Halima Tus Sadia
SWOT analysis is a strategic planning and strategic management technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to business competition or project planning. It is sometimes called situational analysis or situational assessment. SWOT analysis helps to find out the advantages and problems by analyzing the internal and external factors of any organizations. In this article, we are going to learn about the strength, weakness, opportunities and threats of denim market of Bangladesh by doing SWOT analysis.
Bangladesh’s denim manufacturing business is rapidly expanding, drawing an increasing number of multinational companies that source and manufacture their denim goods in the country. Every year, approximately 400 textile and clothing manufacturers in Bangladesh export 180 million pieces of denim jeans to the worldwide market. Bangladesh’s denim industry is thriving because to its enormous manufacturing capacity and inexpensive production costs. Bangladesh exports more than USD 2 billion in denim items to the worldwide market each year, according to statistics from the Bangladesh Textile Mills Association (BTMA). According to the Commerce Department’s Office of Textiles and Apparel (Otexa) data, Bangladesh exported $798.42 million worth of denim garments to its biggest export destination in 2021, experiencing year-on-year growth of 42.25%. Bangladesh aspires to strengthen its leadership position in the global denim market as demand for denim textiles grows both locally and globally. In the last five year, leading Bangladeshi denim suppliers have earned LEED certification.
Here, we discuss the SWOT analysis of denim market of Bangladesh which will help us to understand the further growth of denim business.
Bangladesh denim market already has leading position in EU and US market which is a strong point for denim manufacturers. Day by day the demand of denim fabrics and products is increasing rapidly in global market. The local mills of Bangladesh are capable of meeting this demand by investing in denim manufacturing. Sourcing from local markets instead of importing, takes less time to produce the products. Again, industrialists are adopting technology and automation in the industry. There are also availability of labors. Increasing number of eco-friendly and green factories which attracts the interest of top global buyers.
Though Bangladesh has leading position in denim market, it has several weaknesses. Because the Bangladesh RMG sector has not yet experienced the fourth industrial revolution, the manufacturing process is heavily reliant on human labor. As a result, production costs are rising. Furthermore, the manufacturers’ lack of bargaining leverage merely adds salt to the wound. During the present pandemic, Bangladesh’s RMG sector was forced to cancel work orders worth $3.16 billion, owing to insufficient negotiating strength. Surprisingly, in this circumstance, many producers are considering switching to private labels rather than manufacturing for major brand names. Lack of producing diversified products. Workers mindset of staying traditional sewing procedure. Despite being a major participant in the global denim industry, Bangladesh falls behind in terms of research and innovation. There is still minimal investment in the industry’s research and development, which is a highly concerning reality.
There isn’t a single adult in the world who doesn’t own at least one pair of jeans. Furthermore, jeans are now worn and adored by women and children all over the world. As a result, the likelihood of Bangladesh’s denim export expanding in the next years is undeniably promising. According to Cotton Inc., 71% of individuals in Europe and Latin America prefer wearing denim, followed by 70% in the United States, 58% in China, and 57% in Japan. Customers are increasingly more concerned about environmental and health dangers, thus denim items made using a sustainable approach are becoming more popular. In a recent development, Bangladesh is also making the garment manufacturing process more environmentally friendly by developing green factories, which is a significant benefit. China, the biggest competitor of Bangladesh denim market is focusing on electronics than apparel that creates a huge opportunities for Bangladesh to grab the global market.
Despite the enormous promise, the local sector nonetheless faces certain hurdles. One of them is infrastructure. Inefficiencies in transportation infrastructure, deficiencies in basic utilities, and, of course, the country’s lack of a deep seaport are causing the sector to suffer. Political instability, which used to be a source of concern for the business as a whole, has steadily, although not dramatically, lessened over time. With that, the gas and electricity crisis causes higher lead time. Besides, the competitor countries are producing trendier and fancier products and all these issues cause threats for denim markets.
Without a doubt, the strong market share and export revenues indicate promise. However, the industry’s present constraints are making it difficult for Bangladesh denim makers to fulfill their full potential. This is where activities must be launched in order to capitalize on the denim industry’s competitive advantage.