Market Diversification

Topics: International trade, Export, Success Pages: 1 (352 words) Published: December 19, 2012
Market Diversification
Bangladeshi RMG products are mainly destined to the US and EU. Back in 1996-97,Bangladesh was the 7th and 5th largest apparel exporter to the USA and European Unionrespectively. The industry was successful in exploring the opportunities in markets awayfrom EU and US. In FY07, a successful turnaround was observed in exports to thirdcountries, which having a negative growth in FY06 rose three-fold in FY07, whichhelped to record 23.1 percent overall export growth in the RMG sector. It is anticipatedthat the trend of market diversification will continue and this will help to maintain thegrowth momentum of export earnings. At the same time a recent WTO review points outthat Bangladesh has not been able to exploit fully the duty free access to EU that itenjoys. While this is pointed out to be due to stringent rules of origin (ROO) criteria, therelative stagnation in exports to EU requires further analysis. Product Diversification

The growth pattern of RMG exports can be categorized into two distinct phases. Duringthe initial phase it was the woven category, which contributed the most. Second phase isthe emergence of knitwear products that powered the recent double digit (year-on-year)growth starting in FY04. In the globalized economy and ever-changing fashion world, product diversification is the key to continuous business success. Starting with a fewitems, the entrepreneurs of the RMG sector have also been able to diversify the product base ranging from ordinary shirts, T-shirts, trousers, shorts, pajamas, ladies andchildren’s wear to sophisticated high value items like quality suits, branded jeans, jackets, sweaters, embroidered wear etc. It is clear that value addition accrues mostly inthe designer items, and the sooner local entrepreneurs can catch on to this trend the brighter be the RMG future. Backward Integration

RMG industry in Bangladesh has already proved itself to be a resilient industry and can be a catalyst for further...
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