To go beyond the common targeted business in Bangladesh, a clear and long-term initiative must be taken. – Hossain Tawhid Imam, Strategic Buyer, Decathlon France

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Hossain Tawhid Imam, Strategic Buyer, Decathlon France. He has been working with brands for a long time. Recently Denim Focus Coordinator Pranta Biswas talked with him. “I don’t know how much it’s going to be insightful but It’s my pleasure to share views on retail, fast fashion, the impact of the pandemic, and of course Bangladesh & footwear.” Mentioned Mr. Tawhid.  He also said, “In all my expressions, I will address fashion and sports retail with a clear focal point on footwear. My passion for footwear has always taken over my personal and professional space. You may also find my intentions evident in making the footwear industry of Bangladesh grow together within & beyond.” Key discussion points have been mentioned here for our readers-

To go beyond the common targeted business in Bangladesh, a clear and long-term initiative must be taken.

Hossain Tawhid Imam, Strategic Buyer, Decathlon France

Denim Focus: As a strategic buyer how do you see the retail industry?

Hossain Tawhid Imam: Purchasing is an ever-evolving topic, and it has changed a lot faster in past decades with the change of consumer needs and behavior than ever. Once, being competitive was enough; today, a retailer has to be competitive, fast, on time, green and it’s also considered as an advantage if it’s an enterprise of boosting the local economy. Retail along with its procurement chain is a whole new game with a complex matrix of influences.

Retail has also built its unique character considering the zone of operations. The US market is highly driven by brand value (Example: Nike) while the European market is driven by value for money (Example: Inters ports); and the Chinese retail is more emotionally inclined to local brands – production (Example: Anta Sports). And, then the whole consumer world is a fan of ease; so, hence comes the platform of retailers like Amazon. The organic growth of the retail market over years has been 7%, and the brands growing faster than the market, are taking more and more share in their part of the game.

In recent years, there is also a very strong shift in retail platforms. Companies like Amazon, Alibaba, eBay, Walmart have redefined retail in the last two decades. And, the retailers from the fast fashion market are either joining them to use the platform or creating their own by dissolving their general expansion plan of physical stores.

As a whole, the world is evolving very fast; and with pandemic, it’s hard to find sustainable changes in the midst of changes influenced by the time of pandemic. We are struggling. The ‘right’ will become the winner in the long run.

Denim Focus: What was your observation during the Covid-19 pandemic in 2020?

Hossain Tawhid Imam: There are thousands! Let me share the most influential ones seen by me.

a. THE WORLD IS CHANGING FOREVER: The whole concept of retailing is changing; The ‘internet sales’ has increased by 400%! will it decline ever? I don’t think so.

b. A WORLD WITHOUT DEPENDENCY ON CHINA: The whole world of retail was shaken by the dependency on China. We all have experienced ‘how the world can stop revolving if China is under lockdown!’ The procurement risk management will have stronger insights to redistribute its business into sourcing channels outside greater China soon.

c. SHORT LT OVER CHEAPER PRICE: A lot more retailers will start to focus on local production than cheaper sourcing. The math of tangible value will change to intangible local value creation.

It’s easy and calculable in terms of value a retailer is creating by sourcing from a cheaper source; whereas it was not always easy to explain the comparable value creation by sourcing from nearer locations where the cost of production is higher with a benefit of low inventory cost, high reactivity to seasonal needs and market response.

d. THE WORLD IS AN INTERDEPENDENT SUPPLY CYCLE: Look at last 1 year; what have not we experienced!

i. China went under lockdown in March 2020:

– Raw material shortage started in May 2020.

– Shipment stopped for finished goods from March, creating a shortage in retail from May 2020.

ii. Asian production countries went under lockdown from May 2020:

– Mainly the production of finished goods stopped creating a shortage from June 2020.

iii. Retailing countries went into lockdown from April 2020:

– Production and shipment came to a halt from May 2020; and never restarted in full!

In each of these stages of lockdown, the whole supply chain from raw material to finished goods and then sales channels experienced a deep shock proving to be very much interdependent. And now at the end of a year, we are experiencing an enormous price hike in raw material impacting the complete supply chain again in terms of cost.

e. RESTART WILL BE ROBUST BUT UNCERTAIN: We are waiting for a sales explosion; each retailer is doing their best to prepare for the ‘restart’. And at the time of restart, no one wants to let a single customer go back from the stores (or, online platform) empty-handed. A sales explosion is about to happen as soon as life comes to normal (even with a mask). The problem is, ‘sales explosion’ is not sustainable, it is time-bound. And retailers must use this time to improve their loyal consumers by all means.

Denim Focus: Fast fashion is moving ahead, how can we be ready for it in Bangladesh?

Hossain Tawhid Imam: If I understood your question well, you are more keen on the production than retail of fast fashion in Bangladesh. I don’t see a sharp future of fast fashion retail in Bangladesh compared to the market one already has worldwide. And for manufacturing, if I consider 3 segments of fast fashion, Garment, Footwear, and accessories, each of the segments stand at a different viewpoint of its life. Let me speak for footwear only.

Unfortunately, I find ourselves not ready at all; and fortunately, the possibility is enormous in the footwear industry; specially for fast-fashion footwear (sports, casual, and fashion).

As it’s never about the destination but it’s all about the journey towards excellence, there are hundreds of points we need to address. Let me address the 3 most influential points where we must act fast (before anyone else does from the line).

a. FDI – FOREIGN DIRECT INVESTMENT

FDI is equally important as a local investment for an industry to grow inside a country; inequivalent investment cannot help the balanced upbringing of an industry.

FDI brings technical resources, technology, and buyers; and local investors provide infrastructure and workers (human) resources; together the conditions of growth are written. Today, how much FDI (foreign direct investment) do we have in the sports footwear industry? One! In an ideal scenario, it should be at least 7:3; in our case, it’s almost 10:0.

The FDI comes with ready buyers; this is a common means to bring buyers in an emerging production country (used by RMG in many cases).

b. BACKWARD LINKAGE

We have to build self-dependency by creating a local component network (Lower dependency on China): COVID19 was a good lesson to understand how dependency can be a killer. And, it’s a killer in the long term as well.

One of the means to reach self-dependency is to consolidate our needs of total components, semi-finished (sole) and tools for footwear Bangladesh; and take a collective initiative. A ‘target’ purchase to allow factories to invest and plan for investment matching expected ROI is a must to move forward. A mutual initiative by private and govt can make it happen only.

c. DEVELOPMENT SKILL

Initiative to create a recognized development facility is a must. Building individual PDC (Product development center) can be too expensive for medium and small factories. A common development center can be established by market leaders in the service of industrial growth. The center can sell service to all, Development package @right price. And if this initiative can be taken collaboratively by private and government bodies, it will bring more benefits with a lot more sense for the industry.

Denim Focus: For sourcing how do you consider Bangladesh Industry?

Hossain Tawhid Imam: Sourcing activity (purchasing) is not done on the basis of ‘today’ only. It’s all about making decisions today for tomorrow (5-10 years) considering the ‘experience’ (past) and using the ‘potential’ (future) of a country, matching with the needs of the company.

What is the ‘today’ of Bangladesh?

– A country with an enormous labor force.

– Competitive labor cost.

– Politically stable country (Compared to the image Bangladesh had before 2014).

– Currency (USD) is stable over the years.

What is the ‘today’ of footwear Bangladesh?

– Development know-how is limited.

– Footwear know-how is limited to basic labor-intensive shoes.

– Sole know-how is limited to basic soles (rubber, phylon, PVC, TPR).

– Almost no availability of footwear components locally (for export).

– Historically, the 2nd source of footwear was used as ‘price minimizer’.

– Footwear industry is limited to hundreds of manufacturers with low or medium capacity.

The future of footwear in Bangladesh is very limited with this information listed above. To go beyond the common targeted business in Bangladesh, a clear and long-term initiative must be taken. Otherwise, we will keep playing within the boundaries built by us.

Denim Focus: Any message for Denim Focus readers?

Hossain Tawhid Imam: Well, information is the new weapon in this changing industry of fashion and manufacturing. The more you know, the better you play the game. Keep reading Denim Focus; enjoy!

 

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