Opportunities & Difficulties for Fashion Retail Business in Bangladesh

The retail fashion business is a growing sector in Bangladesh. As many other countries in the world, people in Bangladesh are deeply concentrated on creating and developing a business sector based on ‘fashion’. The fashion retail business in Bangladesh demonstrates our culture, our choices, our economy, our improvement, and our fashion sense. This sector has some opportunities to grow, as well as facing some difficulties. This article presents Opportunities & Difficulties for the Fashion Retail Business in Bangladesh.

Opportunities for Fashion Retail Business in Bangladesh

• Low labor cost: Bangladesh enjoys the facility of low labor cost compared to many countries around the world. Though in 2019, the minimum labor cost increased, it is still cheaper than Myanmar, Cambodia, Vietnam & China. It is a positive factor to set up a retail business internally. Already, Bangladesh has so many fashion brands of different categories, like merchandise retail houses, fashion retail houses, or general retail houses. For example, Aarong, Nabila, Vasabi, Cats Eye, Richman, Yellow, Ecstasy, Kay Kraft, Dorjibari, Sailor, etc.

• Skilled Manpower: We have skilled manpower for a wide range of smart fashion variable work. Our workforce is capable enough to go with the flow of producing fashionable clothing. For our internal retail business, we have a skilled workforce from rural & urban areas. Rural women are the main workforce for so many reputed fashion retail brands. They are using their ancient culture, design, and art to make a product that is trendy & customer-oriented. They are receiving training from the government & non-government organizations to enhance their skill.

• Available raw materials: The Availability of raw materials for the internal retail business is a positive factor in Bangladesh. Fabric, thread, accessories, trims, etc., are available to meet the demand of the internal retail business. As the RMG sector of Bangladesh is the 2nd largest in the world, we have plenty of international buyers who force us to get raw materials from their nominated foreign traders. We can take this as an opportunity to flourish our internal retail business.

• Large number of consumers: Bangladesh is a densely populated country where there is variety of different geographical, demographical, and age-group classifications of consumers. From low-income to high-income people, everyone has their preference on style & fashion. Any marketing strategy can be successful with proper customer segmentation. For example, some of our retail house focuses on students & producing low to medium price range products, considering fashion & trend. Some are focusing on corporate women & producing fusion products with a medium to high price range & so on.

• Easy customer demand analysis: Demand forecasting is easier in Bangladesh. Work group, age group, choice preference, occupation, geographical location, gender, religion, area, location etc. are the factors dominates customer demand in our country. Seasonal & occasional demand forecasting, simple or weighted moving average or exponential moving average forecasting method is easier to find customer demand.

• Positive support from the Bangladesh Government & financial institutions: The Bangladesh government as well as various financial institution, has positive support for expanding internal retail business. There are loan facilities with low interest rates for small to medium-scale business projects. Bangladesh Bank has taken the SME banking & loan strategy since 2010. It has a separate women entrepreneurs dedicated desk. Banks & financial institutions can provide an SME loan of 25 lakh taka to women entrepreneurs. Besides so many private banks, financial institutions like IDLC Finance Limited, IPDC Finance Limited, National Finance Limited, etc. are providing positive support to the retail fashion business in Bangladesh.

• Profitable business: The Retail fashion business is more profitable in Bangladesh. Internal communication, transportation, low raw material cost etc. helps to give a positive profit margin in this sector. Rate of return is high & faster in this sector. Proper cost benefit analysis, value & IRR analysis is necessary for proper feedback from business. As we have seasonal demand variety, then with proper market analysis product design & production will helps to gain profit from retail fashion business.

•  Less risk than export order: It is less risky than export business. No pressure of L/C, unwanted pressure, less lead time, collection of foreign raw materials or buyer rejection. Step by step market analysis, demand forecasting, planning, designing & market survey, quality product & customer satisfaction can flourish internal retail fashion business in Bangladesh.

• Strong sense of business: Bangladesh is growing fast in fashion world. It has own fashion designer with excellent academic & technical knowledge. They can design & create diversified product as per customer choice. Bangladesh has various textile professionals with strong business sense. Textile engineers & Industrial engineers have knowledge of sourcing, merchandising, planning, engineering, marketing, logistics etc. We can utilize the knowledge of our business professionals & set fashion retail business in Bangladesh.

• Adding e-tail into retail: E-tail business is the sense of modern fashion business. In Bangladesh, people also comfortable to find their fashion product with a click. Several online sites set-up for this purpose. Near future people will get 3D view of their product in prior, magic mirror facility, custom made product etc. Retail fashion store is adding these facilities on their website to attract customers. It indirectly enhances retail fashion business in Bangladesh.

Difficulties for Fashion Retail Business in Bangladesh

• Workforce Diversity & employee turnover: Workforce diversity is a major problem for establishing retail business in Bangladesh. People are focusing on fast profit business. They tend to diverse on electronic business, grocery shops, leatherwear products or move to other country by leaving current profession. Employee turnover is another important issue. Business need to be stable with proper skilled manpower. People turnover higher because of continuous search for better economical advantages, geological advances, lack of women empowerment and so on.

• High price of utilities facility: Utilities facilities is not cheap in Bangladesh. Electricity & gas bill is increasing day by day. This is one of the major reasons, small & medium range entrepreneurs are facing problem. It has direct impact on less expansion of retail business. Tough natural resource like water has availability, very soon it will be costly as underground water label is decreasing day by day.

• Change of fashion trend: People nowadays are more likely to western outfit. Also, Indian and Pakistani attire has great impact on fashion trend change. Women are fascinated to use Indian clothing inspired by TV serials or social media. Indian Sari, Salwar Kameej, gents wear, Pakistani salwar kameej is now leading Bangladeshi market. Though we have our own ancient culture like hand loom dress, jamdani etc., but in lack of fusion and design variation people are not admiring those. Western outfits are getting popularity by young generation. In our big shopping malls products from China, Singapore, Thailand is available. These are the reason people are not attracted to open their own retail house.

• Lack of demanding design: With the flow of modern fashion trend, people are more likely to get new design, new fabric quality, new fusion etc. Our product design & demand forecasting doesn’t go parallelly. Seasonal, occasional demand & inventory management is not proper. In some case, we like to do copying from other national or international brands and people are not accepting this as everyone wants to be superior on their choice of fashion.

• Less awareness regarding brands: Brand value is an important matter in most developed countries. For example, when people wear a reputable brand of clothing, people do recognize it. In our country, this value isn’t identified by people yet. People still don’t recognize brand value because of their economic condition or social status. A custom-made product has high brand value in other countries, but in our country, people seem to see it as a lavish product.

• High outlet cost: There is a high outlet rent cost in Bangladesh, as per people’s affordability. As per the selected location, the fashion house rent or in shopping mall rent is high. In case of small & medium range entrepreneurs, it becomes a burden. So, people are more likely to do business in e-tai, which in single unable to create a reputed fashion retail brand.

• Weak transportation & logistics system: Traffic jams are a major problem for the less expansion of this sector. Another big issue is the lack of roads & highways. Suppose a retail house started its business in a rural area community for the final product, and its outlet is located in an urban area. There is no proper transportation system to bring the product to the outlet. The logistics and inventory management system is not properly balanced. We have a lack of warehousing facilities in rural areas, so seasonal demand is sometimes hindered by these issues.

• Lack of concentration on retail fashion business: People & government largely focus on expanding international business. We totally forget that emphasis on our retail sector may bring it to the international standard. The government is taking initiatives like duty-free access, VAT reduction, etc., for the expansion of export business. Our retail brands are deprived of financial & managerial initiatives from the government.

The retail fashion business in Bangladesh is growing day by day, though it has some major limitations. Hope that very soon, by the proper action of entrepreneurs & government, this sector will flourish and create brand value worldwide with a positive economic impact.

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