Bangladesh exports: Apparel Sector in the Lead

October 21, 2022

Bangladesh’s exports have been growing exponentially over the last few decades.

While many may disregard this small, South Asian country, it’s home to over 165 million people that help export over $50 billion every year. While exports are growing, so is the Bangladeshi economy.

This growth opens up even more possibilities for foreign investors. Whether you want to trade locally or outsource your production, Bangladesh is the perfect place.

Interested in learning more about the Bangladeshi export market? You’re in the right place. Here’s everything you need to know about the import and export business in Bangladesh.

Bangladesh

The People’s Republic of Bangladesh may not be the most popular country in South Asia. However, with over 165 million people and a $400 billion GDP, the country is slowly becoming a dominant player in the global export market. Bangladesh has a thriving export market, with the majority of its imports being raw materials to support the export business.

Bangladesh is in close proximity to major trading partners such as India and China. This gives them the advantage to manufacture and distribute goods throughout the world. This is because Bangladesh can leverage the same logistics routes as India even though the local market is so much smaller in comparison.

This helps make the local manufacturing market a prime destination for clothing and textile brands.

Local Manufacturing Market

As the second largest economy in South Asia, Bangladesh has a strong local economy. The local GDP has been on the rise in the last decade, with estimates showing that the country is on track to hit $1 trillion in GDP (PPP) in a few years. The nominal GDP of the country is just below $400 billion, making it an incredibly competitive market in the developing world.

The Bangladeshi Government has invested billions into local infrastructure and education. This was to help revive and grow the local economy. However, the textile industry is primarily responsible for the country’s expansion. The local manufacturing market is so dominant that premium brands from around the world want to work with local companies in the area.

Import Needs

Even though Bangladesh exports tons of finished products every year, the economy is still heavily reliant on essential imports. While the deficit has reduced in recent years, Bangladesh still relies on China and India for most of its raw materials. Bangladesh’s biggest imports are energy and raw materials such as cotton, woven cotton, and knitted fabrics.

As with many other South Asian countries, Bangladesh is also reliant on the big economies of the world such as the EU and the United States.

The Bangladesh Export Business

The local manufacturing market in Bangladesh is incredibly efficient and cost-effective. This allows Bangladesh to be the perfect manufacturing hub for textiles and clothing. While Bangladesh exports over $50 billion every year, almost all of this is due to the dominant clothing and textile industry.

Clothing

Bangladesh has some of the most efficient clothing manufacturing facilities in the world. Much like China, the local manufacturing business has invested in making production as cheap as possible. Along with low labour costs, this makes Bangladesh the best place for Europe to outsource the production of its clothing.

Textiles

While the clothing industry is dominant within the Bangladesh market, the textile industry is not far behind.

This showcases the quality of production within Bangladesh. Unlike other low-cost manufacturing countries, Bangladeshi companies still produce high-quality clothing. This is what encourages premium brands to outsource their production to Bangladesh.

Bangladesh Online Exports

While Bangladesh may seem like a low-cost manufacturing hub, the factories are incredibly advanced. These companies have embraced the internet to allow people from around the world to find and place orders completely online. This helps cut down on costs while also reducing the time taken to close the sale.

Biggest Trading Partners

When it comes to international trade, the United States always takes centre stage. However, Bangladesh trades more with Europe than America. In actual fact, Bangladesh exports more goods to Germany alone than to the entire United States. This massive export business is driven almost exclusively by fast fashion brands like Zara and H&M.

Europe

While Germany does account for 16% of all Bangladeshi exports, 7.4% goes to the United Kingdom and 7.1% goes to Spain. Bangladesh also exports tons of clothing and textiles to countries such as Poland, Italy, Russia, Austria, France, Denmark, and the Netherlands.

This means that wherever you are in Europe, you can effortlessly import products from Bangladesh with ease.

Unites States

The United States accounts for only 15% of the total exports from Bangladesh. While this is still over $7 billion every year, a majority of this is in formal clothing. Over 30% of all clothing exported from Bangladesh to the United States are men’s and women’s suits.

This is closely followed by men’s shirts, sweaters, and coats.

How Invoice Financing Can Help With Bangladesh Exports

The Bangladesh export business is massive. At the same time, the entire clothing industry is so strong that companies from around the world are outsourcing to local Bangladesh garment manufacturers.

When it comes to running a successful import-export business, invoice financing can represent a great way to help your business scale. This is because factoring services allow you to cash-in 90% of your invoices upfront, while the buyer pays back the factoring provider up to 120 days later.

Incomlend is a Singapore-based fintech that can help improve your cash flow to keep your business running, specialised in invoice financing for small and medium-sized companies. If you export items overseas from Bangladesh, we can help you. Find out your eligibility in one click!