Local denim retains dominance in US markets

Local denim has maintained its top position in the US markets despite the ongoing global crisis as the demand for garments made from the widely used fabric is soaring among American consumers.

Bangladesh's denim shipment grew 42.01 per cent year-on-year to $738.70 million in the January-September period this year. It was $520.16 million in the corresponding period a year earlier, data from the US Office of Textile and Apparel (OTEXA) showed.

In the denim segment, Bangladesh conquered the European markets in 2017 after surpassing China and overtook the world's largest garment exporter in the US markets in 2020.

Denim is one of the major items that showed its true potential when it comes to export diversification within apparel. And the item has proved its strength and today, one in every three consumers in Europe wears denim trousers manufactured in Bangladesh.

In fact, denim has been performing strongly for the past decade on the back of significant investments made in the sector after local entrepreneurs noticed the changing fashion globally and got down to grab the opportunity. Their efforts have paid off.

Bangladesh's 40 mills can produce 80 million yards of denim fabrics a month and the investment in the sector is Tk 16,000 crore. The country's share in the global denim market is 24.64 per cent and it is growing.

In January-September, Mexico came second in the denim export segment in the US. Its export grew 18.99 per cent year-on-year to $561.38 million.

Pakistan was the third largest supplier, clocking a 36.63 per cent growth to $376.95 million, OTEXA data showed.

Vietnam was in the fourth position after it shipped denim items worth $348.64 million, up 25.12 per cent year-on-year.

China, despite being the largest apparel supplier worldwide, has been performing poorly in the US market. Between January and September, denim shipments from the country to the US increased by only 6.12 per cent to $291.45 million.

The dragging tariff war between the two largest economies in the world has been the main reason for the significant fall in Chinese merchandise exports to the US, opening up opportunities for garment-producing countries like Bangladesh since orders are shifting from China to other destinations.

Owing to the trade tension, many major US-based retailers and brands have expressed their intention to source more denim products from Bangladesh in order to ensure a stable supply chain, according to Shams Mahmud, managing director of Shasha Denims, one of the largest denim items manufacturers.

"If their plans translate into reality, the shipments of denim to the US will continue to grow for many years."

He said Bangladesh is receiving a lot of orders for denim products but most of them have largely been for low-end products.

Bangladesh is also a favourite supplier to US denim importers as the country is a champion in setting up green garment factories and complying with environmental standards.

The US imported denim fabrics worth $3.24 billion in January-September, registering a 27.78 per cent expansion, OTEXA data showed.

"Although the shipment of denim saw a downward trend in September, October and November, it is expected that the export will turn positive from February since inquiries from buyers are high," said Mohiuddin Rubel, a director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

BGMEA President Faruque Hassan lists three important developments that took place in the denim segment in Bangladesh over the last one decade.

"A lot of new investments have taken place. Many laundry washing plants armed with the latest technologies have been set up. And there has been the development of a lot of technical know-how in the country," he said.

Bangladesh has a huge opportunity to expand its denim exports globally. 

The global market for denim jeans was estimated at $57.3 billion in 2020 and is projected to sprint to $79.6 billion by 2027, according to a study by Research and Markets, a global research firm.

The denim jeans market in the US was estimated to stand at $14.2 billion in 2020. China is forecast to have a market size of $16.5 billion by 2027.

The denim market in Japan and Canada may grow 2.6 per cent and 4 per cent respectively between 2020 and 2027, while Germany is forecast to grow at 3 per cent during the period, the study added.