Bangladesh has been a major player in the global sourcing industry for many years. The country’s export sector includes a wide range of products, including garments, leather goods, jute products, home decor, pharmaceuticals, agro and agro-processed products, plastics, light engineering products, and electronics. In recent years, Bangladesh has become an increasingly popular destination for sourcing due to its competitive prices and high-quality products.
One of the most significant sectors in Bangladesh’s export industry is the garment industry. Bangladesh is the second-largest exporter of garments in the world, with a market share of around 6.5%. The country’s garment industry has experienced tremendous growth over the past decade, and it is expected to continue to grow in the coming years. However, the industry has also faced several challenges, including poor working conditions and safety concerns. In response, the government and industry stakeholders have taken steps to improve working conditions and safety standards in the garment factories.
Bangladesh’s Export Landscape
Bangladesh is a rapidly growing middle-income country with a population of over 150 million people. The country has achieved remarkable economic growth over the past few years, with a GDP growth rate of 7.9% in 2019. The World Bank has projected that Bangladesh’s economy will continue to grow at a rate of 6.8% in 2021 and 7.2% in 2022.
The country’s export sector has played a significant role in driving economic growth. Bangladesh is the world’s second-largest exporter of ready-made garments (RMG) after China. The RMG sector accounts for around 85% of the country’s total merchandise exports. Bangladesh is also a significant exporter of services, including IT and business process outsourcing.
According to the World Bank, Bangladesh’s merchandise exports increased by 1.6% in 2020, despite the COVID-19 pandemic’s impact on international trade. The country’s service exports also grew by 4.6% in 2020. However, the country’s export growth has been uneven, with the RMG sector experiencing a decline in export orders due to the pandemic’s impact on global demand.
Bangladesh has been actively working to diversify its export base beyond the RMG sector. The government has introduced several policy measures to promote non-traditional exports, such as leather goods, jute products, and pharmaceuticals. The country is also working to improve its business environment to attract more foreign investment and promote export-oriented industries.
In conclusion, Bangladesh’s export sector has been a critical driver of economic growth, with the RMG sector being the dominant player. The country has made significant progress in diversifying its export base and promoting non-traditional exports. Despite the challenges posed by the pandemic, Bangladesh’s export sector has shown resilience and is poised for further growth in the coming years.
Key Industries in Bangladesh
Bangladesh has emerged as a major player in the global sourcing industry, with a diversified economy that offers a range of opportunities for foreign buyers. Here are some of the key industries that are driving Bangladesh’s growth:
Textile and Apparel Industry
The textile and apparel industry is one of the largest and most important industries in Bangladesh, accounting for over 80% of the country’s total exports. The industry offers a wide range of products, including t-shirts, clothing, jeans, footwear, outerwear, and trousers. Bangladesh is known for its readymade garments (RMG) sector, which is the second-largest in the world after China. The industry employs over 4 million garment workers, most of whom are women. Despite the challenges posed by the COVID-19 pandemic, the RMG sector has shown resilience and has continued to grow at an annual growth rate of 7%.
Pharmaceutical and Healthcare Sector
The pharmaceutical and healthcare sector in Bangladesh has been growing rapidly in recent years, driven by increasing demand for quality healthcare products both domestically and internationally. The sector produces a range of essential medicines, including those used to treat COVID-19, and is known for its high-quality yet affordable products. Bangladesh is also emerging as a hub for contract manufacturing of pharmaceutical products, with several international companies setting up production facilities in the country.
Agriculture and Food Industry
The agriculture and food industry in Bangladesh is a major contributor to the country’s economy, accounting for over 15% of its GDP. The country is known for its production of rice, tea, fish, and frozen food products, which are exported to markets around the world. Bangladesh has made significant progress in improving the productivity and quality of its agricultural sector, with the introduction of new technologies and farming practices.
Leather and Jute Products
The leather and jute products industry is another important sector in Bangladesh, with a long history of producing high-quality leather goods and jute products such as bags, carpets, and handicrafts. The industry has been growing in recent years, with a focus on sustainability and eco-friendliness. Bangladesh is one of the largest producers of jute in the world, and the industry is an important source of income for many rural communities.
Other Significant Industries
In addition to the above industries, Bangladesh has a number of other significant industries, including:
- Manufacturing: Bangladesh has a growing manufacturing sector, with a focus on textiles, plastics, light engineering products, electric and electronics, ICT, furniture, ceramics, and handicrafts.
- Ports: Bangladesh has several major ports that are strategically located to serve both domestic and international markets.
- Trade Partners and Market Opportunities: Bangladesh has a number of trade partners, including India, the United States, and Italy, among others. The country offers a range of market opportunities for foreign buyers, with a growing number of suppliers and manufacturers.
Virtual Sourcing Opportunities
In response to the COVID-19 pandemic, Bangladesh has launched several virtual sourcing initiatives to connect commodity and service exporters with foreign buyers. These initiatives include virtual editions of the Bangladesh Sourcing 2021 exhibition, which features virtual booths, exhibits, brochures, audio and visual presentations, live chat, virtual B2B meetings, webinars, and a buyer-seller database. These initiatives offer a life-like user experience and are designed to facilitate online sourcing and lead generation activities.
Bangladesh’s Trade Partners and Market Opportunities
Bangladesh has a number of trade partners, including India, the United States, and Italy, among others. The country offers a range of market opportunities for foreign buyers, with a growing number of suppliers and manufacturers. The Bangladeshi government is committed to improving the country’s production standards and quality control measures and has invested heavily in developing a skilled workforce and improving access to raw materials. As a result, Bangladesh is becoming an increasingly attractive destination for sourcing quality products at competitive prices.
Challenges and Future Prospects
Bangladesh has made significant progress in the sourcing market over the past decade, particularly in the ready-made garment (RMG) industry. However, there are still several challenges that need to be addressed to ensure sustained growth and development in the future.
One of the most significant challenges is the country’s workforce. While Bangladesh has a large labor force, there are concerns about the quality of education and skills training. The government has taken steps to address this issue by investing in education and vocational training programs, but more needs to be done to ensure that workers have the necessary skills to meet the demands of the sourcing industry.
Another challenge is infrastructure. While there have been improvements in recent years, particularly in transportation and energy, there is still a need for further investment in infrastructure to support the growth of the sourcing industry. This includes improvements in ports, roads, and telecommunications.
English language proficiency is also a concern in Bangladesh. While many workers in the sourcing industry have basic English skills, there is a need for more advanced language training to enable workers to communicate effectively with international buyers and suppliers.
The capital city of Dhaka is the hub of the sourcing industry in Bangladesh, but there are concerns about the city’s infrastructure and congestion. The government is investing in projects to improve transportation and housing in Dhaka, but more needs to be done to ensure that the city can support the growth of the sourcing industry.
The construction of the Padma Bridge is expected to provide a significant boost to the sourcing industry in Bangladesh by improving transportation and reducing costs. The bridge will connect the southwestern region of the country to the rest of the country, making it easier to transport goods and materials.
Finally, there is potential for growth in the home decor and home-textiles sectors in Bangladesh. While the RMG industry has been the main focus of the sourcing industry in Bangladesh, there is growing interest in other sectors. The government and industry leaders are working to promote investment in these sectors to diversify the sourcing industry and create new opportunities for growth.
Overall, while there are challenges to be addressed, the future looks bright for the sourcing industry in Bangladesh. With continued investment in education, infrastructure, and language training, Bangladesh has the potential to become a major player in the global sourcing market.
Frequently Asked Questions
What are the advantages of sourcing from Bangladesh?
Bangladesh is the second-largest garment exporter in the world, making it a popular destination for sourcing. The country offers several advantages, including low labor costs, a large workforce, and a favorable trade policy. Additionally, Bangladesh has a well-established textile industry and a robust supply chain network, making it an attractive option for buyers.
What is the process for buyer sourcing in Bangladesh?
The process for buyer sourcing in Bangladesh involves identifying potential suppliers, negotiating prices and terms, and conducting factory audits to ensure compliance with ethical and safety standards. Buyers can work with sourcing agents or visit trade shows and exhibitions to find suppliers. Once a supplier is selected, the buyer can place an order and work with the supplier to ensure timely delivery of goods.
What are the risks associated with sourcing from Bangladesh?
There are several risks associated with sourcing from Bangladesh, including poor working conditions, low wages, and human rights violations. Additionally, the country is prone to political instability and natural disasters, which can disrupt supply chains and lead to delays in delivery. Buyers must conduct due diligence to ensure compliance with ethical and safety standards and mitigate these risks.
How does sourcing from Bangladesh impact garment workers’ salaries?
Sourcing from Bangladesh can have both positive and negative impacts on garment workers’ salaries. While low labor costs make Bangladesh an attractive destination for buyers, it also means that workers may be paid less than a living wage. However, sourcing from Bangladesh can also create jobs and provide economic opportunities for workers, which can lead to increased wages and improved living standards over time.
What are the challenges of sourcing from Bangladesh?
Sourcing from Bangladesh presents several challenges, including language barriers, cultural differences, and logistical issues. Additionally, navigating the country’s complex regulatory environment can be challenging for buyers. Buyers must also ensure compliance with ethical and safety standards, which can be difficult in a country with a history of labor rights violations.
What percentage of global garment production comes from Bangladesh?
According to the World Trade Organization, Bangladesh accounted for approximately 6.4% of global garment exports in 2019, making it the second-largest garment exporter in the world after China. The country’s garment industry employs over 4 million workers and generates significant revenue for the economy.