Vietnam v/s Bangladesh Apparel Industry: A Quick Comparison @ Global Marketplace
27 May 2022, Mumbai:
Due to their diverse skills and advantages, Bangladesh and Vietnam will profit from most garment sourcing businesses' 'In China plus one approach.
According to WTO data, Vietnam will overtake Bangladesh as the world's second-largest garment exporter in 2020.
Vietnam's lowdown on its foreign trade performance
According to the BGMEA, Bangladesh recovered its position in the first half of 2021. Compared to Bangladesh, Vietnam's garment exports have increased quickly in recent years. "Vietnam has had an FTA with the EU since 2019, which has aided its export growth.
Furthermore, China is significantly investing in Vietnam to diversify and increase the value of its exports. Bangladesh, on the other hand, Bangladesh is still competing with its low labor costs," Raihan Mahmud, marketing director of Bangladesh's Tex Garment Zone, mentioned in the news.
"If exporters here can diversify their products and our government inks some new free trade agreements," Bangladesh has a greater chance of catching up.
How Real Is the Shift Of Apparel Orders From China To Vietnam
Bangladesh and Vietnam will benefit from most garment sourcing companies 'China plus one strategy because of their diversified capabilities and advantages. Vietnam will replace Bangladesh as the world's second-largest garment exporter in 2020, according to WTO data.
According to Tran Thanh Hai, deputy general director of the Agency of Foreign Trade, Vietnam's exports and imports grew by double digits in the first quarter of 2022, reaching $176 billion, up 14.4% yearly. During this time, exports increased by 12.9%. According to several analysts, overall export-import income might surpass $700 billion this year.
Bangladesh, according to the BGMEA, regained its position in the first half of 2021. Vietnam's garment exports have expanded rapidly in recent years compared to Bangladesh.
Apparel Industry's Best Practices
"Vietnam has had an FTA with the EU since 2019, which has boosted its export growth.
The increase, according to Hai, is due to the benefits of new-generation free trade agreements (FTAs) and regional trade agreements. Below is the list of FTAs that Vietnam has concluded by now.
Vietnam - Japan Economic Partnership Agreement. ...
Vietnam - Chile Free Trade Agreement. ...
Vietnam - Korea Free Trade Agreement. ...
Vietnam - Eurasian Economic Union Free Trade Agreement. ...
ASEAN Agreements. ... ASEAN - India FTA. ...
ASEAN - Australia - New Zealand FTA.
Following the publishing of a World Trade Organization (WTO) study, the competition between Vietnam and Bangladesh took on a new dimension. As close competitors in the realm of garment manufacturing and exports, Vietnam surpassed Bangladesh in 2020 to become the second-largest readymade garment exporter after China, shipping apparel worth the US $ 29 billion all over the world, even if Bangladesh rallied from behind to surpass Vietnam within a year of the WTO findings.
Garment exports, the lifeblood of Bangladesh's economy, and foreign earnings increased by 30.36 percent to the US $ 35.81 billion in the calendar year 2021, the highest level ever (earnings from apparel exports in 2020 were US $ 27.47 billion).
In 2021, Vietnam had a 9.89 percent increase, but only US $ 32.75 billion in garment exports, compared to the US $ 35.81 billion in Bangladesh. Vietnam gained $ 29.80 billion from garment exports in 2020.
Pandemic has battered supply chain disruptions and shifts in global markets having upended the garment industry in Bangladesh.
"It was a temporary change in ranking in the global apparel export market because COVID-19 hit our production hard, negatively impacting exports," said Abdus Salam Murshedy, Managing Director of Envoy Textile, who added that with the outbreak of the pandemic in March 2020, the government-imposed lockdown resulted in factories' production taking a significant hit.
Vietnam could manage to register 9.89 percent growth in 2021 yet the fact of the matter is it could earn only US $ 32.75 billion in apparel exports in the most challenging global business environment.
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