“If you don’t know your own value, somebody will tell you your value, and it’ll be less than you’re worth,” stated Bernard Hopkins Jr, one of the most successful boxers of the past three decades. As the world slowly comes to terms with the new norms following the global Covid-19 pandemic, is it time for the ready-made garment (RMG) industry of Bangladesh and the wider global apparel supply chain to reassess the value of the product that it produces and increase end-consumer awareness of the true costs of the fashion purchases that they make.
The RMG sector of Bangladesh has enjoyed rapid growth since its inception in the late 1970s and, until the devastating effects of the coronavirus hit home, had established the country as the second largest global supplier of apparel, with a 6.4 percent market share in clothing and with the RMG sector accounting for 83 percent of Bangladesh’s exports, employing some 4.4 million people and contributing over USD 36 billion to the economy.
A few short months later and the entire fashion industry landscape has changed. Retailers and brands around the world have seen demand for their products shrink dramatically as their customers have been restricted by lockdown measures and, even as these measures are being relaxed, are reluctant to resume the purchasing habits they followed prior to the outbreak of the pandemic. The RMG industry has felt the consequences of this contraction in the fashion industry, with orders from customers being cancelled, delayed or, worse still, payments being withheld, leaving many companies in the industry facing a bleak future.
How could it have come to this in such a short space of time? An industry that was the pride of the nation has been brought to its knees in a matter of weeks and this has raised some serious questions about how we recover and shape the sector for the future.
Lest we forget, the rapid rise in the fortunes of the Bangladesh RMG industry were largely based upon the supply of “value” product, with the industry able to rely on a ready workforce whose salary expectations were, until recently, very low. The current apparel industry in Bangladesh is heavily reliant on “basic” low ticket price production, although some 40 percent of exports in 2018 were on higher ticket price fashion items. Due to this, the sector runs on extremely low profit margins, often eroded through increasing taxes, rising charges for fuel and power and greater expenditure on transportation and wages.
Covid-19 has exposed the fragility of this reliance upon lower ticket price items manufactured by workers who depend on their salaries to support themselves and their dependents. For too long a culture of price pressure from our customers has instilled a situation whereby, in general, the lower the cost paid for any apparel item, the lower the salary of the workforce that produce it.
But have we been missing a trick here? Has the RMG industry, over the years, lost sight of the true value of the product that it produces? I am not for a moment suggesting a wholesale increase in the purchase price of apparel products produced in Bangladesh but what I think needs to be realised is that the prices being paid for the product we produce are being kept artificially and, as has been proven, unsustainably low. In a post-Covid world we need to readdress this imbalance and, together with our business partners establish a fair pricing system for apparel produced in the country.
We should not forget the advances and investments that have been made in the RMG industry in the aftermath of the Rana Plaza disaster in 2013. We have been rightly proud of improvements in ethical, social and environmental standards and, at all costs, we must not turn our back on what has been achieved. Now is the time to engage with our customers and ensure that they understand our needs and the true value of the product we produce rather than continually chase orders for the lowest purchase price.
I appreciate that this approach will be alien to many involved in the Bangladesh RMG sector, but recent events have proven that we cannot let things carry on as normal. In fact it would be foolhardy to assume that things will return to normal once the ravages of the pandemic subside.
Now is the time, through engagement with our customers, to ensure that the true costs of any apparel item, whether produced in Bangladesh or in other sourcing hubs, are clearly communicated to the end consumer. There is an emerging groundswell of consumers in our key markets of the UK, Europe and the USA that want to be assured that the product that they purchase is produced in the most ethical, environmentally sound manner possible. The Covid-19 pandemic offers the opportunity to inform those consumers and, together with our business partners, we can champion the virtues of the apparel product that we produce as a nation.
The Bangladesh RMG industry can no longer rely on the level of business that we enjoyed before the pandemic broke and we will need to adapt. There is much talk about the “survival of the fittest” within the global apparel supply chain. There is a common misconception that when asked to describe the process of natural selection, as defined by Charles Darwin in his work On the Origin of Species and the term survival of the fittest, many assume “fittest” to mean the best physical specimen of the species and that only those in the best shape and best health will survive in nature.
However, this is not always the case. Individuals that survive are not always the strongest, fastest, or smartest. By that definition, then, survival of the fittest might not be the best way to describe natural selection as it applies to evolution. Darwin did not mean it in those terms when he used it in his republished book. He intended “fittest” to mean the members of the species best suited, or able to adapt to the immediate environment, and it is this process of adaption that will ensure that the Bangladesh apparel industry can survive going forward.
Through engagement with our business partners, the championing of the advances the RMG sector has made and the establishment of meaningful partnerships based on a fair pricing strategy, the industry will continue, albeit in a different format to what we all knew before the Covid-19 crisis took hold.
Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the Founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE). Email: email@example.com