High-Value Apparel Is Growing in Bangladesh: $500 Million Annual Export

Bangladesh's fame as an apparel exporter came from low-value clothes such as T-shirts. Now, Bangladesh apparel manufacturers are moving towards high-value items such as suits and blazers. Higher margins in profits drew entrepreneurs’ attention to this segment of the market. Now Bangladesh has made a major leap in suits and blazers production with an annual export of $500 million. Bangladesh has also grown its presence in the global market for suits, formal jackets and blazers, reaching a 12-15% market share.

At present Bangladesh is in the top five leading exporters for men’s and women’s suits, blazers, and trousers by value. Other competitors in this segment are China, the EU, Vietnam, and Turkey. In FY 2019-20 Bangladesh’s total export in this market was $200 million, now in FY 2020-21, this has grown to $500 million. This is an astounding 1.5-fold increase.

A primary reason for this growth is higher profit margins. According to experts, outerwear such as jackets have a margin of $12-$15, comparatively suits margin is about $25-$28. A typical mid-range suit export price ranges between $150 to $300. So, the profit margin in suits is 60% higher than trousers.

Entrepreneurs are investing more into this segment and as a result, leading global brands are sourcing suits from Bangladesh. Leading buyers like H&M, M&S, C&A, Zara and Jos A Bank are sourcing from the country.

One hurdle in growing this segment further is the lack of quality suit fabric in Bangladesh. This is forcing manufacturers to source fabric from China, adding delay and cutting into their profits. This highlights the need for local textile factories to start high-quality suit fabric production to meet demand in the market. Another hurdle is the lack of qualified workers. During Covid-19 a lot of workers were laid off, and post Covid-19 factories are facing a worker shortage.

Nearly all of the suit manufacturing factories' capacities are booked till July to September. They are also receiving better prices as demand from countries such as the USA is still high.