Does denim ever go out of style? The answer is a big NO. Denim is considered to be one of the most versatile and practical kinds of fabric, by fashion connoisseurs around the globe. Since the 1950s, the popularity of denim clothing has only skyrocketed with time. So much so that we stand at a time when denim made protective face-masks is a thing amid a pandemic.
In Bangladesh, the second largest exporter of clothing and apparel in the world, the denim industry shows a lot of promise. It is forecasted that the total denim exports of the country will reach a huge sum of $7 Billion by the end of 2021. Bangladesh currently dominates in the European denim market, the largest one in the whole world and is the third-largest in the United States. All these promising facts are really encouraging for any thriving clothing manufacturer in Bangladesh. Manufacturers often find themselves in an incertitude regarding the choices of products to manufacturers. The real picture of the opportunities and threats in the Bangladesh Denim Industry is a good starting point with the uncertainties. Here is our two cents on the issue.
Increasingly High Demand Around the Globe
The demand for denim products is huge all over the globe. From a consumer survey, it has been observed that a staggering portion of 70% (Roughly 230 million people) of the total population in the United States regularly wear denim products.. In the UK, at a given period of time, a consumer has an average of 17 denim made products in their wardrobe. The value of the global denim market is on the rise and the market value is projected to reach $105 Billion by the end of 2023. These staggering numbers show a huge promise for denim manufacturers in Bangladesh. Every year a total of 450 million pairs of denim jeans as a single product are sold worldwide.
The ‘Made in Bangladesh’ brand
As we mentioned before, Bangladesh now has a colossal market share of 27% of the European denim market, the largest by any single country. The country also prides of having the third-largest market share, 14.2%, in the US market. Bangladesh has already made a good name in the global industry. Moreover, it is expected that globalization is going to surge over the next decade and the industrialization will move eastward. The investments in the denim industry has risen by manifold in the country in the last few years, pushing the manufacturing capacity up sharply. According to local manufacturers, as fabrics are now being sourced locally rather than being imported, the efficiency of the denim industry as a whole has increased.
Infrastructure and Sourcing
Despite the huge promise, there are still some challenges that the local industry is facing. Infrastructure is one of them. Inefficiencies in transportation facilities, shortcomings in basic utilities, and of course the absence of a deep sea-port in the country is making the industry suffer. Political instability, something used to be a headache for the industry as a whole, has gradually decreased over the course of time, but not sharply. On top of that, the sourcing of raw materials is another issue. According to sources, Bangladesh still has to import 50% of the total requirement of denim fabrics.
Low Bargaining Power on part of the manufacturers
As the Bangladesh RMG industry is yet to experience the fourth industrial revolution, the manufacturing process is largely dependent on manual labor. As a result, manufacturing costs are on the rise. Along with that, low bargaining power on the part of the manufacturers only rubs salt on the wound. In the ongoing pandemic, the RMG industry of Bangladesh had to endure the cancellation of work-orders worth $3.16 billion, mostly caused by low bargaining power. Surprisingly though, in this situation many manufacturers are looking to switch to private labels, rather than manufacturing for the big brand names.
Lack of Research and Innovation
Although Bangladesh is a big player in the global denim industry, the country lags behind in terms of research and innovation. There is still little investment in the research and development side of the industry, a very alarming fact indeed. The introduction of automation in the manufacturing process could save a lot of money and effort on part of the manufacturers. Taking that into consideration, investments in R&D could be proven a very lucrative endeavor.
The high market shares and export earnings show promise, no doubt. However, the challenges that the industry is currently going through is causing serious trouble for Bangladesh denim manufacturers to reach their true potential. This is where initiatives need to come in to exploit the upperhand in the denim industry.