Share of non-traditional markets growing

Bangladesh's garment entrepreneurs' push for diversifying export markets and cut high reliance on Europe and the US is paying off.

Apparel exports to markets other than European and North American destinations, termed as non-traditional markets by exporters, is growing and so is its share in overall garment shipments.

During the July-September period of the current fiscal year of 2023-24, non-traditional markets accounted for 19.3 percent of the $11.6 billion earned through garment exports, according to data compiled by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

During the same period a year ago, it was 17.4 percent.

From another perspective, garment exports to these non-traditional markets, which include Japan, India, Australia and South Korea, grew 25 percent year-on-year.

In contrast, the growth in Europe, the biggest market for Bangladesh's exporters, was 11.4 percent.

And in the US, the second largest destination from Bangladesh's apparel, it was far lower, around 3 per cent.

One major reason is the increased efforts of exporters as the scope for growth in Europe is shrinking, said Fazlul Hoque, managing director of Plummy Fashions Lt.

Besides, buyers of non-traditional markets are reducing their dependence on China, said Hoque, a former president of the Bangladesh Knitwear Manufacturers and Exporters Association.

Three years ago, traditional markets, namely Europe, the US, UK and Canada, had generated around 84 percent of the total apparel export receipts. At the end of fiscal year 2022-23, it was just over 82 percent.

Of the amount earned from non-traditional markets in the past three months, half came from Japan, Australia, India and South Korea.

Among them, Australia registered the highest year-on year growth of 54 percent to reach $344 million.

In Japan it was 39 percent, reaching nearly half a billion US dollars.

South Korea, another emerging export market for Bangladesh, was closely trailing at 37 percent, reaching $180 million.

"However, our apparel export earnings from India declined by 7.69 percent," said Mohiuddin Rubel, a director of the BGMEA,a platform representing the garment industry which generates some $47 billion in annual export earnings.

Clothing exports to the neighbouring country fetched $282 million in the first quarter of fiscal year 2023-24.

During the same period a year ago, it was $306 million.

Products from Bangladesh get duty free access to Japan, Australia, South Korea and India since it is a least developed country, said Mostafa Abid Khan, a former member of the Bangladesh Trade and Tariff Commission.

It appears that exporters are now focusing more on these markets, he said.