Bangladesh garment makers are no longer content with just catering to the traditional export strongholds (of Europe and USA).
They are now looking to spread their wings further with the non-traditional markets gaining in imminence. And one such name in this direction is South Korea!
Korea in perspective
According to Statista, revenues in the South Korean apparel market are expected to reach US $ 37.51 billion by the end of 2022 and the market is projected to grow annually by 0.76 per cent (CAGR) in 2022-2026 period even as it witnessed around 32 per cent growth from 2014 to 2021 in its apparel imports, although 2020 was more of an aberration when imports went down due to Covid-19 pandemic.
Meanwhile, thanks to the so-called saturation in the West, many companies (brands and retailers) have shifted focus to look for newer markets.
With South Korea being a thriving fashion market of its own where several local brands make up a sizeable share of the total fashion sales, it seems a fashion revolution is brewing in Seoul, which already has a strong street style influence, especially amongst the younger generations even as fashion-forward style sensibilities and a high demand for luxury and high street fashion make South Korea an irresistible market for the brands.
This has many global biggies focusing attention on South Korea now.
For information, the market’s largest segment is women’s apparel with a market volume of US $ 18.11 billion (in 2022).
Making opportunity count
South Korea currently sources 34 per cent of its apparel items from China.
But due to rising costs, apparel production is increasingly moving out of China, and as it would have been, Bangladesh, which stands next only to China in terms of manufacturing prowess and export capabilities, seems to have sensed the opportunity to increase its foothold in the thriving South Korean market.
According to Bangladesh’s Export Promotion Bureau (EPB), apparel shipments to Korea experienced a positive growth over the past five years despite the pandemic-led slowdown.
However, export earnings were only US $ 440 million in FY ’22 and industry players feel this is the time to put in efforts to increase share in the South Korean market, amidst order shifts from China, Vietnam and Myanmar.
And things seem to be moving in the right direction!
In the first two months of the current fiscal year (July and August), the amount of apparels shipped to South Korea increased by approximately 70 per cent, reaching US $ 98.86 million, which in the corresponding period of the previous fiscal year, was just US $ 58.28 million.
Bangladesh garment exporters are now hopeful of reaching the US $ 1 billion mark in exports to South Korea this fiscal year itself.
Their hopes have a strong reasoning as more and more Korean buyers and brands are now showing active interest in increasing sourcing from Bangladesh, courtesy the country’s manufacturing expertise and price competitiveness.
According to reports, Korean retailer Shinsung Tongsan, which owns three brands namely Topten, Pulham and Ziozia, is going to open a sourcing office in Dhaka by October whilst Topten has already started importing knitwear items alongside its primary imports, which include underwear, denim and shirts from Bangladesh.
What’s more, Coupang, the largest e-commerce company based in Seoul, has also begun importing garment items from Bangladesh.
Shinsung Tongsan is a subsidiary of Shinsung Group, while Coupang is also known as the Korean Amazon.
Stepping up the efforts
Considering the existing situation and the opportunities on offer, a delegation from Bangladesh, which will have representatives from the country’s apparel sector, Ministry of Commerce, EPB, Bangladesh Bank (central bank of Bangladesh) and Bangladesh Investment Development Authority (BIDA) will embark on a seven-day tour of South Korea on 22nd October 2022 to look for new buyers and bring in fresh investments for the apparel sector.
“We will invite big buyers and brands in Korea to source products from us. We will also offer them joint cooperation in manufacturing man-made fibre-based products,” claimed BGMEA President Faruque Hassan on efforts to boost exports and increase investments even as BGMEA Vice-President Shahidullah Azim, on his part, claimed, “We hope our next month’s Korean mission will help our apparel exports to the country reach US $ 5 billion by 2030.”
The BGMEA Vice-President’s statement was made in reference to a previous trade mission to Latin America that helped increase apparel exports to more than US $ 6 billion from a mere US $ 600 million (in the destination) over the course of the last 10 years.
Apart from regular apparel items, South Korea also has significant demand for high-value winter clothes and denims.
Other possible products that have a healthy demand in the country include non-leather footwear, home textiles and jute and jute goods.
As Bangladesh garment industry continues to diversify its product offerings and move into new and exciting product categories, including value-added apparels, hopes are high things are in for a facelift as far as exports to South Korea are concerned.
So, don’t forget to keep an eye on Bangladesh’s apparel exports to South Korea, to know if and when exports are able to breach the US $ 1 billion mark (to South Korea)!
