Looking to source fabric online for your apparel business? Well, then the Bangladesh garment industry should be on your radar. The South Asian country has the world’s second-largest readymade garment (RMG) industry. Their labour costs are relatively low. And they’re making significant progress toward becoming one of the most technologically advanced garment manufacturing nations in the world.
As an apparel buyer sourcing online, that last point is big. It means Bangladesh is heading in the right direction of becoming the digital solution to the long-held problem of finding quality, convenience, and low-costs all in one place.
But we know you’ll need a bit more information if it’s your first time sourcing fabric online from Bangladesh. That’s why, in this post, we’re going to look at:
Let’s dive right in.
Before you begin fabric sourcing online, it’s important to know how skilled the sourcing destination is with using online communication technologies.
What makes us think Bangladeshi suppliers are equipped to fulfill your online fabric sourcing needs? Well, as we’re about to show you, there are a lot of promising initiatives and growth driving the wide-scale adoption of digital communication tools in Bangladesh as we speak.
Bangladesh’s government isn’t shy about supporting a push towards becoming a technologically advanced nation ready for the Fourth Industrial Revolution. One example of this is the government’s support for Digital Bangladesh, a program that has a vision of transforming Bangladesh into a full-fledged digital economy by 2021.
2017 Overview of Digital Bangladesh from the Centre for Research and Information
While it’s unclear whether that 2021 goal is still feasible given 2020’s pandemic-related setbacks, the current vision looks ahead to 2050. One of the ways the government continues to move forward is through investments in the information and communication technology (ICT) sector, both in infrastructural development and talent.
What does the Bangladeshi government’s support for digital innovation mean for you? Reassurance. It’s reassurance that efforts to improve and simplify international trade online between you and local manufacturers are a national priority.
In support of Digital Bangladesh, the Bangladeshi Government has also made developing a skilled and digital-ready workforce one of its top priorities. They’ve done this by implementing multiple dedicated training programs for aspiring professionals in the information technology (IT) and information technology-enabled services (ITES) sectors.
These initiatives aid an already impressive history of skilled workers in Bangladesh. According to the Oxford Internet Institute’s 2017 Online Labor Index, Bangladesh had the second largest pool of online workers in the world.
As someone looking online for reliable sourcing partners abroad, it’s easy to see the positive implications here. It means that a large portion of Bangladesh’s workforce is already well equipped - especially compared to other popular sourcing locations in Asia, like Vietnam and Indonesia - to use new and existing digital communication technologies for trading with apparel brands and retailers abroad..
In January 2020, DataReportal reported a 9.5% increase in internet users in Bangladesh compared to January 2019. And the United News of Bangladesh points out that Bangladesh is ahead of both India and Sri Lanka in terms of ICT adoption.
Also promising is the country’s growth in the e-commerce sector. In 2020, it marked growth of around 166%. And it’s projected that, by 2023, Bangladesh’s e-commerce market size will be $3 billion.
Bangladesh’s increased adoption and familiarity with e-commerce are on trend with the rest of the world. According to McKinsey & Company’s recent study, “The State of Fashion in 2021,” in 2020, “e-commerce’s share of fashion sales nearly doubled from 16 percent to 29 percent globally, jumping forward six years’ worth of growth.”
Why is this important for you? The adoption of digital technologies and online platforms for B2B transactions means that some manufacturers are starting to embrace the needs and business models of buyers in the West.
Bangladesh and its garment industry have made significant strides towards the full-scale adoption of digital tools that make it a reliable online fabric sourcing destination. But there’s still some work to do.
To fully understand and manage the risks involved, you should be aware of the following areas that still need improvement.
As an apparel buyer, you know that sourcing from a manufacturer with long lead times can be a frustrating and time-consuming problem. This year’s e-commerce boom has shown that reducing lead time is a current challenge for Bangladesh’s garment industry, particularly for buyers making small size orders.
Still, the fact that local manufacturers are aware of this issue is a good sign. Why? Because it means Bangladesh’s garment industry knows they’ll need to adopt new technologies to keep up with the rest of the world. And they have a history of doing just that when needed to do things like lower production times or become more environmentally sustainable.
According to Md. Fazlul Hoque, managing director of Plummy Fashions, “Since online sales will continue to prosper while physical retailers struggle, we have to change tack and move to cope with the new trend for digital platforms.”
One potential solution could be the adoption of already existing technologies. For example, Alibaba’s Xunxi Digital Factory has designed a laser cutting machine that uses AI vision technologies that have led to a 75% reduction in lead time.
The adoption of digital payment systems means reduced operational costs and production times as well as increased transparency.
This is why organisations such as the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) wants all workers in the RMG industry to be paid under a cashless, digitalised payment system by 2021.
The Covid-19 pandemic initially pushed manufacturers towards making this a reality. According to Dhaka Tribune, 2.5 million workers opened mobile financial service (MFS) accounts to receive digital payments in April.
However, it looks like that spike in digital payments was short-lived and more so the result of the government’s mandatory payment of stimulus package payments through MFS. Once that mandate ended, there was a significant drop (40%) in digital payments and a return to more traditional forms of payment.
Still, the fact that digital payment systems are already in place and familiar to workers provides hope for the future. According to Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), an important next step for the industry will require the government to retrain and help the industry adopt digital payment systems while prioritising workers' rights.
Finding a reliable supplier to source from isn’t always easy. And finding one online brings new challenges, especially if you’re used to sourcing in person from trade shows. So, how do you do it? How do you find and build a network of quality suppliers to source fabric from?
It’s actually quite easy if you know where to look. That’s why we’d encourage you to learn more about Serai. We’re a B2B network for the apparel industry that helps you easily connect with reliable and trustworthy manufacturers and suppliers worldwide.
Our platform allows you to search for suppliers that meet your specific needs, read through relevant information about the company, find reliable business partners through mutual connections, and much more.
Or, if you’re still hoping to learn a bit more about sourcing from Bangladesh before signing up, be sure to also check out:
- “Where are online workers located? The international division of digital gig work | Oxford Internet Institute.” 11 July 2017.
- Oxford Internet Institute
- “DIGITAL 2020: BANGLADESH | DataReportal.” 17 Feb. 2020, https://datareportal.com/reports/digital-2020-bangaldesh. Accessed 12 Jan. 2021
- “E-commerce market will be $3 billion big by 2023 | United News of Bangladesh.” 03 Nov. 2020, https://unb.com.bd/category/Business/e-commerce-market-will-be-3-billion-big-by-2023/59910. Accessed 12 Jan. 2021
- “The State of Fasion 2021 | McKinsey & Company.” 01 Dec. 2020, https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion. Accessed 12 Jan. 2021
- “Technology to define future of Bangladesh apparel industry | Textile Today.” 09 May 2019, https://www.textiletoday.com.bd/technology-define-future-bangladesh-apparel-industry/. Accessed 12 Jan. 2021
- "WANTED: SHORTER LEAD TIME | Dhaka Tribune." 10 Dec. 2020, https://www.dhakatribune.com/business/2020/12/10/wanted-shorter-lead-time. Accessed 12 Jan. 2021.
- "Alibaba's Xunxi Digital Factory Reimagines Manufacturing ...." 18 Sep. 2020, https://www.alizila.com/alibaba-xunxi-digital-factory-reimagines-manufacturing/. Accessed 12 Jan. 2021.
- “Bangladesh: 90% of garment workers to receive digital wages by 2021 | Business & Human Rights Resource Centre.” 20 Nov. 2019, https://www.business-humanrights.org/en/latest-news/bangladesh-90-of-garment-workers-to-receive-digital-wages-by-2021/. Accessed 12 Jan. 2021.
- “Wage disbursement: RMG owners turn their backs on digital payment | Dhaka Tribune." 19 Oct. 2020, https://www.dhakatribune.com/business/2020/10/19/wage-disbursement-rmg-owners-turn-their-backs-on-digital-payment. Accessed 12 Jan. 2021.