Bangladesh in Slo-Mo

Looking at Bangladesh export data is like seeing the end of an old Fellini movie, showing cataclysm in slow motion: The great Bangladesh garment industry ball imploding with an earth-shattering KAPLUMPF, while all around you see these little ant-like foreign buyers running for their lives fearing that they too will be sucked-up into the rapidly forming Bangladesh black hole. And, as the buyers flee, you can see them turning their heads back and yelling over their shoulders, “Keep up the good work. We support you 100%.”

It was only 6 months ago when major brand importers and giant transnational factories were rushing to build state-of-the-art operations in Bangladesh, despite the Sana and Tazreen mishaps.

I was in Hong Kong last week. While there, I asked some of the industry leaders involved in last year’s large scale investment strategies, “What about Bangladesh?”

The most common reaction was total bewilderment, with one major investor declaring, “Bangladesh! Bangladesh who? I recall an Oscar Bangladesh, who played shortstop for the Cincinnati Reds, but that was a long time ago, and I think he died.”

A year from now, the Bangladesh garment industry will be one more historical episode much like Israel in Egypt or Pompey and Mount Vesuvius.

In the mean time, life must go on. The big question being: Who gets to eat the Bangladesh carcass?

It appears that, while everybody is getting a little piece, the big winner appear to be as follows:

Vietnam is of course the big winner with double-digit market share increase in cotton T-shirts, jeans, and underwear, and woven shirt market share up in the high single digits.

After Vietnam finishing gorging, there is not that much left for anyone else.

India: Shows very good results in all Bangladesh product categories in including men’ woven shirts, cotton T-shirts and to a lesser degree jeans.

Looking at the U.S. market, CAFTA-DR looks like a winner, with Nicaragua leading the way followed by Guatemala and Honduras. Good news after years of decline.

Mexico is showing some small gains in jeans and woven shirts.

When the time coms to write the textbooks, the experts will tell us

• Low labor rates are an unimportant factor determining sourcing decisions.

• With 0 compliance Bangladesh’s industry was never sustainable

• Bangladesh reliance on commodity goods — cotton T-shirts, jeans, woven shirts and underwear — put the them in direct competition with anyone entering the industry


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