Over the past 17 years, Bangladesh has witnessed a remarkable surge in its share of the global readymade garment (RMG) trade, solidifying its position as one of the world’s leading suppliers. According to data from the World Trade Statistical Review 2023, the country’s share in the global RMG trade has more than tripled from 2.5 percent in 2005 to an impressive 7.9 percent last year.
This tremendous growth can be attributed to several factors that have driven the expansion of Bangladesh’s RMG sector during the past two decades. One significant strength has been the rapid growth of the primary textile sector, which has attracted investments of over $23 billion. As a result, the knitwear segment now sources more than 90 percent of its fabrics and yarn domestically, reducing lead times by four weeks. Similarly, woven exporters can procure over 40 percent of their fabrics locally, and the accessories sector meets 90 percent of its demands domestically.
Another contributing factor has been the China-US trade tension, which has benefited Bangladesh. While China’s share in the global apparel business has seen fluctuations (18.2 percent in 2000, 26.6 percent in 2005, 36.6 percent in 2010, and declining to 31.7 percent in 2022), Bangladesh’s share has continued to expand, with China gradually losing its grip.
Notably, Bangladesh has managed to increase its market share despite facing challenges such as raw material shortages, including cotton and capital machinery, as well as recurring energy challenges. Nevertheless, Bangladesh has emerged as the largest apparel supplier to the European Union in terms of volume and the leading denim supplier worldwide.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, highlights that exporters are also benefiting from better prices, with garment items fetching 10 to 30 percent higher prices per unit, especially for high-end value-added items.
Experts attribute Bangladesh’s success to various factors, including skilled workforce and managers, improved productivity, faster delivery, enhanced quality, and a growing focus on green initiatives.
Despite facing domestic and global crises such as the elimination of the quota system, the financial crisis of 2007-08, the Tazreen Fashions fire, the Rana Plaza building collapse, and political instability, the garment sector’s resilience has been attributed to the commitment of entrepreneurs.
Bangladesh’s reputation as a reliable supplier received a boost during the peak of the COVID-19 pandemic when the country kept its factories open, while competitors faced prolonged closures.
Looking ahead, exporters are optimistic about further increasing market share through diversification into new products and markets. Bangladesh aims to raise its market share to 10 percent by 2025, focusing on growing Asian markets such as Japan, India, South Korea, and Australia.
While surpassing China’s dominance in the global apparel trade remains a significant challenge, local exporters have already outperformed their competitors in China and aim to replicate this success in other markets. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has set ambitious targets to achieve export earnings of $100 billion and a market share of 14 percent by 2030, focusing on Asian markets and the use of man-made fiber-based garments, which command higher prices than cotton-made products.
Despite the positive outlook, challenges such as gas and power crises still hinder reaching the full export capacity, but the industry remains optimistic about overcoming them and continuing its upward trajectory in the global RMG trade.
