Key highlights:
- Bangladesh will have a $489 million garment industry opportunity by 2027 from the global online market’s expansion.
- Bangladesh needs to establish a virtual market, globalize its textile business, and adapt to consumer behaviors.
- The digital economy requires legislative reforms and technical acceptance to succeed.
Did you know that the global online market is projected to grow at a staggering compound annual growth rate (CAGR) of 6.5% between 2022 and 2027? Retailers’ online investments and falling inflation are driving this expansion.
Online marketplace platforms account for 47% of global digital purchases, contributing to this rise. These platforms generate 63% of transactions.
Forbes projects that the revenue generated by B2C marketplaces will amount to $3.5 trillion by the year 2024.
You can also read: Govt Injects Tk 7.49cr Stimulus into Jute Sector for Explosive Growth
Bangladesh can benefit from this developing worldwide online industry, especially in garments.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) forecasts that virtual markets in the US, EU, and Africa could generate $489 million in garment sales by 2027.
The possibility to get 0.2% of the market in the US, 0.1% of the market in the EU, and 0.75% of the market in Africa is about $308 billion.
The local textile industry into global value chains
According to a recent study titled “Establishing A Virtual Marketplace for Bangladeshi Apparels” by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh has the opportunity to utilize the expanding global online marketplace as a means to stimulate its economy.
Bangladesh has no online access to sell its apparel to worldwide purchasers. The report underlines the need for such a platform due to the growing trend toward internet buying and its impact on Bangladeshi fashion. The report suggests creating a virtual marketplace to link the Bangladeshi textile industry to global value chains and capitalize on Internet shopping.
This market would have two goals:
- Increase B2B activity in emerging countries including Asia and the Middle East.
- Increase profit margins and business volume by connecting Bangladeshi producers directly with end customers (B2C).
Why online marketplace is the future?
In the fiscal year 2022-23, Bangladesh exported garment items worth $46.99 billion alone, according to data from the Export Promotion Bureau. For continued expansion, the sector should utilize online marketplaces. The significance of these marketplaces in international commerce is steadily increasing, as 40% of online retail transactions are projected to transpire via them. This showcases the significance of online marketplaces for companies seeking to expand their consumer base and increase product sales.
By utilizing online marketplaces, the apparel industry in Bangladesh can-
- Expand global reach
- Increase sales and revenue
- Improve efficiency and save money
- Gain insight into client preferences and shopping habits
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said, “The future of the business, not only garment, but also in cases of other products, is virtual online business platforms.”
Hassan stressed the significance of the digital marketplace in light of the increasing pervasiveness of internet connectivity. He emphasized on the growing prospects within the apparel industry resulting from the rising popularity of online purchasing among consumers, specifically Gen Z. He further highlighted the heightened importance of the digital marketplace, especially in light of the COVID-19 lockdown measures.
“Developing a virtual market platform will boost sales of the RMG sector and rebound from the effects of the pandemic,” thinks Hassan.
Business formation experts reveal that the global B2B online market size was valued at $7,432.12 billion in 2022. It is anticipated that this expansion will persist, as 75% of B2B procurement expenditures will be conducted via online marketplaces over the following five years. Several key factors, including convenience, global outreach, and lower marketing costs, etc. contribute to this substantial growth.
Convenience:
Online marketplaces let firms shop anytime, anywhere. The large range of products on these platforms meets varied consumer demands and interests, increasing ease.
Global Outreach:
Online marketplaces let enterprises reach customers worldwide. This worldwide presence opens new markets and business prospects. The BGMEA’s study emphasizes the potential for Bangladesh to tap into international markets through virtual platforms, projecting significant earnings in the garment business from markets such as the USA, European Union (EU), and African countries.
Lower Marketing Costs:
The lower marketing costs associated with online marketplaces offer businesses a cost-effective avenue for reaching their target audience. Traditional marketing channels often entail hefty investments in advertising and promotional activities. In contrast, online marketplaces provide a platform where businesses can list their products and leverage built-in marketing tools to attract customers, reducing the need for extensive marketing expenditures.
Eliminates Middleman:
The potential of the virtual marketplace for local garment suppliers is huge as it enables direct sales to wholesalers, retailers, brands, and end consumers. This direct approach eliminates middlemen, ensuring that suppliers receive higher prices for their goods.
Future-proofing the online marketplace is crucial
A virtual marketplace can transform Bangladesh’s clothing industry and enhance economic progress. Several important initiatives are needed to future-proof the market. First, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recommends policy reforms to address regulatory issues and disparities in cross-border transactions and foreign currency rules.
“The National Digital Commerce Policy of 2018 only governs the domestic market, and does not make any explicit policy framework addressing international e-commerce,” said Hassan.
The BGMEA’s feasibility study recommends creating an international e-commerce platform for Bangladesh’s textile and apparel sector. This platform would capitalize on online shopping by integrating the local textile industry into global value chains.
“If we want to maintain our position in the global competition ahead, we need to develop a comprehensive business model,” Hassan added.
Industry trends suggest that AI-driven customer care and voice commerce can improve market efficiency and accessibility. Streamlining logistics and distribution, branding, and foreign exchange and income rules are essential to future-proofing the sector and maintaining its digital economy success.
Essentially, with the ever-changing digital economy, businesses that want to thrive in today’s marketplace really have to engage in online marketplaces.
