Following on from our recent webinar focusing on the Bangladesh apparel industry, we interviewed panelists, Kanaiya Parekh (Expert Partner, Bain & co.), Dr. Rubana Huq (President, BGMEA) and Vivek Ramachandran (CEO, Serai) to answer some of your burning questions. Check out the insightful responses below!

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Kanaiya Parekh:

1. What will the next few years look like from a demand perspective, and how will this differ by geography?

Until there is a vaccine, we don't expect consumer confidence levels to rebound to pre-COVID levels for another 24-36 months. During this period, what we see from a consumer trend point of view is five key trends.

1. Flight to value in terms of lower price points
2. Explosion in everything digital and online
3. An increased demand for things to be delivered quicker and faster
4. Moving more towards trusted brands.
5. Change in the mix of apparel where the demand will be.

2. What will set manufacturers apart when brands and retailers review their current relationships or look for new suppliers?

Manufacturers need to be proactive rather than reactive. The winning ones are those who don’t need to be asked but they go and do the right thing. That kind of pivots around four things.

1. Value proposition: Moving out of formal wear into more health and wellness-driven categories. Providing proactive solutions to retailers on how to reduce these price points. Smaller runs for online as opposed to large runs. And again taking the front foot on reducing the time to market.
2. Digital proposition: Digital automation, leveraging tools such as 3D sampling or printing. And then providing transparency on production. It could be leveraging PLM tools.
3. Operating model and taking complexity out: Removing layers of approval, empowering their teams, faster decision making.
4. Collaboration: Building a longer term relationship as opposed to season by season.

3. You mentioned that retailers with certain business models are dying. What signals should manufacturers look out for when dealing with businesses that fall into these categories?

There are four questions manufacturers must ask to ensure retailers are changing in line with consumer trends.

1. What is the retailer’s relative market share?
2. Are they continuing to do what they have always done? Or are they diversifying their products to reflect market changes?
3. How important is moving business online?
4. Do they strip complexity, remove layers of hierarchy, and empower their teams to make decisions faster?

Dr. Rubana Huq:

1. What is your vision and roadmap for the industry in the next 3-5 years?

I would like to think that the Bangladesh RMG industry would graduate into a more value-added industry. We are placing ample focus on value addition, reskilling the workforce, and sustainability. Not only environmentally, but also for the business environment to be more sustainable and feasible.

2. How can we help the industry overcome the barriers of digital adoption? What can the BGMEA do?

For digital upscaling, we must begin with e-payments that can cover workers. We need to synchronise with the Interoperable Digital Platform for transactions that the government is launching. Not only will workers receive the payments electronically, but they will be able to transfer, get loans, buy commodities - all digitally.

In terms of reskilling, we must train our workers in different sectors. Right now, 8% of our tasks are automated, and by 2025, we will be hitting 25%.There will be some worker displacement, and we have to think about where we absorb them, and how we do it.

We have an initiative called the “Asian University for Women” which educates our RMG garment workers by taking them into universities. Literacy should be promoted and encouraged so that we use our workforce for better jobs. There's no alternative to literacy in order to reskill the workers.

Productivity must also increase. The national productivity average is only 50%, so we need to really consolidate our ways of efficiency, that's our call of the time.

3. There is a strong perception from buyers that Bangladeshi manufacturers only want to deal with big orders. What would say to buyers, and what is your advice to manufacturers?

The days of 50,000 MOQ orders are over. This is because consumers are more prone to custom made orders. Every shopper now has a separate demand. The expectation of having larger runs is going to be invalid in no time. Shorter times are encouraged, but with more value addition. Boutique orders can and should be appreciated, especially for small and medium industries. The large ones should also look to value addition, and that does not come with quantity.

Vivek Ramachandran:

1. How is Serai different from other players in this space?

Serai’s purpose is to help companies build trusted relationships with new partners. There are three key factors that I believe help us do this and differentiate us from the competition:

1. A comprehensive digital presence based on information from multiple sources: data provided by the supplier, data directly from the supplier’s systems, and data from public and third-party sources.
2. Complete control over who sees what information. This allows companies to better highlight and share their unique selling points with potential partners, as well as existing connections and thereby also strengthen established relationships.
3. Data that is verified by third parties. We are working with multiple industry players ranging from virtual sampling to inspection agencies and non-profit groups, who will all be able to act as impartial third parties validating the information provided by suppliers.

2. In recent years, many Bangladeshi manufacturers have developed sophisticated product knowledge and sustainable practices, yet are still struggling to get the right price. How can marketing practices become stronger in Bangladesh?

First of all, I would like to applaud the efforts of Bangladesh in improving both its product knowledge and sustainable practices in recent years. That being said, however, I believe for Bangladeshi manufacturers to get the right price they need to go even further. They have to take a step ahead and not wait to be led by buyers. As Mahbub mentioned during the webinar, a B2C mindset and putting themselves in the shoes of their customers is key here. They need to continue adding to their value-added services and become better at promoting the fact that they now cater to high mix low quantity orders.

But how do they achieve this? My advice is simple: build your digital presence. Hire digital marketing experts. Use the digital tools that are out there, such as Serai, to help you find new business opportunities. The time to act is now. Don’t let the opportunity go to waste.
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