and Pakistan. You may recall that in my previous email I shared with you that Bangladesh secured the position of the top clothing supplying country to Europe in terms of quantity (measured in KG) in 2022. The scenario is same for the U.K. market, as import from Bangladesh exceeded that from China in volume term in 2022 and continued during the first ten months of 2023. Thus in our trajectory toward global leadership, 2022 sets a significant landmark.
However, the share of Bangladesh in U.K.’s clothing import is 23% in monetary value and 28% in volume, which means we still have opportunities in this market. So far we have been able to secure our position through cost leadership, well timed delivery and quality, which kept us ahead in the competition. As we are nearing the saturation point and given the shift in global trade policy and competitive scenario for the next decades, gaining capacity and capability in backward and forward linkage industries, together with in value added and niche market would be the key for us to further penetrate and sustain the growth. When we say ‘higher value addition’, the term is often misinterpreted as items like outerwear, lingerie, activewear, etc. In fact, we can add higher value addition by moving to mid to higher priced segment of the market, where a T-shirt or Polo-shirt could earn higher F.O.B. for its complex processing like – advanced fabrication, embroidery, printing and even functionality.
Here I find it pertinent to mention that when we calculate the average import price of clothing by U.K., Bangladesh offers one of the lowest prices compared to the other competitors. Our average price is 21.39% less than China, 32% compared to Turkey and even 26.75% less than that of India. This does not necessarily substantiate our competitiveness, but also reveals our absence in mid-higher priced segment of the market. And going forward, we should set our strategy to explore the mid-higher priced segment, broadly.
This is quite encouraging that the economic / competitive transformation of the industry has already started, and despite all the difficulties many new factories, dealing with higher priced and higher valued items, have emerged and operating successfully. BGMEA is humbly playing its role to support the journey of this industry to break the boundary, from commodity to the niche market. The Center of Innovation, Efficiency and OSH at BGMEA is set up to foster this transformation, among many other initiatives we have taken and planning for. Such initiatives will only be successful if we, the successful individual entrepreneurs in this field, would come forward to support others using the facilities at BGMEA.
With the advent of virtual shopping and increasing hype toward pre-owned / up-cycled clothing, we are yet to see more disruptions in the retail markets. Our commitment and excellence in sustainable business practices will certainly keep us ahead, yet innovation and improvisation will be the key to our sustenance.
