According to research, China, Bangladesh, Vietnam, and India are four of the largest garment exporter in the world. All these four countries have a well-developed garment industry. Organizations look to explore these opportunities. For this reason, they source their garment manufacturing operations to these countries. When it comes to apparel manufacturing, Bangladesh sourcing is the most preferred option for marketers. Easy availability of raw materials, a large workforce, and cheap labor costs are some of the factors that accelerate the garment procurement scenario of Bangladesh. China, Vietnam, and India also have various favorable factors that cater to the apparel manufacturing industry at large.
Trends in Apparel Industry Growth
In previous times, China was the largest exporter of apparel products. However, the scenario has changed in recent times. It is Bangladesh that leads the list in garment manufacturing. The rising wages, high standards of living, and slowdown of population growth are forcing many marketers to deviate from the Chinese market. Though China gains the upper hand in high-tech competitiveness, the above-mentioned factors are affecting the sourcing operations of organizations.
What Factors Give Bangladesh the Leading Edge
The labor costs are cheaper in Bangladesh when compared to most other Asian nations. The garment manufacturing industry requires a huge amount of workforce. As this Asian country has cheap labor costs, a large number of garment manufacturing industries are located in Bangladesh. There has been a significant increase in garment production in countries like India, Vietnam, and Cambodia since the last decade. The official and mandated rates of the regulated economy are reflected in these minimum wages. A large number of manufacturers do not pay proper wages to their workers in these countries. Research studies highlight the fact that more than 80% of workers operate in the informal economy.
Read: Apparel Sourcing from Bangladesh – Top Challenges Faced by Markets
Why China is Losing Its Importance in the Garment Manufacturing Arena
Due to rising labor costs in the Chinese market, many marketers are conducting their Asia sourcing activities in other countries. If the labor costs are high, the production costs will also be higher. Furthermore, this increases the prices relating to goods and services. Though the Chinese government has undertaken various reforms to combat this adverse scenario, they are not enough.
How India is Giving a Tough Competition to China
When it comes to sourcing, India is giving a tough competition to China. The reasons for this are obvious. The massive workforce of India is one of the major factors. This large workforce makes India a favorite procurement destination for marketers, especially for garment products. Added to this, the labor costs in India are low. Henceforth, India is the second favorite sourcing destination for organizations after China.
How Vietnam’s Human Capital is Catering to Its Sourcing Scenario
It will not be wrong to say that garment manufacturing is a low-skilled job. There is no need for the garment importers to assess the knowledge of the workforce. However, skilled labor in managerial positions enhances the productivity of factories. Research studies highlight the fact that Vietnam’s human capital surpasses China’s. This is indeed a major achievement. The scenario is not in favor of India as it lags even behind Bangladesh.
Bangladesh has a shortage of skilled labor in the ready-made apparel industry. The total exports of Bangladesh are concentrated in garments like trousers, t-shirts, shirts, sweaters, and jackets. Due to the lack of high-skilled labor, Bangladesh fails to diversify its garment manufacturing operations. In this case, China has the upper hand as this Asian giant has embraced new technologies that catered to its production operations. Henceforth, China gains the opportunity to diversify its apparel manufacturing activities. China succeeds in making higher quality and technical garments, unlike Bangladesh, India, and Vietnam. Technical garments comprise of items designed with special fabrics and techniques. These special fabrics allow for breathability, movement, water-resistance, and comfort.
How Infrastructure Plays an Important Role in Garment Manufacturing
The infrastructure of a country plays a great hand for garment manufacturing operations of organizations. China takes pride in having a superior infrastructure when compared to most other Asian nations. This Asian country also takes the charge in other areas relating to infrastructure, namely, the burden of customs procedures, timeliness of shipments, and quality of overall infrastructure. Bangladesh lags behind China in this regard. Inadequate infrastructure and poor transportation systems are some of the drawbacks of Bangladesh sourcing. Though Bangladesh leads the list when it comes to the manufacturing of garments, this adverse infrastructure scenario cannot be ignored. The poor infrastructure of Bangladesh is hampering the reputation of an organization’s brand in many ways.
On the other hand, the infrastructure and transportation scenario in China is world-class. This results in shorter lead times as the finished products reach the hands of marketers within a short period. Besides this, power shortage problems are very common in Bangladesh. This hampers the manufacturing operations of organizations at large. The reason why garment importers prefer Bangladesh is because the country has a low labor cost. However, this fact highlights Bangladesh’s lower economic development when compared to China, Vietnam or India. The supply chain in Bangladesh is also not up to the mark. This has much to do with the poor economic development of the country.
Organizations can reap the benefits of a better supply chain if they decide to engage in sourcing operations in Indian markets. However, fragmented local government policies are a major barrier. Though there are subsequent improvements in the form of electronic submissions and reducing the number of documents for customs clearance, it is not enough. China and Vietnam have stable economic policies, unlike Bangladesh. These two countries emphasize international trade and thereby, giving a tough competition to China.
Organizations can be hugely benefited if they decide to conduct their garment manufacturing activities in the Asian markets. The countries of China, Bangladesh, India, and Vietnam are allowing marketers to unlock the gates of success. Business firms need to take help from reliable sourcing agents while conducting their Asia sourcing activities. With their assistance, companies can get acquainted with the economic and political scenario of the Asian countries. Procure your organization’s apparel manufacturing operations in Asia if you want to make your marketing campaign a success.
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